Retired U.S. Air Force Maj. Gen. Garry Dean will become the president of Alexandria-based consulting company Peduzzi Associates Ltd. on Friday.
Dean has served on the company’s board of advisers for the last four years. He has been an international airline captain for Delta Air Lines since he retired from the Air Force in 2015. Dean’s predecessor, founder Pete Peduzzi, will continue to serve as chairman of the company.
Dean’s final military assignment was as director of the National Guard Bureau Joint Staff. He was the deputy chief of staff for operations for NATO’s Allied Joint Force Command in Naples, Italy, where he was responsible for intelligence, operations and campaign assessments for ongoing contingency operations in the Balkan, Mediterranean, Middle East and North Africa regions. As commander of the First Air Force, he was responsible for all Air Force disaster responses in North America.
I’m looking forward to working with General Dean as he leads PAL into its next great chapter,” said retired U.S. Army Lt. Gen. Ray Palumbo, a member of the company’s board. “Garry is a proven leader of character and integrity, and he will build on the solid foundation that Pete Peduzzi formed all those years ago. I’m looking forward to a very promising future for PAL serving the needs of our clients.”
PAL has a business development sector and a services sector. The business development sector assists small businesses or corporations seeking to expand in a specific sector by providing government relations, analysis and insight. The services sector provides subject mater expertise in personal and organizational change, training and development and business management for local, state and federal government agencies. The company has locations in Alabama, Florida, Texas Maryland and North Carolina.
Brought to you by Virginia Business and Bank of America, join us every other month for the Diversity Leadership Series — virtual fireside chats with a diverse group of Virginia business leaders sharing their insights and thoughts on leadership, their career paths, and diversity and equity. In our second event, held Sept. 30 in Norfolk at Gather, features Jack L. Ezzell Jr., CEO of Hampton-based Zel Technologies LLC, and Angela D. Reddix, founder, president and CEO of Norfolk-based ARDX. Ezzell’s company, which he started after retiring from the Air Force as a colonel, started as a small consulting firm and has grown into a large engineering, manufacturing and professional services corporation. He has been named to the Hampton Roads Business Hall of Fame, as well as Virginia’s Small Business Person of the Year, among many other accolades.
Reddix, named one of Virginia Business’ inaugural Women in Leadership Awards winners, started her health care management and technology consulting firm in 2006. ARDX has landed more $178 million in government contract work, and Reddix has founded mentorship programs for girls and women in the Hampton Roads area. She is a member of Old Dominion University’s Entrepreneurial Hall of Fame and a published author, and received her Ph.D. in business administration from Oklahoma State University.
Our series kicked off on July 20 with Brian Robertson, CEO of Mechanicsville-based Marion Marketing Global LLC, and Ron Carey, founder and CEO of Tilt Creative + Production, a Richmond-based agency that produces advertising and promotional content for clients such as Capital One, Walmart and Audi of America.
After a 300% surge in new unemployment claims the previous week, the state saw numbers return to relatively normal levels in the filing week ending Sept. 25, the Virginia Employment Commission reported Thursday. Last week, 8,717 people filed initial claims, a decrease of 7,245 from the week before.
Continued claims, however, rose by 9,672 last week to a total of 47,241, 73% lower than 173,713 continued claims from the same week last year. For the same week in 2020, 9,377 people filed new jobless claims, 7% more than last week. People receiving unemployment benefits through the VEC must file weekly unemployment claims in order to continue receiving benefits.
The majority of the claimants who filed for benefits last week reported being in these industries: health care and social assistance; administrative and waste services; retail; and accommodations/food service. The regions of the state that have been most impacted continue to be Northern Virginia, Richmond and Hampton Roads. Nationwide, the advance figure for seasonally adjusted initial claims last week was 362,000, an increase of 11,000 from the previous week’s revised level. There were 732,912 initial claims in the comparable week last year.
Meanwhile, a Joint Legislative Audit and Review Commission report said earlier this month the VEC has “paused” collection of overpayments to unemployed claimants as it sorts through more backlogs of disputed claims and appeals, the Richmond Times-Dispatch reported. The agency has been under tight scrutiny this year as it was under court order to address a backlog of earlier claims by Labor Day. Although the VEC was able to meet that deadline, other disputed claims built up during that period. Also, WTVR 6 reported that the VEC’s launch of an updated claims system, set for Oct. 1, has now been postponed to November.
Italian cured meats manufacturer Veronesi Holding S.p.A., a Gruppo Veronesi company, will invest approximately $100 million to establish its first U.S. production facility in Rockingham County, creating an estimated 150 jobs over the next four years, Gov. Ralph Northam announced Thursday.
The facility will be located on 75.8 acres in the Innovation Village @ Rockingham and used to age, process and package the company’s products.
In July 2018, Northam met with company officials in Italy on an international trade and marketing mission.
“We are pleased that Veronesi Holding S.p.A. chose Virginia, the home of nearly 900 internationally owned businesses, to grow in the U.S.,” Northam said in a statement. “We welcome one of Europe’s leading food and beverage companies to Virginia and Rockingham County and look forward to its success in the commonwealth.”
Headquartered in Verona, Italy, Veronesi Holding S.p.A. is a privately traded company that reported more than 3.1 billion euros in sales in 2020 and has 9,000 employees. The poultry and hog producer’s products range from feed to fresh and cured meats. Veronesi owns the Agricola Italiana Alimentare S.p.A. (AIA) and Negroni brands, the latter of which has produced delicatessen meats for more than a century.
“This is a very ambitious project for us and it marks an important step for our company,” Gruppo Veronesi CEO Luigi Fasoli said in a statement. “We want to start a new chapter in our history and establish in this country our first-ever production site for cured meats abroad, offering Americans all our expertise with the maximum freshness and quality. It is with great enthusiasm that we chose Virginia, where we found all the necessary ingredients to live our American dream.”
The Virginia Economic Development Partnership worked with Rockingham County, the Shenandoah Valley Partnership and the Port of Virginia to secure the project. Northam approved a $3.8 million grant from the Commonwealth’s Opportunity Fund for the county. Veronesi Holding is eligible for benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program and a Major Business Facility Job Tax Credit. VEDP‘s Virginia Jobs Investment program will provide funding to support employee recruitment and training activities.
Situated on a bank of the Hague, the Y-shaped inlet off the Elizabeth River that shares a name with the city in the Netherlands, Norfolk‘s Chrysler Museum of Art is no stranger to the impacts of high tides, as well as flooded streets and parking lots during heavy rainfalls.
Right now, flooding is mainly a source of annoyance, says Chrysler Director and CEO Erik Neil, but it’s also a threat to the art, which the museum has addressed with renovations and moving artwork from the ground floor to second-floor space.
“We’ve never had water rise into the building, but we all know that given the right set of circumstances, it’s in the realm of possibility,” Neil says.
Throughout Hampton Roads, many businesses, localities and institutions are formulating plans to enhance their resiliency in the face of sea-level rise, as well as frequent flooding during storms and heavy rainfalls. Scientists say that sea-level rise in the region is escalating at almost twice the global average due to a mixture of human-caused ocean warming and expansion, which melts glaciers that raise the level of all oceans.
A 2013 study by Old Dominion University scientists further states that a proliferation of manmade structures built on already depressed land on Hampton Roads’ coasts have contributed to faster sea rise locally. The sea level at Virginia Beach has risen nearly a foot since 1970, and it is expected to rise 3 feet by 2075.
There’s also more rainfall. Six of the 10 biggest storm surges at Norfolk’s Sewells Point over the past century have taken place within the last 20 years, says a new report produced by the Virginia Academy of Science, Engineering and Medicine for the General Assembly.
And funding flood mitigation is a major challenge facing the cities of Norfolk and Virginia Beach, as well as other Hampton Roads localities that have fewer tourist dollars.
Underfunded and at risk
Ann Phillips, a retired U.S. Navy rear admiral and Gov. Ralph Northam‘s special assistant for coastal adaptation and protection, says that the frequent annoyance of flooding keeps public interest (and local governments) engaged in seeking solutions that will protect the region from future damage.
“We have a lot of infrastructure at risk,” Phillips says, noting that local military installations, NASA’s Langley and Wallops Island facilities and the Port of Virginia‘s Hampton Roads terminals and yards are all at risk of flooding now and in the future. Also, the state has only recently begun dedicating funding to catastrophic flooding — including a flood-preparedness community fund created in 2020 by the General Assembly.
The state netted $40 million for the fund via carbon credit auctions earlier this year, but that’s a drop in the bucket compared with the nearly $5 billion anticipated cost of seawalls and related infrastructure needed to protect Virginia Beach and Norfolk from destructive floodwaters.
Although Hampton Roads has not experienced a major weather disaster since 2003’s Hurricane Isabel, the impact of Hurricane Ida on the Northeast in September — killing at least 40 people in New Jersey and New York City and causing hundreds of millions of dollars in damage — is a reminder of how destructive such a storm could be to Eastern Virginia.
“It’s a whole lot better than the previous nothing,” Phillips says of the community flood fund. But she notes that between the Army Corps of Engineers’ $98 billion national backlog in resiliency projects and the state’s minimal flood preparedness funding, a significant financial burden falls on localities like Norfolk and Virginia Beach to build expensive seawalls and other protective infrastructure.
The funding setup differs between Virginia Beach and Norfolk, Phillips notes, because Norfolk collaborated with the Army Corps of Engineers on its resilience plan and therefore will see 65% of its $1.75 billion project funded with federal dollars.
The city of Virginia Beach, however, is working from a plan produced by Northern Virginia engineering firm Dewberry. Because the Army Corps was not involved, the city does not get as much federal funding for the $3 billion project, although Phillips says Virginia Beach hopes to have about 50% of the budget covered by federal dollars.
“At the moment, Virginia Beach is on its own,” Phillips says. “The goal is to work with the federal government to bring in dollars. The most common thing is to work with the Corps. It gets you in line if there’s a large disaster.”
Meanwhile, the state’s Department of Conservation and Recreation, which manages the community preparedness fund, is also devoting attention to other flood-prone regions — Portsmouth, Chesapeake, Franklin and other areas — that have less money to spend on protection.
Chrysler Museum of Art Director and CEO Erik Neil stands in a third-floor art storage area, where works are safe from flooding. Photo by Mark Rhodes
Bigger storms brewing
Meanwhile, storm intensity is growing, Hampton Roads localities’ current infrastructure is less capable of handling extra rainwater, and flooding costs the city of Norfolk alone $26 million a year, according to the August report commissioned by the General Assembly.
The state will release more information about so-called 100-year floods later this year in the Virginia Coastal Resilience Master Plan being prepared by Dewberry for release in November. The federal designation means that there is a 1% chance that a flood of that magnitude — currently rainfall of 9.4 inches in a single day — will occur in a given year.
The Dewberry study will include a projection of how quickly what previously were considered 100-year floods will have a 10% to 50% chance of occurring annually, says Jessica C. Whitehead, a member of the state resiliency commission and director of Old Dominion University’s Institute for Coastal Adaptation and Resilience.
With higher flood risks come higher expenses to the local economy. A 2016 study commissioned by the Virginia Coastal Policy Center at the William & Mary Law School predicted that the regional economy would shrink by $611 million the year after a 100-year storm, and if the sea level rises 0.75 meters over its current state in Hampton Roads, tax collection would fall by $309 million due to expected damage to residential structures.
Norfolk’s Vision 2100 strategic plan for responding to flooding and sea-level rise provides a blueprint for expanding the city’s flood protection system — including a downtown floodwall built in the 1970s. The plan includes how to improve transportation connections and diversify housing options, as well as fortifying major employers like the Port of Virginia, ODU, the Naval Station and Tidewater Community College.
In Virginia Beach, City Council last year approved the Sea Level Wise Adaptation Plan, which includes proposals for adapting buildings and infrastructure to enhance resiliency as well as restricting new development in the most flood-prone parts of the city.
“We’re at a critical stage because the sea level is rising and land is subsiding,” says Pamela Boatwright, deputy director of administration for the Elizabeth River Project, a nonprofit working to restore the environmental quality of the Elizabeth River. The organization is now building the Pru and Louis Ryan Resilience Lab on Knitting Mill Creek, which will be the state’s first urban redevelopment project built on a floodplain when it opens in 2023.
Adapting can be a daunting task, especially for businesses unable to relocate to higher ground. “If your business is situated 11 feet above sea level, you’re in great shape, but if your business is accessible via a road that’s two feet above sea level, that’s a problem,” Boatwright notes. “It’s going to be a big lift for everybody.”
Jessica Whitehead, director of Old Dominion University’s Institute for Coastal Adaptation and Resilience, says serious conversations about sea-level rise are needed locally and nationally. Photo by Mark Rhodes
‘We know it’s coming’
With 144 miles of shoreline, Norfolk ranks second to New Orleans as the U.S.’s largest city at risk from sea-level rise. Water levels in coastal Norfolk have risen more than 14 inches since 1930, and the National Oceanic and Atmospheric Administration (NOAA) predicts additional increases up to 4.5 feet by the year 2100.
The Larchmont neighborhood, plus parts of Ghent and Riverpoint, frequently sees standing water of 3 to 4 feet, even during moderate storms, Whitehead says. A 2013 study of recurrent flooding in the Hampton Roads region conducted by William & Mary’s Virginia Institute of Marine Science found that flooding presents traffic challenges and shoreline erosion that put roads at risk of collapse. Tunnels also are in danger of flooding if there’s a storm surge, and water supply and sewage utilities could be disabled if pumps are inundated by floodwater, the study adds.
“We know it’s coming,” notes Doug Beaver, Norfolk’s chief resilience officer. “The land is subsiding by 3.5 millimeters a year. Over a period of time, that becomes significant.”
Three years ago, Norfolk enacted a zoning ordinance to enhance flood resilience and provide incentives for businesses to locate in areas at lower risk of flooding, “one of the most innovative and forward-thinking zoning ordinances in the nation,” Beaver says.
He and his colleagues are pushing ahead with the city’s plan developed with the Army Corps of Engineers. First up: extending the flood wall toward Harbor Park, a $130 million project.
The city received nearly $113 million from the federal government for the project, but other big-ticket items may not get federal funding, Beaver adds.
While Hampton Roads has become nationally known for its proactivity in addressing sea-level rise, Whitehead adds that many in the region are reluctant to think about permanent land loss. “It’s very challenging to think systematically about what sea-level rise will do to the economy, social systems and community. Serious conversations must be had — not just in Hampton Roads but nationally.”
Phillips says that in the forthcoming state study, there will be a “strategic coastal relocation handbook,” Virginia’s first official guide to community relocation. “It’s the start of the conversation,” she says.
Although “relocation is Plan B,” Phillips says, Plan A — flood mitigation — is still in effect for even the most vulnerable areas. “We also realize that we can’t save everyone,” and some businesses and homeowners will ultimately need to move, she adds, noting that economically disadvantaged communities will likely bear the brunt of flooding and related financial damage.
Different solutions
With Hampton Roads at the forefront of sea-level rise in the U.S., entities throughout the region are joining forces to develop innovative resilience strategies. ODU’s Institute for Coastal Adaptation and Resilience brings together researchers from across disciplines to develop practical solutions for issues faced by coastal communities.
Sea-level rise poses different problems for Hampton Roads businesses, depending on their size and location.
“The port has tremendous infrastructure, so you have to determine a plan for when it gets permanently inundated over time,” Whitehead says, but the impact will be felt well before permanent inundation occurs 80 years from now.
“Higher sea levels mean we have less stormwater capacity until we retrofit stormwater systems,” she explains. “It takes a much less strong storm with relatively lower storm surge to produce a flood that impacts the same amount of land. You’ll also see greater reach of tidal flooding and stormwater flooding than you have in the past, long before you reach that permanent inundation.”
Although flooding may not directly affect the Port of Virginia’s terminals, Whitehead predicts that roads needed for cargo transport could be flooded. “Hampton Boulevard already floods due to high tide/hard rain combinations,” she says.
Phillips notes that the Port of Virginia has focused significant effort on sustainability and resilience — including collaborating on the Hampton Roads’ region’s resilience pilot project, the city of Norfolk’s storm risk management study and federal authorities’ efforts. But what the surrounding localities do — or don’t do — has a significant impact on the port, she points out.
“It’s not just [the port],” Phillips says. “If their people can’t get to work, they’re in trouble.”
The region’s economic development prospects are especially vulnerable, with sea-level rise and flooding affecting property values, insurance rates and basic business operations, says Nancy Grden, executive director of ODU’s Hampton Roads Maritime Collaborative for Growth & Innovation.
“If there’s regional flooding and if major utilities such as water, electricity and broadband are out, there’s loss of productivity. If customers are impacted by flooding, that’s going to change the pace and nature of their purchase. There are ramifications for businesses thinking about coming to Hampton Roads or expanding in the area.”
Having steered New Orleans’ Newcomb Art Museum through Hurricane Katrina, the Chrysler Museum’s Neil understands the devastating effects of flooding and the importance of contingency plans to protect assets.
Proposed solutions include raising streets surrounding the Chrysler to allow water to immediately drain underneath the pavement. The Army Corps has also considered building a floodwall to protect the Hague area from storm surges of 8 feet or higher at an anticipated cost of $160 million.
“If that doesn’t get built, we will have to seriously consider moving,” Neil says, “but we have time before we have to make that call.”
As Virginians decide whether to go with the known — Democratic former Gov. Terry McAuliffe — or the unknown — first-time candidate Glenn Youngkin, a Republican — Virginia Business checks in with the two major contenders to be the commonwealth’s 74th governor. In exclusive interviews, the candidates lay out their plans to create more jobs, encourage entrepreneurs and expand broadband access to all parts of the state. We also see where they differ philosophically on how to build an environment for flourishing business growth and economic development.
McAuliffe: Economic development, broadband are keys to success
Virginia Business: What would be your top priority as governor?
Gov. Terry McAuliffe: Clearly, the most important issue for me is building a great economy. We’ve made great progress. We got to build a really stronger post-COVID economy.
Last time I [was] in office, with the Great Recession and sequestration, Virginia was too dependent on the federal government outlays and defense spending. We needed to diversify. That’s what I did.
I was the architect of the new Virginia economy. We retooled workforce development, became a leader in the country on that. We redid all of our schools to better align the workforce gaps to make sure we’re teaching our students the skills they need to meet those jobs of the 21st century.
I leaned in before on this: 200,000 new jobs, 1,100 economic development projects, a record $20 billion of new capital, personal income went up 14%. It worked.
As governor, I’ll continue to travel. We’ll have a great ally with Joe Biden as president now to assist us. The resources, the federal government will be very helpful to us to build this new Virginia economy again and continue to diversify and continue to bring in all those great-paying jobs. I led the nation on our public-private partnerships. We’ll do it again.
I want to make us a leader in clean energy. I was the governor to sign the first offshore wind turbine lease [with the U.S. Bureau of Ocean Energy Management]. We now have two turbines out there.
I want to see us lead the country in building a trained workforce and creating more streamlined pathways from our public schools into our workforce, working with our career and technical [schools], working with our community colleges.
Working with my wife, [we had] 13 million more school meals served. We led on getting pre-K [education] to tens of thousands of our Virginia students.
There’s over 550,000 Virginians today that actually have health coverage now [through Medicaid] — including 13,000 [cancer patients] today [who] get radiation [treatment] … who would not have had it. That’s a big deal for me.
I [also] wrote the bid for Amazon [HQ2], submitted it before I left the office.
Terry McAuliffe photo by Will Schermerhorn
VB:If the federal infrastructure package passes, what should be the priorities for Virginia?
McAuliffe: Transportation — huge for Virginians. I did $10 billion worth of infrastructure, unlocked Hampton Roads, which had been a mess. [I] canceled [the U.S.] Route 460 [toll road], on which the prior administration had wasted $200 million of our great taxpayer money. I saved the Port of Virginia, [which] lost $120 million [during] the five years before I took office. [It’s] now one of the most successful ports on the East Coast. I did the Atlantic Gateway rail project, added 18 miles to I-95. I did the I-66 Project —
$3.7 billion project, no state money involved — and it will be a game-changer for the folks up here in Northern Virginia.
I think with the infrastructure money, obviously, we have thousands of bridges and roads that are in disrepair. [One priority is] fixing that infrastructure to get us where we need to be to have a world-class transportation system. We need to continue to lean in on the rail capacity here, and [Gov.] Ralph [Northam] has done a great job on that.
We need increased passenger rail, trying to get people out of cars and getting them into [the] Metro, building more bus lanes and issues like that. As I say, we did the Atlantic Gateway, which opens up [the port’s Norfolk International Terminal]. Now they can get their goods out of the port quickly into the breadbasket of America and all over. Our [agriculture] and forestry businesses can thrive here. I’m all about transportation. I did it before. We did some of the most complex deals, and we are a different state today.
I’ve been friends with Joe Biden for 40 years. When he was vice president, he helped me get the largest transportation loan, called TIFIA [Transportation Infrastructure Finance and Innovation Act]. He helped me with the [Port of Virginia]. [Editor’s note: Virginia secured a $1.2 billion TIFIA loan in 2017 for the construction of toll lanes on Interstate 66.]
We [also] unveiled a $25 million cyber-security initiative at our HBCUs [historically black colleges and universities].
I’m very excited to have the president. I love the other 49 states, but I’m going to do everything I can as governor to leverage that relationship to make sure that we are getting a majority of that money right here to Virginia.
VB:How can rural Virginia’s lagging economies — areas previously dependent on coal, tobacco and textiles —catch up with the more prosperous parts of the commonwealth?
McAuliffe: If you read [my] plan, and this is important, I have 18 policy plans — 153 pages as of now — of very serious policy proposals. I have a whole section on raising rural Virginia. When I was governor, I reduced unemployment … from 5.7% [to 2.6%]. We were practically full employment when I left office, and we’ve reduced unemployment in every city and county in Virginia. Nearly every rural county saw a reduction of nearly 50%.
I leaned in. I traveled the globe. I think I was the most-traveled governor in U.S. history in four years: 35 trade missions, five continents, dozens of countries, and [we] brought companies back from all over the globe and many of those [invested in] our rural communities. [Another priority is] continuing to be a great ambassador for Virginia to sell our agriculture and forestry abroad, and to leverage relationships and bring companies here to Virginia. I did it before, I’ll do it again.
In addition, a huge priority for me is broadband. I promise you that within two years, we will get broadband access to everywhere. We have over 300,000 homes today that do not have any broadband access — 14% of our
Former Gov. Terry McAuliffe visited Granules Pharmaceuticals during a campaign stop in Chantilly on Aug. 26. L to R: Granules Pharmaceuticals CEO Priyanka Chigurupati; McAuliffe; and David-Imad Ramadan, a former Republican member of the Virginia House of Delegates. Photo by Will Schermerhorn
children did not have broadband access last year.
Think of that during COVID — how really damaging that is for children who are online learning and yet they couldn’t online-learn because they didn’t have any internet capacity. They go to McDonald’s to a Wi-Fi hotspot. That is unfair. The first thing we need to do is get the broadband access all over rural [Virginia], but in addition, of the 14% [who did not have access], 40% were urban. [We need to make] sure that everybody has that broadband access.
I called for raising the teacher pay above the national average for the first time in Virginia history, because today we rank 50th out of 50 states. [Editor’s note: This comes from a 2020 business.org report on average teacher salaries compiled by the National Center for Education Statistics.]
When you compare [teachers’] average pay to the average pay of our citizens, we’re last in the country. It’s really disgraceful for the 10th-wealthiest state in America.
It’s not fair that rural parts of our state have substitute teachers [instead of permanent teachers]. Let’s pay our teachers. Let’s keep the best quality teachers in Virginia, who today are leaving to go to Maryland, Pennsylvania, Delaware because they can … [make] $10,000 to $24,000 more.
In addition, we need to build the infrastructure of our schools. Fifty percent of our schools are 50 years or older. I was just down in Bristol the other day, at Highland View, an [83]-year-old [elementary] school. They have rats, they have bats. They had a fire recently because of the old wiring that they had down there. That’s not fair. They have one bathroom for the entire … school — one stall for teachers, one stall for students. [Editor’s Note: Highland View actually has two bathrooms but McAuliffe is essentially correct, says Bristol Superintendent of Schools Keith Perrigan, noting that the school also has asbestos and air quality problems and isn’t accessible for people with disabilities.]
Education is the main reason I’m running — to rebuild our education system so I can build the greatest workforce in the United States of America. It’s not talk for me. I did it. I brought a record amount of jobs to rural parts of our state, and we can take it to the next level.
VB:CNBC just ranked Virginia as its Top State for Business again.
McAuliffe: We’re No. 1 again, the only state to get it two times in a row. Very, very important for us to continue that pro-business climate that we have here. I was a very pro-business, pro-jobs, socially progressive Democrat, making sure our state’s open and welcoming.
VB:Virginia just legalized marijuana. Do you support that?
McAuliffe: I support it. It’s very important for us. Once we get it up and running, we’re going to see about $330 million added to our economy [annually]. It’ll create tremendous new business opportunities all across the commonwealth. By 2023, businesses are going to be able to apply for licenses, and the retail market should be fully functional by 2024.
This is a whole new avenue, as is casino gaming, which I’m a proponent of. We’re doing great in Virginia. We have five approved [casino] projects. They’re all working their way through their respective approval process. That’s going to generate another $360 million for the commonwealth of Virginia. I’m excited. I’m very bullish. [Editor’s note: Voters passed local referendums allowing casinos in Bristol, Danville, Norfolk and Portsmouth, while Richmond residents are voting on their casino referendum this fall.]
[Northam] just announced a big budget surplus, much different [from] when I went into office. … I do want to thank President Biden [for] the American Rescue Plan, because that has been so helpful to the commonwealth of Virginia. We got $70 million off of that, just for vaccinations. Think of that. We have a million-and-a-half children who have been able to benefit. Seven million Virginians have seen relief checks [totaling] $9 billion.
I was up in Winchester and met with small business leaders. Most of the people in that room told me that, had they not been able to get the rescue fund money, [Paycheck Protection Program loans] and other [support], they would not be in business today. I’m a huge advocate of all of this.
If you thought the last eight years were great in Virginia, which they were, I remind you when I took office, our economy was in a crisis. People were laughing at Virginia because of the anti-women bills that had been passed. We are a different state today. We are poised now with Joe Biden in the White House. This state is going to take off like a booster rocket.
VB:Youngkin has said you’ll repeal Virginia’s right-to-work law if given the opportunity. Is that the case?
McAuliffe: In my four years as governor, I learned that the best way to make progress for Virginians is to focus on where we can get things done and deliver real results, like creating good jobs, expanding access to health care and investing in education. As I say on issue after issue, I support things that can get passed and I am focused on creating good-paying jobs, raising our minimum wage to $15 by 2024, and getting every Virginian access to paid sick days and paid family medical leave. This is the type of progress we need to be focused on, and they will be my priorities as governor.
Youngkin: Va. needs more jobs, higher wages, site readiness
Virginia Business:What will be your top priority if you’re elected governor?
Youngkin: This is about growth and jobs. This is what it boils down to: growth and jobs. That’s going to require us to fundamentally rethink how we’re growing, how we’re creating jobs, how we’re preparing people to take those jobs.
Career preparation and talent pipeline is critical. In order to facilitate that, we’re going to fundamentally need to make changes in our business environment. That’s going to enable what we need to get done.
Over the course of the last eight years under [Govs.] Terry McAuliffe and Ralph Northam, Virginia’s economy has just stalled out. Real GDP in the commonwealth of Virginia has been outpaced over the last eight years by Maryland, Tennessee, North Carolina, South Carolina and Georgia — states we compete against head-on. Just those states we compete directly with for companies and for families, Virginia’s GDP has grown 70% slower.
Over that same eight-year period, we’ve had net-zero job growth. We’re 33rd in the country on job growth. As we’ve come out of this pandemic, we’re 45th in job recovery. [Editor’s note: As of August, Virginia ranked 34th in job growth for the previous 12 months, according to Bureau of Labor Statistics data. And Virginia ranked 49th in percentage of jobs recovered, having regained 55% of jobs lost since the pandemic began. However, the state’s unemployment rate in August was 4%, significantly below the national rate of 5.2%.]
All of that actually points to opportunity. Opportunity is voted on every day by Virginians. What’s happened again, over the same eight-year time period, is we’ve watched people vote with their feet; 600,000 Virginians have moved [to] these competitor states. The sad thing is, the biggest group are people between the ages of 26 and 35, people who are really starting life. [Editor’s note: Demographers with the Weldon Cooper Center for Public Service at the University of Virginia cite affordable housing and job opportunities as top factors for out-migration.]
The net of this is that we’ve got to get moving. We’ve got to find growth, we’ve got to create jobs, and we have to create opportunity, so that people stay here as opposed to moving away. That’s the framing of where we stand right now. It’s not a pleasant thing to actually identify, but [I] spent my whole career actually studying things like this. This is the performance of Virginia, the scorecard of Virginia.
The highest priority that we have when it comes to economic topics has to be reenergizing growth, reinvigorating the job machine, and restoring opportunity for folks by getting trained and prepared to take these jobs.
I want Virginia to win. Virginia hasn’t been winning over the last eight years, and it’s time for Virginia to win again.
VB:CNBC just named Virginia its Top State for Business again. What would you change?
Youngkin: Let me just comment on the CNBC ranking. I am thrilled to death that Virginia gets accolades. I am a proud, proud Virginian, and I want Virginia to get accolades. Unfortunately, Virginia isn’t performing like the No. 1 state to do business in. It’s not. In fact, some of the underpinnings to that ranking actually shine a bright light on the challenge as why we’re not performing. The cost of living in Virginia — gosh, we’re ranked 32nd, and the cost of doing business, where we’re ranked 26th, and the quality of our infrastructure, where we’re ranked 24th. [Editor’s note: These rankings come from CNBC’s 2021 Top States for Business report.]
We get ranked really highly on the quality of our higher education. That’s great, because we have great colleges, but unfortunately, they’re not accessible and affordable [for] Virginians.
We absolutely have to get our business environment and our business-friendly quotient moving in a completely different direction. Right-to-work is critical to Virginia’s future. Critical. In fact, in business-friendly rankings, it is the No. 1 [criterion] in business-friendly rankings.
The first thing we have to do is preserve [Virginia’s] right-to-work [law]. The second thing we have to do is, we have to get the cost of business down. The way we’re going to get cost of business down is we got to carve back the amount of red tape that’s been piled on businesses.
I was just speaking with the owner of a small business. She told me she spends between two and three hours a day filling out paperwork for Virginia. A day. This is just almost debilitating for small businesses right now. We’ve got to carve back the regulatory burden that’s been placed on so many businesses. It doesn’t mean we’re going to let them do anything they want. It’s just become so cumbersome, that they can’t even do their business.
The second thing we have to do is increase the cycle time for [permitting]. The cycle time to get a permit is so long today in order to build something. We actually have to have set timeframes, and we absolutely have to give people clear criteria, because we know that when there’s an extended permitting process, we’re not going to get things done.
Third, we have to create sites across Virginia that are ready for businesses to develop, and we do not have any Tier 4,
Tier 5 sites that are shovel-ready for businesses to get going. [Editor’s note: While Virginia has a few dozen shovel-ready, Tier 4 or Tier 5 industrial sites, only a few are large enough for 500-acre or larger mega-projects, and those sites would require additional infrastructure to accommodate such projects, according to the Virginia Economic Development Partnership.]
I recommended that we include up to $200 million out of the American Rescue Plan money to be put forth to site readiness across Virginia so that companies can move here.
Finally, we have to change Virginia’s culture into an innovation state. New business formation, new business starts in Virginia have basically been zero, and Virginia was ranked 49th in the country [for] best place to start a business. [Editor’s note: This ranking comes from The Blueprint’s January 2021 ranking of best places to start a new small business.]
We don’t have any innovation going on, and we know that in order to have robust job growth and economic development, you have to have new business starts, and you have to be viewed as a good place to innovate and start a company.
That’s a very succinct list of things we’ve got to go get done, and that’s what I’m going to be really focused on in order to fundamentally change our business environment. There [are] some short-term things we have to do. I called for a 12-month tax holiday for small businesses that have less than $250,000 in net income. Those businesses deserve a chance to get back on their feet as we come out of this pandemic, because they need to get going.
VB:Does Virginia strike the right balance between workers and businesses? Do you support the recent changes to minimum wage and overtime laws?
GOP gubernatorial candidate Glenn Youngkin addresses his supporters during an Aug. 26 rally at CommUNITY Church in Salem. Photo by Natalee Waters
Youngkin:They’ve been passed, they’re in place, and we’re going to grow an economy to support it. Sometimes I’m a little more practical than philosophical. One of my goals, in fact, is to get Virginia’s economy growing at a pace that will support job growth and wages that in fact will lift up all Virginians.
Quick side note: I don’t believe that minimum wage is lifetime maximum wage. I think it’s a place to start. Therefore, we want to build an economy that in fact has economic growth … [that’s] 2.5% to 3% [growth] vs. the 1.2% that we’ve seen under Terry McAuliffe and Ralph Northam. That’s real GDP growth, and we’ve got to get moving at least twice the pace we’ve had.
When I’m governor and we get this economy moving at 2.5% to 3%, we’re going to create 400,000 jobs during that period, not 175,000. By the way, we have a stretch target to create 500,000 jobs. We’re going to have 10,000 new businesses that get started. We’re going to reinvigorate Virginia as a great place to start a business and to innovate. That will create opportunities across Virginia and lift up all Virginians, not for minimum wage jobs only, but for all jobs.
VB:If the federal infrastructure package passes, what would be your priorities for Virginia?
Youngkin: Our infrastructure, again by CNBC’s poll, was ranked 24th in the country, and we must be at least [in the] top 15. Given the natural infrastructure that gives us such an advantage with the Port [of Virginia] in Hampton Roads, with our highway infrastructure, our location, we should absolutely be a top player with infrastructure offerings to business and to Virginians.
First place that we need to invest in is high-speed internet access for rural Virginia. I agree with the Northam administration: $700 million is a good number to invest in order to get that done, but I think their pace is way too slow. Terry McAuliffe was talking about broadband internet access when he was running for governor in 2009, and then when he was actually elected governor in 2013, he didn’t get it done.
We actually have to finish all the work around our port. In fact, there’s some final dredging that needs to get done in order to get it to the right depths.
I think one of the great opportunities is to invest in our highway system. Yes, we are finishing up the [Hampton Roads Bridge-Tunnel] expansion … and there’s a widening on [Interstate] 64. We need to finish that widening all the way up into Richmond, but there is a tremendous opportunity for us to invest in [U.S. Route] 58. We can create along Highway 58 an industrial and logistics center because it connects right into the port. It connects to all of our major interstates, and it actually runs through incredibly available space for economic development.
Finally, I do think we need to invest in our airports. We need to expand cargo capacity in Dulles, and we need to invest in flights and connectivity in our other airports around Virginia.
VB:Do you think Donald Trump won the 2020 election, and how does this affect your ability to work with the White House?
Youngkin: I have absolutely been clear that Joe Biden was legitimately elected our president.
VB:How can lagging economies in rural Virginia catch up to our more prosperous metro areas?
Youngkin: Through focus [and] a governor who understands how to get things done and keeps his promises.
With Southwest Virginia, there [are] some incredible opportunities. The enabler is high-speed broadband internet. We have to get that done. We’ve got to get it done fast, but then you begin to look across industries that should — and will in fact — have a great footprint in these areas vs. logistics. We should absolutely have logistics hubs that are connected via road and rail.
Second is manufacturing. When we invest in site development and have 500-acre Tier 4 sites available, then big manufacturing will come. We [also] have to maintain our right- to-work status. We have to get our cost of doing business down.
Finally, there’s no reason why we shouldn’t be drawing into Virginia agricultural processing opportunities. In the meat processing business, in the dairy milk processing business, in lumber.
There are real opportunities for us to press forward in Southwest Virginia and Southside Virginia around sectors that we can attract and build. We must prepare our workforce for these opportunities as well. Today, we’ve seen the sad reality that across Virginia we’ve lost our focus on career and technical education.
I think it’s important to point out the discrepancy in our education system right now. All but one Virginia university offers sociology degrees, and only two offer systems engineering degrees. We’ve got to rethink how we’re preparing people to take these jobs of the future that are going to present themselves. This is an opportunity for us to rethink our K-12 education and also higher education.
Four Hampton Roads companies made it into the elite top 1,000 of this year’s Inc. 5000 list of the nation’s fastest-growing private companies, based on revenue growth during the past three years.
Although many industries were affected by the COVID-19 pandemic last year, the region’s top-ranked Inc. 5000 businesses are in government contracting and real estate — sectors that managed to maintain and, in some cases, exceed previous years’ growth.
Newport News-based Markesman Group, a federal contractor, ranked first in the region and 11th in the state at No. 291. It was founded in 2014 by U.S. Air Force veteran Daniel Markes and his childhood friend Alex Wang, who serve, respectively, as the company’s CEO and chief operating officer. Markesman Group provides IT services for government and military clients and is certified through the state’s Virginia Values Veterans (V3) program, which trains and assists companies on hiring military veterans.
Markes says it’s been a challenging 12 months as the United States began its drawdown in Afghanistan. His company, which earns about $15 million a year, saw its Afghanistan work worth $4 million to $5 million decline by roughly 75%. It also led to the layoffs of 20 intelligence analysts who supported the company’s operations in Afghanistan. However, Markesman shifted resources to focus on other services and was later able to hire 40 cyber-engineers.
“[We] increased lost revenue by more than double,” Markes says. “We replaced that revenue retraction with $10 million in revenues within the intelligence community by providing language-enabled cyberanalysis.” The company also opened its new offices in Newport News in February 2020 just before the pandemic shutdown, and the space remains essential for classified projects, Markes notes.
In all, Markesman Group grew by 1,583% over the past three years, and it is currently in the process of launching two joint ventures and increasing its ratio of primary contracts to subcontracts. In recent years, Markesman has served as a subcontractor for federal contracts awarded to Leidos Inc., General Dynamics Information Technology Inc. and Northrop Grumman Corp.
Other Hampton Roads government contractors on this year’s Inc. 5000 list include Virginia Beach-based Kern Technology Group LLC at No. 336, up from its 2020 ranking at No. 407, and Stratas Corp. at No. 535. Like Markesman, both companies work on federal contracts — Kern’s specialty is the U.S. Navy, and Virginia Beach-headquartered Stratas subsidiary StratasCorp Technologies has won places on several defense contracts, specializing in electronic warfare, logistics support, shipyard IT services and more. Kern reported 1,399% revenue growth over the last three years, while Stratas saw 904% revenue growth.
Ranked No. 793 on this year’s Inc. 5000, Priority Title & Escrow has appeared on the list four years in a row, but this is the first year it has broken into the list’s top 1,000 companies. Founded in 2005, the Virginia Beach-based real estate company provides settlement services. It saw 617% revenue growth over the past three years.
There was a lot of stress for the company early in the pandemic, notes founder and CEO Joseph LaMontagne. “In April [2020], we saw a lot of deals in our pipeline fall off because people didn’t know what would happen,” he says. “They said, ‘I can’t refinance or buy a house because I’m jobless.’”
However, that period passed quickly as interest rates fell rapidly, and Priority “was inundated with a massive amount of business from the end of April on,” LaMontagne says.
Over the past two years, Priority doubled its staff to 400, which allowed the company to meet demand, he says. And adding online notarization services for closings allowed customers to be served remotely during the pandemic. In 2021, the company outranked 11 other title companies nationwide on the Inc. 5000.
The military’s impact on Hampton Roads is unmistakable.
Drive along the Hampton Roads Bridge-Tunnel and it’s nearly impossible to miss the hazy gray of U.S. Navy vessels docked at Naval Station Norfolk, the world’s largest naval station. A few minutes spent in Virginia Beach and one is likely to hear the roar of a Navy F/A-18 fighter jet — the sound of freedom, some locals call it — well before it’s spotted overhead.
Hampton Roads is home to five branches of the military scattered across nine major installations, though the Navy plays the largest role, with more than 150,000 military and civilian employees and contractors, according to Navy Region Mid-Atlantic’s most recent economic impact statement, released in December 2020. A mid-year economic forecast from Old Dominion University predicts direct spending in the region by the Department of Defense will reach $24.8 billion this year.
Extrapolate that to include indirect spending, and the military accounts for about $40 billion of the region’s estimated $100 billion gross domestic product — or about $4 out of every $10 spent in 2021 — says Robert McNab, director of ODU’s Dragas Center for Economic Analysis and Policy.
“If we look at comparable areas, or larger areas in the United States, Hampton Roads has the largest share of economic activity that is attributable to the Department of Defense,” McNab says.
The DOD’s impact includes not only some of what active-duty service members and their dependents may spend, but also support contracts and spending by shipyards and other workers involved in supporting the military.
Industrial partners such as Newport News Shipbuilding, a subsidiary of Huntington Ingalls Industries, the largest military shipbuilder in the nation, have a major role in the region’s economy.
The shipyard’s construction of the future USS John F. Kennedy, the second in the Navy’s Gerald R. Ford class of nuclear-powered aircraft carriers, is about 83% complete and early manufacturing is underway on the third Ford-class vessel, the USS Enterprise, Vice President of Navy Programs Matt Needy says. Also, earlier this year, the shipbuilder announced a $2.9 billion contract for midlife refueling and complex overhaul of the Nimitz-class aircraft carrier USS John C. Stennis.
Not only does the Navy rely on industry to build its ships, it relies on industry to fix many of them, too. Bill Crow, a retired Navy captain who spent his active-duty career as a surface warfare officer, is president of the Virginia Ship Repair Association, which includes about 30 shipyards — more than 80% of which work on Navy vessels — and another 270 contractors and subcontractors.
Ship repair was deemed an essential industry to the country’s national security throughout the COVID-19 pandemic. Crow says the virus and subsequent shutdown of other industries didn’t appear to affect any local work scheduled by the Navy.
“If you drive over [Norfolk’s] Berkley Bridge — which has pretty much been the case throughout the pandemic — you will see that there along the waterfront on the eastern branch and the southern branch of the Elizabeth River in the private yards, there are multiple ships,” he notes.
But while the military may be one vast section of the local economy, it is not immune to federal budget cuts and congressional decisions. As a possible example, the Navy has proposed decommissioning more than a dozen vessels in its upcoming budget to make way for new technologies. At least five of those are aging guided missile cruisers homeported in Hampton Roads, Crow says. “That’s five less that our shipyards have to consider and that are in the inventory for them to repair here in this port.”
McNab also warns that other weapons systems, like the third and fourth Ford-class carriers, have drawn the ire of Congress over the years. Those nuances make the military’s outsized impact on the region a double-edged sword. While DOD spending might provide a buffer for the local economy, too much dependence on it has caused the region to lag because of a lack of a diverse private sector, he says.
However, the region is focused on diversifying, including in unmanned systems and offshore wind, says Doug Smith, president and CEO of the Hampton Roads Alliance. Smith sees a place for the military there, too. Thousands of service members retire annually, and the alliance views those highly skilled veterans as a readymade workforce and a selling point for attracting companies to the region.
About 40% of veterans stay in the region, says Craig Quigley, a retired rear admiral who leads the Hampton Roads Military and Federal Facilities Alliance.
“We’d love to make that number higher, and if we can retrain them, get them into a good job, make sure their spouses have [the] opportunity to pursue their career desires as well, then all other things being equal, we think we’d have a fighting chance of keeping them right here … [to] contribute to the workforce,” Quigley says.
Read the feature on sea level rise in Hampton Roads.
Although local, state and federal government officials are leading coordinated efforts to combat flooding, other groups in Virginia see business potential from the crisis.
The OpenSeas Technology Innovation Hub, a collaboration between Old Dominion University and William & Mary’s Virginia Institute of Marine Science, is working with ODU’s Institute for Coastal Adaptation and Resilience (ICAR) to find commercial opportunities for resilience innovations.
“If it just sits on a shelf somewhere, it’s not providing social value,” says Jerry Cronin, OpenSeas’ executive director. “You go for the moon. Sometimes you get the moon.”
For example, OpenSeas is working with Ferguson Enterprises to develop sensors that detect groundwater inflow into wastewater treatment plants. “Most cities have a lot of freshwater that leaks into the pipes and goes to treatment plants which exceeds the plants’ capacity, especially during floods,” Cronin explains. “Nobody has been able to come up with a complete solution, but there’s the opportunity for someone in the future.”
Also, the Norfolk-based nonprofit RISE, which has awarded more than $5 million to support 34 startups and small- to medium-sized businesses in testing their resilience technologies since 2018, is also part of the Coastal Resilience and Adaptation Economy initiative to cultivate innovation and growth in the state’s water economy. Earlier this year, the initiative received a $2.9 million grant, funded in part by GO Virginia, to address rural and urban flooding issues.
“Initiatives dealing with sea-level rise not only focus on avoiding risks and mitigation, but there are also innovation opportunities,” says Nancy Grden, executive director of ODU’s Hampton Roads Maritime Collaborative for Growth & Innovation. “Broader collaboration and focus on using innovation to solve problems is really important to our region. No one group can solve it on its own because it’s a very comprehensive issue.”
With early voting starting the next day, Virginia gubernatorial candidates Terry McAuliffe and Glenn Youngkin came out swinging in their Sept. 16 first debate, sniping over issues ranging from coronavirus vaccine mandates to abortion in what The Washington Post described as a “bare-knuckled” sparring match at the Appalachian School of Law.
Democratic former Gov. McAuliffe dismissed his rival as a “Trump wannabe,” while GOP candidate Youngkin, 54, offered mock concern for his 64-year-old opponent’s health.
Virginia voters have until Nov. 2 to decide between McAuliffe, a champion fundraiser seeking a second (nonconsecutive) term, and Youngkin, a political outsider and retired equity fund CEO with a hefty personal bankroll and a blank public record. Both men say they’ll be the best governor for business and both are willing to shell out record sums to land the job.
That race, along with all 100 House of Delegates seats also on the ballot, will determine whether Democrats retain the power over state government they gained in 2020, when the party assumed majority control of the legislature for the first time since the 1990s.
An early September poll by The Washington Post and George Mason University’s Schar School of Policy and Government showed the gubernatorial race in a virtual dead heat, with McAuliffe leading Youngkin by three percentage points, within the margin of error. Political analysis site FiveThirtyEight also noted in mid-September that the contest was shaping up to be much tighter than anticipated. McAuliffe’s previously assured lead stands to be harmed by President Joe Biden’s flagging approval ratings, the site noted, as well as Youngkin’s willingness to pour millions of his own money into the race. Additionally, an internal Youngkin campaign poll found that third-party, progressive Liberation Party candidate Princess Blanding could pull enough support away from McAuliffe to cement a Youngkin victory.
Virginia is the only U.S. state that doesn’t allow governors to serve consecutive terms, and McAuliffe, if elected, would be the state’s first two-term governor since Mills Godwin in the 1970s.
Youngkin, a first-time political candidate and former co-CEO of Washington, D.C.-based private equity firm The Carlyle Group, triumphed over better-known candidates to win the Republican Party of Virginia’s unassembled convention of 30,000 delegates who cast ranked-choice ballots at 39 sites across the state on May 8.
From Jan. 1 through Aug. 31, Youngkin raised $35.26 million, including $16.5 million of his own money, and had $6.03 million in cash on hand. During the same time period, McAuliffe raised $26.06 million and had $12.6 million in the bank. As of Aug. 31, Youngkin had spent $29.24 million to McAuliffe’s $18.99 million — a difference made even starker considering that more than half of McAuliffe’s expenditures went towards campaigning for the June 8 Democratic primary. Spending a combined $48.23 million by Aug. 31, Youngkin and McAuliffe seem on track to match or exceed the record-setting $65 million spent in the 2017 Virginia gubernatorial race.
“Youngkin obviously has immense personal resources to bring to bear here,” says Kyle Kondik, managing editor of the University of Virginia Center for Politics’ political newsletter and website, Sabato’s Crystal Ball. “One thing that’s interesting is that McAuliffe is the one who is trying to nationalize this race, because he wants people to think of Youngkin as Trump so that Democratic voters will be motivated to come out. Youngkin wants this to be more of a localized race. He’s muddying his ideology and political background, representing himself as a nonpartisan business type — almost like Mark Warner in reverse, 20 years later.”
The 2021 Virginia governor’s race headlines a ballot that includes state house races and two other statewide races. Democratic state Del. Hala Ayala and Republican former Del. Winsome Sears are vying for lieutenant governor. And two-term Democratic incumbent Mark Herring and Republican Del. Jason Miyares are running for attorney general.
Democrats currently hold a 55-45 seat advantage in the House of Delegates, and Republicans are laser-focused on winning the six seats they need to overturn the Dems’ new, still-vulnerable majority. All but eight seats are being contested by both major parties in 2021.
Bellwether status
The governor’s race so far looks like an uphill fight in both directions.
McAuliffe benefits from his quasi-incumbent status but is running against historic trends, given that only one Virginia candidate since the ’70s has won the governorship after their party won the White House. That lone exception? McAuliffe himself.
“We are the ultimate bellwether,” says former state Del. Chris Saxman, executive director of Virginia FREE, a nonpartisan business advocacy group. “We come before and after every major national election. People forget how quickly things can change. One, the losing party is highly motivated to win the next round. Two, the winning team from the previous November doesn’t have nearly the juice it had a year ago.”
Youngkin, however, must contend against antipathy toward Trump and CNBC’s recent ranking of Virginia as America’s “Top State for Business” for an unprecedented second time in a row.
“The Youngkin campaign had a strategy of talking about Virginia’s economy being in a ditch,” says Stephen Farnsworth, a political science professor at the University of Mary Washington. “That strategy disappeared when Virginia was named the No. 1 state for business. That ranking has forced Republicans to retool. When a state’s No. 1, you can’t argue the incumbent has driven it into the ditch.”
Instead, Youngkin pivoted to campaigning on hot-button GOP issues such as critical race theory, as well as claiming that McAuliffe is “too dangerous for Virginia,” citing the state’s 40% increase in murders during McAuliffe’s tenure, while not acknowledging that Virginia was also then the fourth-safest state in the nation for violent crime. Meanwhile, McAuliffe, who supports vaccine mandates for people ages 12 and above, has tried to paint Youngkin, who opposes mandates, as an “anti-vax” extremist, echoing Youngkin’s “dangerous for Virginia” rhetoric.
Second bite of the apple
A close friend of former President Bill Clinton and former Secretary of State Hillary Clinton, McAuliffe spent decades in politics as a fundraiser and chair of the Democratic National Committee before his first run for governor in 2009, when he lost in the Democratic primary. He ran successfully four years later, beating Republican Attorney General Ken Cuccinelli. McAuliffe began his term in 2014 as the state continued emerging from the Great Recession, with seasonally adjusted unemployment rates steadily decreasing from 5% in January 2014 to 2.6% in December 2018. He dubbed himself “the jobs governor” and took glee in traveling around the commonwealth for economic development announcements.
Yet McAuliffe was constrained by a Republican-held General Assembly, which hampered his budget initiatives and frustrated his attempts to adopt Medicaid expansion. His successor, Democratic Gov. Ralph Northam, has seen more success, especially after Democrats won control of the General Assembly in the 2019 elections.
Virginia has radically changed since then, widely viewed as the most progressive Southern state. Its newly empowered Democratic legislature passed a flood of consequential laws ranging from abolishing the death penalty and legalizing marijuana and casino gaming to mandating that Virginia’s utilities generate electricity from carbon-free sources as soon as 2045. Notably, the Assembly also has mandated increases in the minimum wage, putting Virginia on a course for a $15 minimum wage by 2026.
Virginia’s Democratic Party has shifted leftward, too, but McAuliffe used his fundraising prowess and endorsements to win the 2021 primary over four more progressive and diverse challengers, including two contenders who could have been the party’s first Black woman gubernatorial nominee.
“McAuliffe has a number of advantages as a candidate,” Farnsworth says. “The two biggest ones are, he knows how to win statewide — he’s done it. And he knows how to be governor — he’s done it.”
High-wire act
The contest could also prove to be a preview for a potential 2024 Biden-Trump rematch in a state where Biden defeated Trump 54% to 44% in 2020. Trump retains a firm grip on the Republican base, but it’s less clear how much he still drives people to vote against his political party. That variable animates both the McAuliffe and Youngkin campaigns. Youngkin emerged in May as victor of the six-candidate Republican field. A Virginia Beach native who attended Rice University on a basketball scholarship, Youngkin drew attention for his charisma, business background and organizational savvy, building a team that outmaneuvered a slate of more experienced candidates in the GOP’s pandemic-era convention.
His nomination was greeted with near-universal acclaim by Republicans. He achieved it by walking a careful line between the party’s various wings. That balance appears more tenuous during the general election as McAuliffe has sought to pounce on any feint toward social conservatives or Trump on Youngkin’s part. That included a leaked video of Youngkin saying he must limit his comments about abortion for fear of alienating moderate voters, but that he’d go “on offense” if Republicans win. (Abortion moved to the forefront of the gubernatorial race in September, after Texas’ GOP-led legislature passed one of the strictest anti-abortion laws in the nation.)
“Glenn has been an incredible success and will truly Make Virginia Great again,” Trump said in a July statement endorsing Youngkin. “Terry McAuliffe was a failed and unpopular governor whose only claim to fame was his relationship with crooked Hillary Clinton — how did that work out? If Virginia wants to open up and take advantage of its great and virtually unprecedented opportunity, Glenn Youngkin is the very successful businessman that will get them there!”
Youngkin, however, has rarely spoken about the former president, and Trump has made no campaign appearances for Youngkin or other Virginia candidates.
But even if the 45th president remains relatively mute about Virginia, Democrats won’t let him be forgotten.
“Nearly every McAuliffe ad is likely to mention Trump,” Farnsworth says. “It’s a winning hand for the Democrats, and they’re going to use it.”
Swinging suburbs
The races for statewide office and a majority in the House of Delegates will likely come down to a handful of competitive regions, largely around the suburbs of Northern Virginia, Hampton Roads and Richmond.
Over the past two decades, Virginia’s changing demographics steadily inched the state toward Democrats before Trump’s 2016 election dramatically accelerated the trend, especially in the suburbs. Chesterfield and Loudoun counties, for example, swung 7 and 10 points, respectively, toward Democrats between 2012 and 2020.
“People in the suburbs were absolutely repulsed by Donald Trump in Virginia,” Saxman says.
Winning those voters back is a crucial part of the Republican strategy.
“There are a lot of people who either are new to Virginia or maybe voted for Republicans in the past but now are functionally Democrats,” Kondik says. “That’s an important group for Youngkin. He’s not going to win places like Loudoun and Prince William counties, but he can’t get blown out in them as Republicans have in recent years.”
Virginia Beach is another important swing area. If Youngkin can get close to McAuliffe there, Kondik says, he might boost enough down-ballot candidates to flip some of those seats to the GOP. “Even if McAuliffe wins the governor’s race but Republicans flip the House of Delegates, that’s a pretty successful election for them.”
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Youngkin, a first-time political candidate and former co-CEO of Washington, D.C.-based private equity firm The Carlyle Group, triumphed over better-known candidates to win the Republican Party of Virginia’s unassembled convention of 30,000 delegates who cast ranked-choice ballots at 39 sites across the state on May 8.