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.”
Flexibility is once again the name of the game for meeting planners in 2021.
In 2020, most planners’ clients postponed or canceled conferences, while others decided to go virtual instead of meeting in person. This time around, it’s somewhat safer to meet due to COVID-19 vaccines, but outbreaks are still occurring in Virginia because of the delta variant of the coronavirus.
Still, says Marty Malloy, principal and co-founder of Henrico County-based Convention Connections Inc., “We’re creatures of wanting to interact and meet. All of our clients want to meet and get back together, so that’s extremely encouraging.”
Since April, CCI has organized events in Orlando, Florida; Austin, Texas; New Orleans and Nashville, with 10 more events scheduled for the rest of 2021 and about 50 more next year.
Laurie Campbell, president of Meeting Professionals International’s Virginia chapter, echoes Malloy’s opinion.
“People are ready to get back together,” she says. “I think moving forward most people want to see a relaxation of any kind of restrictions, but they’re still respectful of those people who are timid or still concerned about exposure or anything like that.”
Also, companies and organizations have to consider costs when planning hybrid meetings, she notes. Virtual meetings have the potential to increase attendance, but for now, the technology required increases the expense of conferences, says Campbell, senior director of sales and marketing of Newport Hospitality Group, a Williamsburg-based hotel management company. However, she does predict that virtual meetings will eventually become standard and less expensive to produce.
Today, notes Malloy, the tricky part of planning is keeping up with varying state and city ordinances regarding pandemic safety measures. One event that CCI had planned for July in New Orleans originally had a capacity limit of 250, but when the city increased capacity limits, CCI had to rapidly plan for more people. “The ball moves pretty quickly,” he says.
Campbell echoes that need for flexibility. “As we get a new announcement from every governor, then you have to be ready to bend,” she says. “As the hotel or the venue comes up with a situation that they need you to work with them on, then you’ve got to be able to bend.”
Individual venues are operating differently within the rules as well, so meeting planners need to be ready to adapt to new requirements. Conference and meeting host organizations also have differing guidelines, such as requiring masks or social distancing.
Another issue is the pent-up demand for meeting spaces. Everybody wants to have the conferences that they couldn’t hold last year and to get back to their normal meeting schedules, Malloy says. So, booking is competitive.
One of Malloy’s biggest clients, CrimeCon, a convention for true crime aficionados, was originally booked at the Orlando World Center Marriott in 2020. Although the organizers were able to hold this year’s CrimeCon as scheduled in Austin, Malloy was not able to book the Orlando center again until 2023.
The ongoing national labor shortage also has limited availability and services at some conference hotels. Joblist, a workplace website, released the results of a survey in July finding that 69% of former hospitality workers responded that they had no intention of returning to the industry.
Campbell says she didn’t see the labor shortage having a direct effect on MPI’s conference at the Richmond Marriott earlier this year but adds that it took an “all hands on deck” attitude, with all staff — including hotel managers — stepping in to help.
“It’s a bit like the duck on the water — you don’t know what the legs are doing, but it looks so smooth up top, which is what our industry is all about,” she says.
And although some hotels are seeing cancellations or slowing demand in response to the delta-related spike in COVID cases late this summer, Campbell and Malloy say plenty of organizations and businesses are still resolved to meet in person as planned.
People seem to have accepted that some risk is part of the deal, the planners agree. Malloy points to fans who have returned to attending sporting events and concerts.
“As a meeting planner, you’ve got to roll with the punches,” Campbell says. “What we do have to realize is that [COVID] is going to be with us probably forever. We just have to learn how to work with it and work around it, like we do everything else.”♣
The Shenandoah Valley’s economy is rebounding, but the region is struggling with a poor labor force participation rate, even compared with the national rate of 61%.
In Augusta, Bath, Highland, Page, Rockbridge, Rockingham and Shenandoah counties, only 50% of potential workers are actually employed, says Jay Langston, executive director of the Shenandoah Valley Partnership, calling the stat “abysmally low.”
To address this issue — and its underlying causes — James Madison University convened a conference in August, seeking input from more than 130 stakeholder companies and organizations, including the Virginia Economic Development Partnership, GO Virginia and the Federal Reserve Bank of Richmond.
Four overarching issues affect labor participation: transportation, workforce training, affordable housing and child care, says Nicholas J. Swartz, associate dean of JMU’s school of professional and continuing education. Four working groups created from the conference will tackle each of these challenges in coming months.
“A champion will represent each group,” Swartz explains. “They’re going to determine what the problem actually is, including the root causes and how to address them. I want to move the needle.”
Part of the work begun in August was establishing the Shenandoah Valley Collective Action Pact, an agreement signed by more than 100 organizations and businesses to collaborate on short-term and long-term solutions for the region’s problems.
Swartz hopes that other regional anchor institutions in addition to JMU will also take leadership roles in the pact, as some solutions may take longer to enact. However, improving child care options and transportation access are immediate issues that he hopes to see addressed soon.
One potential answer to the transportation problem, Langston says, may be found in the poultry industry, where company vans shuttle employees to and from work.
Housing also is a barrier, Langston notes, because while “manufacturers are strapped for workers, if people are going to take jobs, they need a place to live” that’s affordable.
Also, career opportunities in manufacturing need to be better communicated. “There are well-paying, good jobs,” Langston says. “The sky is the limit, but people don’t perceive those jobs in that manner.”
Laura Toni-Holsinger, executive director of United Way of Harrisonburg-Rockingham County, notes that child care availability — never great locally — has dwindled further in the past two years. She hopes private and federal stimulus money investments will bring long-term solutions.
Ultimately, says Swartz, “We really want this to be a model for other areas of the commonwealth.”
Virginia Business Deputy Editor Kate Andrews contributed to this story.
Over the next several years, the Hampton Roads area will need about 8,000 more people ready to take skilled jobs in the maritime industry, officials at the Maritime Industrial Base Ecosystem estimate.
Leaders from higher education and other organizations across the Hampton Roads area are stepping up to make sure those positions don’t go unfilled.
“We talk about it on a daily basis,” says Tamara Williams, vice president of workforce solutions for Tidewater Community College. “We are in deep collaboration with our industry partners on their needs.”
In April, Gov. Ralph Northam announced that TCC’s maritime trades programs had received a $100,000 grant from the state’s GO Virginia economic development initiative. TCC administrators are using the money to expand the school’s welding program by 33%, which means accommodating an additional 40 students per year. Some of the grant money also will go toward helping TCC relocate its marine coating program from Suffolk to the school’s Skilled Trades Academy in Portsmouth. The program, which trains students how to prep, treat and paint ship surfaces to protect vessels from corrosion, will expand to accommodate an additional 84 students per year.
In August, TCC staffers were busy installing 12 new welding booths at the Skilled Trades Academy. Once completed, the school will offer 22 welding booths, making it one of the area’s largest welding labs, according to Williams.
TCC, which was named a Center of Excellence for Domestic Maritime Workforce Training and Education by the U.S. Department of Transportation’s maritime administration in May, also is developing mobile welding and electrician-training labs, Williams says. She hopes to have both on the road by early 2022.
In Franklin, Paul D. Camp Community College recently purchased a mobile welding lab for students enrolled in intensive, noncredit training. Camp, Tidewater and Thomas Nelson are part of the Community College Workforce Cooperative, an initiative launched this year to create a single point of contact for workforce training at the schools, led by executive director Todd Estes.
The goal of putting programs already offered by the community colleges on the road, Williams explains, is to make sure people in low-income neighborhoods who don’t have reliable transportation have the opportunity to take part. “That’s why we want to take training to the community,” she says.
Leaders at Hampton Roads’ community colleges also are considering expansion of the Virginia Ship Repair Association’s pre-hire training program, Estes says. The program involves short, intensive regimens that introduce students to the skills necessary to enter ship repair trades, including coating, marine electrical and welding.
Since 2017, about 2,000 students have completed the pre-hire program, and 90% have been hired directly into one of six trades in the shipbuilding and ship repair industry, he says.
“We hope to build upon the success of this program and great partnership by adding program content to address advanced skills, by expanding offerings to new in-demand trades and by increasing overall program capacity so we can serve more students,” Estes says.
The three schools also are preparing to train workers for positions outside traditional shipbuilding and repair positions — particularly in the offshore wind sector. Hampton Roads economic development officials are working to establish the region as a supply chain hub for the development of offshore wind farms along the East Coast, such as Dominion Energy Inc.’s $7.8 billion Coastal Virginia Offshore Wind project, which aims to erect about 180 massive wind turbines
27 miles off the Virginia Beach coast, beginning in 2024.
“We know that that’s going to mean even a larger increase [in the number of] workers that are needed,” Williams says.
TCC recently used a $1 million allocation from Virginia Beach City Council to purchase equipment for offshore wind career training, including augmented reality stations and sea survival equipment. Tidewater hopes to launch offshore wind-related training classes in late 2022 or early 2023, Williams says.
Also, Virginia Beach-based Centura College, a private, for-profit institution, started its one-year turbine technician program in February in collaboration with the Mid-Atlantic Maritime Academy, a private vocational center in Norfolk.
Higher education leaders aren’t the only ones working to address the maritime labor shortage. “That’s what we’re here to do — try to make sure we fill these jobs down here,” says Shawn Avery, Hampton Roads Workforce Council president and CEO.
With $663,696 in GO Virginia grant funding, the workforce council’s employees are working closely with maritime employers to identify staffing and training gaps that need to be filled, collecting labor market information and business intelligence along the way. “Then we take that information and give it to the educational partners,” Avery explains.
Hampton Roads workforce development leaders also hope to tap individuals transitioning out of the military to fill some of the estimated 8,000 jobs needed in the maritime industry.
The Department of Defense’s SkillBridge program allows service members to complete industry training, apprenticeships or internships during their last 180 days of service. One option for SkillBridge participants in the Hampton Roads area is to enroll in the Marine Trade Training program offered by the Virginia Ship Repair Association. There, they learn about assembly, installation and maintenance of mechanical piping systems as well as various welding techniques used in the maritime industry.
“It kind of gives them an introduction to those skill sets and then they’re picked up by one of our local companies,” explains Steve Cook, chief innovation officer for the Hampton Roads Workforce Council.
After a tumultuous and unpredictable pandemic year, the executives leading Virginia’s largest publicly traded companies still brought home sizable pay increases in 2020.
While median salaries for Virginia’s top CEOs were down 0.7% in 2020, and their median bonuses were down 10.6%, last year Virginia’s top executives saw a huge increase in pay coming from stock options, restricted stock and stock appreciation rights, according to Equilar Inc., a California-based corporate leadership data firm.
Equilar conducted Virginia Business’ most recent top executive pay report, examining the earnings of 50 CEOs from 49 public companies in Virginia with annual revenues of at least $1 billion. (See data for the top 40 highest-paid Virginia CEOs of publicly traded companies on Pages 32-33.)
Average equity payments for Virginia’s top executives were up 15.4% this year, bringing the average total compensation (including salary, bonuses and equity) of Virginia’s 50 highest-paid CEOs of public companies to $7.14 million, a 4.9% increase from 2019, when they brought home total compensation packages averaging $6.8 million.
Charlie Pontrelli, a senior project manager for Equilar, says the double-digit increase in median total compensation was higher than executives had seen in prior years, and it was partially linked to fortuitous timing.
Equity payouts (stock options, restricted stock, stock appreciation rights) are valued on a grant date, usually in February or March. Last year, that meant many CEOs were paid huge sums in equity during early 2020 because of 2019’s success.
“2019 was a great year, and equity grant sizes reflect what the company had been going through prior to COVID,” he says.
Decreases in salary and bonuses were to be expected in 2020, Pontrelli says. As the pandemic wreaked havoc on cash flow, many businesses cut executive salaries and bonuses.
“If you are uncertain about your cash flows, it made sense to preserve cash during a crisis,” Pontrelli says. “Bonus payments being lower makes sense because of a downturn in sales, and most likely companies were not meeting goals they had set out at the end of the year.”
Nevertheless, Virginia CEOs fared better with their compensation than CEOs nationwide last year, according to Equilar data. A similar study of executive compensation among the S&P 500 showed that median CEO pay (including salary, bonuses and equity) for those CEOs increased 5% in 2020, half the rate that Virginia’s business leaders enjoyed.
The top three earners among Virginia’s CEOs of public companies in 2020 were:
Richard D. Fairbank, chairman, president and CEO of McLean-based Capital One Financial Corp. His 2020 total compensation was $20.1 million, largely thanks to a $16.75 million equity payout.
Christopher J. Nassetta, president and CEO of McLean-based Hilton Worldwide Holdings Inc., demonstrated how equity payments can salvage a rough year. Nassetta’s salary and bonus were down 61% from the previous year, as the hotel industry took a COVID-19 beating. But his equity payment of more than $18 million earned him second place on the list, with total compensation of $20.06 million during a year when Hilton fell off the Fortune 500 due to its losses from the pandemic.
Kathy J. Warden, chairman, president and CEO of Northrop Grumman Corp., the Falls Church-based Fortune 500 defense contractor, ranked third on the list, with total compensation of $19.66 million.
Courtesy photos
Linking pay to ESG
Executives across the globe are under increasing pressure to do more than boost the bottom line, though.
More and more companies are linking CEO pay to meeting environmental, social and governance (ESG) objectives. These ESG goals run the gamut, including improving a company’s safety record, expanding diversity among its workforce, reducing its environ-mental impact or improving employee compensation.
The one thing all ESG objectives have in common is recognizing that a company’s long-term value is more than just the total annual revenue.
This trend goes back more than 20 years, to when companies first began taking steps to be more environmentally friendly. But linking these nonmonetary outcomes to CEO pay is a newer development, says Don Lowman, a senior client partner with the global consulting firm Korn Ferry and a board member for the foundation of William & Mary’s Raymond A. Mason School of Business.
Lowman, who recently wrote a white paper on the topic, says that 44% of companies on the S&P 500 have at least one ESG objective linked to pay for at least one executive.
The bulk of bonus payments are still tied to financial performance, Pontrelli says, but executives who care about their end-of-year cash bonuses are being incentivized to give more than lip service to these nonfinancial goals.
And 2020 may have been the tipping point.
The COVID-19 pandemic, the racial justice protests following the police murder of Minneapolis resident George Floyd and increasing public concern over climate change have ramped up pressure on American corporate boards to focus on a variety of social goals, Lowman says.
“Boards have started to take this on as more of a priority. So many different stakeholders are putting pressure on companies around this,” says Lowman. “Some investors are making part of their criteria as to whether they invest in companies what kind of priorities they have surrounding ESG. There has just been a mounting pressure from a variety of constituents.”
Boards are increasingly making ESG metrics quantifiable, with executive compensation formulas factoring in achievements that had once been considered ideals to strive for, not hard targets to hit.
Executives in Virginia are no exception.
William Nash, president and CEO of Goochland County-based auto retailer CarMax, has a set of social responsibility objectives, including reducing the company’s carbon footprint and fostering the company’s long-term diversity and inclusion initiatives.
His goals are ambitious — reducing greenhouse gas emissions 50% by 2025 with a plan to achieve net-zero emissions across the company by 2050 in agreement with the Paris Climate Accords, according to a statement issued by the company.
At AvalonBay Communities Inc., the Arlington County-based real estate investment trust, 7.5% of Chairman and CEO Timothy Naughton’s 2020 bonus was based on the company’s score by GRESB, an independent organization that measures ESG performance for real estate companies and developers.
And Dominion Energy Inc. links 15% of Chair, President and CEO Robert Blue’s annual incentive plan to ESG outcomes.
Lowman says these types of arrangements aren’t just trying to appease activist investors or the public. There are long-term benefits to focusing on ESG objectives, but the return on investment may take years.
“[Companies think] the upside could be longer term. We’ll survive and sustain ourselves because our customers will think better of us [and] we’ll be able to attract and retain better talent, so over the long term this is going to add value to our enterprise even though in the near term this may cost us,” Lowman says, describing the mindset of boards that emphasize ESG goals.
Stephen P. Hills, former president and general manager of The Washington Post and an AvalonBay board member, recalls hearing conversations about environmental issues while leading The Post decades ago. The newspaper’s leadership team decided it was important, for both ethical and business reasons, he says, to take steps to reduce the company’s environmental impact.
Even though it has gotten increased attention in the past year, ESG isn’t the only factor that companies’ boards consider when determining CEO compensation packages, Lowman says. Firms also need to take into account other nonfinancial metrics that have a major impact on company’s success.
Take, for example, an airline, he says. On-time performance, efficient booking processes and customer satisfaction factor heavily into repeat business. All those nonfinancial metrics may be just as important to an airline’s board as goals such as improving diversity or reducing emissions.
“If they choose to carve out a nonfinancial metric like ESG, there are people in the organization who will say, ‘Wait a minute, we are putting too much emphasis on this one thing,’” Lowman says.
Another big question around ESG objectives is whether executives will take shortcuts to hit their marks. A CEO who wants to report higher average employee compensation could outsource the lowest-wage positions, for instance, or an executive who wants to improve equity could quickly bring on several employees from underrepresented groups, without really changing a company’s culture.
Hills and Lowman say those are risks with ESG objectives, and that’s why goals must be reasonable and executives need to be trustworthy.
“How do you provide the right incentives when the things we do now won’t even have any impact on the company for years to come?” Lowman says. “Study it carefully and consider both the anticipated benefits as well as the potential unintended consequences.”
Ultimately, it comes down to entrusting leadership to executives who see the long-term value in hitting these nonfinancial metrics.
“No system is a substitute for management,” says Hills, who is now the founding director of Georgetown Law’s Business Law Scholars program. “Almost any system can be gamed, so you have to trust your management team. You have to trust your CEO.”
Pay ratio
Regardless of whether a portion of CEO pay is linked to ESG goals, an executive’s total compensation can impact employee morale, says Jeffrey B. Arthur, an associate professor of management at Virginia Tech’s Pamplin College of Business.
“If a company is making a case to persuade employees that we are all in this together, and then the employees observe the executives getting big [pay] increases when employees aren’t, that inconsistency in messaging can impact perception of whether this company is following the guidelines they say they are,” Arthur says.
One of the metrics in Equilar’s analysis is pay ratio — total CEO compensation divided by the median pay of the rest of the company’s workers. Those numbers vary widely among the 50 Virginia public companies Equilar studied this year.
Verisign Inc., a Reston-based internet technology firm, has a median employee income of $194,590, ranking the highest for employee wages among the companies analyzed. Verisign’s pay ratio of 52 was also one of the lowest, meaning its employees earn closer to what the CEO makes when compared with the other 49 companies.
At the other end of the spectrum, Universal Corp., a global tobacco producer headquartered in Richmond, has a pay ratio of 2,502, and the median employee pay is $1,826 annually. But those types of disparities are to be expected, says Pontrelli, because Universal’s workforce is largely made up of seasonal part-time laborers, many working in developing countries. Verisign and other tech firms, on the other hand, are staffed by highly educated full-time workers.
“Pay ratio will vary a lot by industry,” Pontrelli says. “You typically have very low pay ratios in the tech sector with highly compensated full-time employees versus a business like Walmart, with mostly part-time workers.”
Average median annual pay for employees at Virginia’s 49 largest public companies this year increased as well, from $74,382 in 2019 to $79,125 in 2020, a 6.38% increase, according to figures from Equilar.
That could be a trend that changes in the coming year, Arthur says, as employees have increased leverage. Labor shortages, along with pandemic-related work expectations, have placed increased pressure on employers to boost wages.
“Wages have been relatively flat for a long time, and now it’s beginning to change,” Arthur says.
Capital-intensive industries, like manufacturing, are in the best position to boost wages in the coming year, he says.
But even if employees see an upward trend in take-home pay in 2021, they’ll still be keeping an eye on how the top boss’s pay raise compares to theirs.
“CEO pay gets headlines, and people pay attention to that,” Arthur says. “It’s public information, and so employees will react to what they see and what they hear.”
In the popular HBO TV series “Succession,” members of the Roy clan scheme, lie and backbite in an attempt to take over the family’s media empire once the patriarch steps down. The show, which reportedly filmed scenes in Richmond in May for its third season, is a satiric festival of twisted relationships and family dysfunction, and it makes for entertaining television. It’s hardly a stretch, either, to think that some of the unseemly shenanigans on the show were inspired by the ugly, public squabbling among members of such real-life family empires as Rupert Murdoch’s News Corp. and the late Sumner Redstone’s National Amusements Inc.
But for most family businesses, that kind of discord would spell doom. If a family business is to survive through multiple generations, its members usually need to find and agree upon a way to hand off the baton as smoothly as runners in a relay race. Statistically, though, that isn’t so easy.
Recent data from the Ohio-based Conway Center for Family Business says that just 19% of family enterprises make it to the second generation, 12% to the third and only 3% into the fourth generation and beyond. That sounds awfully dismal, but in an article earlierthis year in the Harvard Business Review, family business advisers Josh Baron and Rob Lachenauer argue that despite that seemingly high failure rate, family firms tend to outlive their public counterparts.
Because a single generation is generally considered to be 20 to 30 years, even family enterprises that go belly-up within one generation still last a lot longer than most publicly traded companies, which, on average, fold in a shocking 10 to 15 years, according to a Yale study. Even more stunning, the U.S. Census Bureau reports that 78.5% of all small businesses don’t even survive a year, usually because of inadequate management, insufficient financing, ineffective planning or marketing mistakes. And that’s not even taking into account the COVID-19 pandemic, which led to the direct closure of 200,000 establishments nationwide last year, according to an April report by the Federal Reserve.
Nevertheless, Baron and Lachenauer say that family businesses have remained optimistic about their futures: 68% of the 140 family-owned companies they surveyed last December believed they would be more efficient after the pandemic, more than half looked forward to new opportunities and 25% expected not only to survive but grow. That optimism and comparative staying power will be crucial to the nation’s economy, given that the Census Bureau says that family businesses account for about 90% of American enterprises, half of all employment in the country and half of the gross national product.
Katharine Ross, president of Ross Publishing in Chesterfield County, is part of the second generation leading the company. photo by Shandell Taylor
Heir raising
Family businesses can thank some built-in advantages for their relative (so to speak) resiliency. Patrick Soleymani, associate dean of undergraduate programs and an associate professor of management at George Mason University’s School of Business, says these businesses have “a certain level of trust of intent” in knowing that their relatives “will go above and beyond” for their companies, certainly not something that public companies can rely on with their workers.
Family businesses also don’t have to be beholden to stockholders demanding quick profits. They can look at the big picture and not make the mistake of overleveraging their assets to achieve rapid but often short-term gains. “No one is looking over their shoulder,” says Gary A. Ballinger, a professor of commerce at the University of Virginia’s McIntire School of Commerce.
Many family companies take immense pride in serving their communities and providing for their employees, he says, and “if they want to run their businesses in a public service fashion, they can do that, and they can tell everybody else to stick it.”
Still, those advantages can evaporate in the face of what is known as “the shirtsleeve curse,” which references industrialist Andrew Carnegie’s alleged observation that family businesses go from “shirtsleeves to shirtsleeves in three generations.” The reasons for that rags-to-riches-back-to-rags scenario can be many.
“Family companies are often started by someone with a passion, and the kids and grandkids might not share that passion,” says Paula Sorrell,
Ballinger
associate vice president of innovation
and economic development at GMU. Yet, even if the passion is there, the younger generation may not always be qualified to take over.
“A family business can be like a kingdom, with an heir, even if that heir is not qualified to be king,” says Soleymani.
Soleymani
The first generation sometimes can have a hard time letting go, too, or accepting advice from younger relatives who may be more attuned to the times. “Imagine as a child having to tell a parent that something is wrong,” Soleymani says — or having to take orders from your brother or sister. “Siblings may not listen,” he says, a truth that anyone who has a sibling would not dispute.
Even for nonfamily members of the business, the transfer of control between generations can be a fraught time, says Ballinger, and that can “disrupt the social networks at the firm.”
No single approach is guaranteed to bridge the generation gap or smooth such bumpy interpersonal dynamics, but a Harvard Business Review study published last year found that 94% of family firms surveyed had supervisory or advisory boards with about 31% family membership.
Outside advice
Katharine Ross, president of Ross Publishing Inc. in Chesterfield County, falls into that majority. Her magazine publishing house was founded in 1991 by John and Lori Ross, whose three sons, Brian, Craig and Katharine’s husband, Johnny,joined the business a few years later. She has worked in the firm for 20-plus years and was named president in 2018.
“Succession was not an overnight thing,” Ross says of her elevation to the company’s top job. “Authority, autonomy and trust grew over a long period.” Nevertheless, in 2010, she brought in nonfamily members to help explore new revenue streams.
“We live, eat and breathe what we do,” Ross says, reflecting the all-in attitude typical of family businesses, but “we needed a new perspective to pull from.” Her 28-employee company, which publishes Boomer magazine and Seniors Guide magazine, has since expanded into seven markets. It’s also boosted its online presence and has started a digital media agency subsidiary, Ross Media Solutions.
“Feedback is your friend,” Ross says, “even if it doesn’t always feel like that at the time.”
Keith M. Nichols, president of HandCraft Services in Richmond, which provides health care linens and uniforms for hospitals and other care facilities, also brought in advisers to give his business structure. He didn’t start out with Ross’s passion for the family enterprise, though.
“I had planned to be a cowboy,” he says, echoing Sorrell’s contention that not all members of families’ younger generations are eager to join the family fold. Nichols’ intention was to work in the business just long enough to make the money to buy a truck to take him out west, but then he met his future wife, and that was all she wrote. “It’s not a glamorous business,” he says, but “it isn’t boring,” either.
HandCraft Services President Keith Nichols originally wanted to be a cowboy, but he has stuck with the family business. Photo by Caroline Martin
HandCraft was founded by Keith’s father, John A. Nichols, in 1970 and was, at one time, the second-largest dry-cleaning business in Richmond. But after Keith Nichols and his brother, Jay, bought out their father in 1990, they began moving away from that sector of their business. “No one wears overcoats anymore,” Nichols says.
As they transitioned into the health care field, he and his brother divvied up responsibilities and made it a point not to second-guess one another, but in 2015, they brought in a consultant “to learn how to run a family business like a business, with clear-cut roles and accountability.”
Such advisers, Sorrell says, can help mediate honest but often uncomfortable conversations among family members. Soleymani calls it “family counseling: business edition.”
Imposing a formal structure on operations was the right thing to do for HandCraft. Nichols says his business “improved by leaps and bounds” and has grown to 500 employees. Today, the company only serves health care clients and, he says, it has an annual growth rate of 8% to 12%. The family’s third generation also has come on board. “They will be held accountable to perform at a high level,” says Nichols. “They have to understand what it takes to do the job.”
Home away from hom 0e
Other family-owned firms in Virginia have bucked the statistical need to bring in outsiders, yet have found success by keeping it all in the family.
Ramon W. Breeden Jr. founded The Breeden Co., a property development and management firm based in Virginia Beach, in 1961. While he remains the company’s chief executive and is active in every deal, his son, C. Torrey Breeden, joined the firm in 1998 after graduating from U.Va. with a business degree.He became the firm’s executive vice president about 15 years ago after working in all the company’s divisions to firm up his grasp on operations.
“There is no need to bring in outsiders/advisers,” Ramon Breeden says. “Our recipe of success is working, and there is no need to deviate.” That recipe includes refraining from dispensing advice to his son.
“Torrey, himself, is very skillful in his abilities,” his father says. “He may approach a deal differently than me, and that’s OK.” That formula seems to be working for the 400-employee company. In 2020, it did more than $350 million in business.
Richard “Den” Crallé III became the third Richard Crallé to run Farmville-based Green Front Furniture, taking over in 2018. Photo by Shandell Taylor
Richard “Den” Crallé III is of a similar mindset. He is the third Richard Crallé to run Green Front Furniture, and he knew exactly what he was getting into when he took over as president of the 120-employee Farmville-based retailer before he was even 30.
“I started off working summers, running up and down rug piles,” he says.
Like C. Torrey Breeden, Crallé hasn’t exactly been flying solo — his father, Richard Jr., and his mother, Terry, still work at the company. But the younger Crallé is the company’s president, and since assuming that role in 2018, he has added “new looks, new vendors and new lines,” modernized the store’s 1 million square feet of display space and installed a new point-of-sales system. His inaugural effort to sell rugs online “is going great,” he says.
Like a true millennial, Crallé is a believer in the power of social media, and he likes to appear personally in videos to promote Green Front products, a marketing tool that is unlikely to have occurred to people in his parents’ generation.
Not having to answer to a board has allowed him to be “more nimble” in responding to the changing market, Crallé says. “There’s not a lot of red tape.”
But of course, that freedom from outside oversight comes with a downside — almost no separation between work and home. “You never get a break,” Soleymani says. “You go on vacation with your business partner.”
The George Mason professor remembers how his own father, who started several family businesses, would run ideas past his captive audience in the car. It also has been said that family businesses are a classic case of capitalism at work and socialism at home, as family members are sometimes used as sources of free labor.
Tammi Ketterman is well aware of that dynamic. She and her husband, Dan, run Ketterman’s Jewelers in Leesburg. As children, all six of the Kettermans’ daughters appeared in ads for the family store, which was founded in 1988. Four of them, all grown up now, still work there. “They bring relevance,” Ketterman says. “I think we would have gone under without them.”
But she also remembers worrying that her girls would grow to resent the business, only seeing its demands and not its rewards. “If I have any regrets, it would be carrying unhappy experiences home to the dinner table,” she says. “That can be too much of a burden sometimes.”
It’s a burden that comes with the territory, though. However families choose to run their operations, the bottom line doesn’t really vary: Working in the family business will never be just a job, and leaving your work at the office is not going to be possible. Just look at the Roy clan of “Succession.”
Newport News-based defense contractor Aery Aviation LLC will add 211 jobs with the $15.3 million expansion of its headquarters, Gov. Ralph Northam announced Sept. 14. The aviation company will build a 60,000 square-foot hangar with access to the Newport News/Williamsburg International Airport runway and an engineering technology center to provide maintenance and modification services. Virginia competed with Maryland, Ohio, South Carolina and West Virginia for the project. (VirginiaBusiness.com)
Amazon.com Inc. established a career center and two new delivery stations in Hampton Roads, the e-tailer announced in early September. The career center at 1989 S. Military Highway in Chesapeake will serve as a hiring and orientation hub for Amazon facilities in Chesapeake, Suffolk, Norfolk, Hampton and Virginia Beach. One delivery station opened in mid-June in Norfolk. Another opened in mid-August in Hampton. (VirginiaBusiness.com)
Dominion Energy Inc. and the Port of Virginia reached an agreement in late August allowing Dominion to lease 72 acres of the 287-acre Portsmouth Marine Terminal as a staging and pre-assembly area for the foundations and 800-foot wind turbines that will be installed for Dominion’s $7.8 billion planned offshore wind farm. Portsmouth Marine Terminal is one of the Port of Virginia’s two multiuse terminals in the Norfolk Harbor. The lease term is 10 years, valued at nearly $4.4 million annually, and has an option for two five-year renewals. (VirginiaBusiness.com)
Five Hampton Roads shipyards — Fincantieri Marine Systems North America of Chesapeake; Colonna’s Shipyard Inc. in Norfolk; East Coast Repair & Fabrication in Portsmouth; Epsilon Systems Solutions Inc., in Portsmouth; and Tecnico Corp. in Chesapeake — are on the short list for what could be billions of dollars in maintenance and repair work on the Navy’s eight littoral combat ships based out of Mayport, Florida. The award of contracts for a combined total of up to $2.255 billion means the yards, along with four others from out of state, will be able to bid for whatever dry-docking, emergency maintenance, preventive or planned maintenance, corrosion control or assessments the ships need over the next years. (Daily Press)
The presidents of Old Dominion University, Norfolk State University and Eastern Virginia Medical School signed a memorandum of understanding in August to establish Virginia’s first school of public health. The MOU solidifies the plan announced in January to develop a regional school of public health and address health inequities. The next step: applying for accreditation from the Council on Education for Public Health. Under the MOU, ODU will serve as the lead institution and house the school. An institutional operations committee and a curriculum committee will have representatives from each institution. (VirginiaBusiness.com)
PEOPLE
Francisco “Frank” Castellanos has been named the Hampton Roads region president for Bank of America. Castellanos will take over for Charlie Henderson, who is retiring from Bank of America in early 2022 after 42 years. Castellanos comes to Bank of America from Merill Lynch Wealth Management, where he was the market executive for greater Virginia and a market integration executive. (VirginiaBusiness.com)
Jean Yokum, the longtime president and CEO of Langley Federal Credit Union, died in August at age 90. Yokum served as the credit union’s president and CEO for 33 years, first joining as a teller in 1953 and working her way up. She served in the top spot from 1979 until her 2012 retirement. Under Yokum’s leadership, Langley’s assets grew to $1.6 billion. (VirginiaBusiness.com)
ROANOKE/NEW RIVER VALLEY
Cardinal Press, a new nonprofit digital news service covering Southwest and Southern Virginia, was expected to begin publishing stories in late September, with Dwayne Yancey, former editorial page editor for The Roanoke Times, as its founding editor. Nonprofit organization Cardinal Productions, incorporated in June, created Cardinal Press, which will publish original stories five days a week at cardinal.press. Cardinal was established by journalist Luanne Rife, president of Cardinal Productions; former Roanoke Times Publisher Debbie Meade; and Chris Turnbull, senior director for corporate communications for Carilion Clinic. (VirginiaBusiness.com)
Carilion Clinic plans to begin treating patients this fall at its new hub for children’s services at Tanglewood Mall. Carilion Children’s Tanglewood Center, which occupies 150,000 square feet in a former J.C. Penney, is expected to be fully operational by Oct. 4. The new Tanglewood facility creates a centralized space for Carilion Children’s that allows for more collaboration, establishes a sense of identity and offers high visibility, given its location just off U.S. 220. More than a dozen pediatric specialties will
be housed at the new center. (The Roanoke Times)
Manifold Mining, a small company that sells cryptocurrency mining machines, plans to invest in a Craig County facility. The Craig County Economic Development Authority announced in August that Manifold would invest approximately $420,000 to establish a center of operations in New Castle at the Crown Building, formerly home to a furniture manufacturing plant. Manifold Mining is expected to create at least 15 jobs within five years. The company was founded in 2019 with a focus on software development but shifted into the mining equipment sales business during the last year. (The Roanoke Times)
In late August, the Roanoke Regional Partnership released its five-year strategic plan, Thrive 2027. The plan outlines strategies to support the region’s economic growth. Four priority areas were identified: economic growth and innovation; talent attraction and workforce development; commercial real estate and infrastructure; and place making and livability. While some of the tactics outlined in the plan, such as marketing efforts aimed at attracting young, skilled talent or promoting the outdoor recreation available, are familiar, others stem from new objectives or areas of attention. (The Roanoke Times)
In August, Virginia Tech announced it was naming its real estate program for the Blackwood family. Willis Blackwood, founder and president of Richmond-based Blackwood Development Co.Inc., his wife, Mary Nolen Blackwood, and their children, Morgan Blackwood Patel and Nolen Blackwood — all Tech alums — have committed $10 million in donations to the program since 2018. (VirginiaBusiness.com)
PEOPLE
Doerzaph
Zachary Doerzaph was named executive director of the Virginia Tech Transportation Institute, the university’s largest research institute. The institute conducts more than 300 research projects in partnership with more than 100 public and private organizations. VTTI accounts for 12% to 15% of sponsored research at Virginia Tech and exceeded $50 million in externally sponsored awards for 2020. Doerzaph will also take on the role of president of VTT LLC, a nonprofit corporation of the Virginia Tech Foundation that operates the Global Center for Automotive Performance Simulation in Halifax County. (VirginiaBusiness.com)
Robert T. Sumichrast, the Richard E. Sorensen chair and dean of Virginia Tech’sPamplin College of Business since 2013, announced in August that he will retire at the end of this academic year. Virginia Tech is conducting an international search for his successor. Sumichrast, who joined the university in 1984, launched the nation’s first executive Ph.D. program and created the school’s online MBA program. (VirginiaBusiness.com)
SHENANDOAH VALLEY
The Augusta County Board of Supervisors approved a 15-cent-per-pack cigarette tax on Sept. 8. The original motion of a 40-cent pack failed, and the board instead passed the reduced tax, noting that the amount could be changed in the future. Augusta County will join the Blue Ridge Cigarette Tax Board, a regional authority that combines the taxing efforts of different localities, to execute the tax. Augusta County had previously instated a meals and lodging tax, which the county increased from 4% to 6% on July 1. (News Leader)
Augusta Health is requiring its employees to be vaccinated against COVID-19 by Nov. 1. Announced Aug. 20, the policy applies to providers and credentialed medical staff, as well as volunteers, students, contract staff, consultants and vendors. A panel will review religious and medical exemptions. About 80% of the system’s staff was already vaccinated at the time of the announcement. (News Leader)
Washington, D.C.-based fast-casual Mediterranean restaurant chain CAVA will spend more than $30 million to establish a new processing and packaging facility in Augusta County, Gov. Ralph Northam announced Sept. 9. The project is expected to create 52 jobs. CAVA will build the 57,000-square-foot facility in Mill Place Commerce Park in Verona. Cava Group Inc., which owns CAVA and Zoës Kitchen, has more than 900 employees in Virginia. (VirginiaBusiness.com)
Going against the city planning commission’s recommendation, Harrisonburg City Council voted Sept. 14 to approve developer Skylar & Talli LLC’s request to change the first floor of the Apartments at Peach Grove, a planned six-story, 400-bed apartment block near James Madison University’s Sentara Park, from commercial use to residential space, which will add roughly 60 beds to the development off Port Republic Road. In May 2019, the council had approved the rezoning and three special-use permits for the development, but in August, the developer’s representative told the planning commission that buyers had backed out and that the development lacked interested businesses because of pandemic-related commercial vacancies. (Daily News-Record)
The Rockingham County Planning Commission voted on Sept. 7 to recommend denial of a request to rezone agricultural land for the proposed 155-home Peak Mountain development in McGaheysville. The Rockingham County Board of Supervisors will decide the project’s fate in October. The subdivision would sit on nearly 42 acres located off Power Dam Road, about 300 feet from McGaheysville Road.
(Daily News-Record)
Shenandoah Telecommunications Co. (Shentel) announced in late August that it’s expanding its Glo Fiber high-speed, fiber-optic broadband network into Frederick County. Shentel launched Glo Fiber in 2019. Winchester, Harrisonburg, Staunton, Front Royal, Salem, Roanoke and Lynchburg currently have Glo Fiber. The Frederick County network is under construction, and the first phase has an expected completion date in 2022. The announced expansion will provide service to about 14,000 more homes and businesses in the areas surrounding Winchester and the town of Stephens City. (The Northern Virginia Daily)
PEOPLE
Doug Parsons, executive director of the Front Royal-Warren County Economic Development Authority, will become Fauquier County’s economic development director on Oct. 4. Parsons, who formerly worked for the Virginia Economic Development Partnership, joined the Front Royal-Warren EDA in May 2019, following the resignation of his predecessor, Jennifer McDonald, in late 2018 amid an embezzlement scandal. On Aug. 31, a grand jury indicted McDonald on 34 federal counts. Her trial is scheduled for Nov. 3. (The Northern Virginia Daily, The Winchester Star)
Amazon.com Inc.’s 72,000-square-foot delivery station in Bristol opened for its first official day of operation on Sept. 8. The delivery station is expected to create from 100 to 150 full- and part-time associate jobs “in addition to hundreds of driver opportunities,” with wages of at least $15 per hour, according to the global e-tailer. Delivery stations are the last step in Amazon’s ordering process. Nearby Amazon fulfillment and sortation centers send packages to the stations, where parcels are loaded into vehicles to be delivered to customers. (VirginiaBusiness.com)
Italian manufacturer Ceccato S.p.A. will open a $1.75 million U.S. headquarters in Russell County, creating 50 jobs over the next three to five years, the Virginia Coalfield Economic Development Authority announced Sept. 8. Ceccato manufactures systems to wash vehicles, from cars to trains. The Lebanon facility will be used to assemble and sell car wash units, manufacture truck wash units, and source items needed to manufacture the units for American companies. Ceccato is projected to make its initial capital investment by early 2022, and parts for the facility are expected to arrive by late October or early November. (VirginiaBusiness.com)
Atlanta-based internet service provider EarthLink is spending $5.4 million to build a customer support center in Norton, a project expected to create 285 jobs, InvestSWVA and Gov. Ralph Northam announced Sept. 14. As part of moving its customer service operations from overseas, EarthLink will build a 30,000-square-foot facility on a site in the 200-acre Project Intersection development, owned by Lonesome Pine Regional Industrial Facilities Authority. (VirginiaBusiness.com)
Eupepsia, a 250-acre Ayurveda wellness retreat in Bland County, was named the top wellness hotel in the nation in September by USA Today readers, who chose the resort from 20 nominees selected by editors of USA Today’s 10Best rankings section. Eupepsia offers vegetarian cuisine; health and fitness-focused programs; a spa with flotation therapy; a salt chalet; and hydrotherapy services. The facility opened in 2018 and has 26 guest rooms. (VirginiaBusiness.com)
Woodgrain Inc. will invest $9 million to expand its operations in Smyth County and will invest $8 million more to purchase and expand the former Independence Lumber sawmill in Grayson County, producing 100 jobs, Gov. Ralph Northam announced Aug. 20. The two projects will retain 80 local jobs. An Idaho-based family-owned business, Woodgrain is one of the largest millwork companies in the world, with more than 3,500 workers. It manufactures wood molding and trim. Independence Lumber is Grayson County’s largest private employer, and when the sawmill upgrades are complete, it will become the primary supplier for Woodgrain’s Smyth County operation. It will also allow Woodgrain to source 90% of its new forest product needs from Virginia. (VirginiaBusiness.com)
Tina McDaniel
PEOPLE
Tina McDaniel was hired as the first diversity, equity and inclusion coordinator for Bristol’s Promise, the nonprofit organization announced on Sept. 7. Bristol’s Promise works to help children and families in the Twin City be healthy, feel safe, develop marketable skills, have relationships with caring adults and give back to the community. McDaniel earned a master’s degree in organization leadership and a certificate of diversity and inclusion from Cornell University. She is a board member for the Diversity, Equity and Inclusion Alliance of Northeast Tennessee and Southwest Virginia. (Bristol Herald Courier)
CENTRAL VIRGINIA
Richmond-based Dominion Energy Inc. overcharged its Virginia customers $1.2 billion since 2015, according to testimony filed in early September by a utility expert in an ongoing review of the energy monopoly’s finances. Testimony from Heather Bailey, an Austin, Texas-based consultant and former utility executive and regulator, was filed at the State Corporation Commission by the environmental group Appalachian Voices. The commission can’t order any refund of excess profits Dominion earned in 2015 or 2016 because of a Dominion-backed 2018 law called the Grid Transformation and Security Act, said Will Cleveland, senior attorney with the Southern Environmental Law Center, which represents Appalachian Voices. (Richmond Times-Dispatch)
On Sept. 13, Henrico County-based Fortune 500 insurer Genworth Financial Inc. launched an initial public offering for its private mortgage insurance subsidiary, Raleigh, North Carolina-based Enact Holdings Inc. Enact is expected to trade on the Nasdaq Global Select Market under the ticker symbol “ACT.” (VirginiaBusiness.com)
In Richmond, workers removed Virginia’s biggest statue of Confederate Gen. Robert E. Lee from its towering stone base and cut it into two pieces in September, ending the monument’s 131-year reign embodying this city’s mythology as the former capital of the Confederacy. Lee’s surrender came so fast — after less than an hour of work — that hundreds of onlookers were caught by surprise. Gov. Ralph Northam and other state officials stood looking on. Northam announced on June 4, 2020, that he was ordering Lee removed from the state-owned property. A handful of local residents challenged the action in court and a judge temporarily blocked it. Though the residents lost their case, they appealed to the Supreme Court of Virginia, which unanimously ruled in Northam’s favor. The state plans to keep the statue in an undisclosed storage location until deciding what to do with it. (The Washington Post)
Prince George County-based aluminum extrusions manufacturer Service Center Metals will spend $101.7 million to build two more facilities in the county, projects expected to create 94 jobs,
Gov. Ralph Northam announced Sept. 14. Service Center Metals will build an aluminum extrusion plant and a compact remelt plant in Crosspoint Centre. Founded in 2002, Service Center Metals began operating in Prince George County in 2003. It has two plants on its 30-acre campus in SouthPoint Business Park. (VirginiaBusiness.com)
After close to 39 years, the Richmond-based alternative weekly newspaper Style Weekly shut down Sept. 8, three years after Norfolk-based Landmark Communications Inc. sold its Virginia newspapers — The Virginian-Pilot, Inside Business and Style Weekly — and their associated businesses for $34 million to Tribune Publishing Co. This May, Tribune Publishing was purchased by hedge fund Alden Global Capital in a $633 million deal that has led to the elimination of more than 250 full-time editorial positions through buyouts offered after the finalization of the deal, including at the Pilot and the Daily Press.(VirginiaBusiness.com)
PEOPLE
Michael Roussos will be the next president of Richmond’s VCU Medical Center, starting in December, VCU Health System announced on Sept. 8. Roussos was previously the lead administrator for University Hospital in San Antonio, where he led the hospital’s COVID-19 response. Roussos also aided in the hospital’s transition to Epic, an electronic medical records system that VCU Health System plans to implement later this year. Before joining University Hospital, Roussos worked at HCA Healthcare for 13 years, most recently serving as CEO of Mainland Medical Center in Texas. (VirginiaBusiness.com)
SOUTHERN VIRGINIA
The Sept. 9-12 Blue Ridge Rock Festival brought nearly 35,000 people to Pittsylvania County, making it the largest event in Pittsylvania’s history. Festivalgoers booked up hotel rooms throughout the region. The sold-out festival, with 180 bands slated to perform, brought traffic chaos and concerns about a surge in COVID cases. Nearly 4,000 fans aired their frustrations about the festival in a Facebook group. Thousands of attendees vowed not to return after issues with camping and parking. Festival organizers promised to improve the experience. (Danville Register & Bee, WSLS)
In early September, Bassett-based Carter Bank & Trust and West Virginia Gov. Jim Justice, a former billionaire coal magnate, settled their dispute out of court and will have their dueling suits dismissed. CB&T in May had filed suit in Martinsville Circuit Court regarding $58 million in loans that the bank maintained were personally guaranteed by Justice and his wife, Cathy. Justice responded with a lawsuit against the bank, seeking $421 million related to outstanding loans. The suit included court documents that described a longtime “gentleman’s agreement” between Justice and Worth Carter, the founder of CB&T. (Danville Register & Bee)
The Southside Planning District Commission has chosen EMPOWER Broadband Inc. to build a fiber optic network providing high-speed internet to homes and businesses in Halifax, Mecklenburg and Brunswick counties. The SSPDC issued a request-for-proposal for a regional fiber network that it estimates will cost some $150 million to build out in the three counties, which together comprise the SSPDC’s service area. EMPOWER is a subsidiary of Mecklenburg Electric Cooperative. To fund construction of the three-county network, the SSPDC will seek grant money from the Virginia Telecommunication Initiative (VATI), which has received an influx of cash through federal pandemic relief funding. (SoVaNow)
Kegerreis Digital Marketing will move its headquarters from Pennsylvania to downtown Danville, investing $1.7 million in the relocation and creating 62 jobs, Gov. Ralph Northam announced in September. The company, which will renovate a 7,000-square-foot former tobacco warehouse at 402 Cabell St., provides integrated marketing services, such as brand development, billboards, online efforts and analytics. It is a subsidiary of Chambersburg, Pennsylvania-based Kegerreis Outdoor Advertising, the 10th-largest billboard company in the country, with 2,500 billboards in seven states along the East Coast. Virginia competed with Pennsylvania and North Carolina for the project. (VirginiaBusiness.com)
Tyson Foods Inc. will open a 325,000-square-foot, $300 million manufacturing facility in the Cane Creek Centre industrial park, creating 376 jobs, Gov. Ralph Northam announced in late August. The new facility will primarily be used for the production of cooked foods such as Any’Tizer Snacks and chicken nuggets made by Tyson Foods. The poultry company will purchase 60 million pounds of Virginia-grown chicken for the facility over the next three years. Virginia competed with North Carolina for the project. Cane Creek Centre is jointly owned by the city of Danville and Pittsylvania County. (VirginiaBusiness.com)
PEOPLE
Alexis Ehrhardt, president and CEO of the Danville Pittsylvania County Chamber of Commerce, left in September for a job at the University ofVirginia as the executive director for state government relations and special assistant to the president. Ehrhardt had been at the helm of the chamber since 2018 after leaving her previous position as executive director of the Center of Community Engagement and Career Competitiveness at Averett University. The chamber’s board immediately launched a search for Ehrhardt’s successor. (VirginiaBusiness.com)
NORTHERN VIRGINIA
Amazon.com Inc. has hired more than 3,000 employees for its multibillion-dollar HQ2 East Coast headquarters in Arlington, the e-tailer announced in September. In 2019, the Virginia General Assembly passed an incentive package that would pay Amazon up to $550 million in grants for hitting annual goals toward hiring 25,000 workers at specified average annual wages by 2030. The state will pay Amazon an additional $200 million if the company hires 12,850 more workers between 2030 and 2034. (VirginiaBusiness.com)
First lady Jill Biden resumed teaching in person in September at Northern Virginia Community College, where she has worked since 2009. She is the first first lady to leave the White House to log hours at a full-time job. After Joe Biden became vice president in 2009, she joined the faculty at NOVA and continued to teach English there after he left office and throughout his 2020 campaign, including teaching virtually after the pandemic hit. (Associated Press)
The Federal Trade Commission fined McLean-based Capital One Financial Corp. CEO Richard Fairbank a $637,950 civil penalty in September for violating antitrust laws in finalizing stock acquisitions. The settlement must be approved by the U.S. District Court for the District of Columbia. The FTC alleged that Fairbank violated federal law by purchasing Capital One stock. In 2018, Fairbank’s compensation package included more than 100,000 Capital One shares, which increased his holdings to $168 million. The complaint alleged that Fairbank failed to report the award to federal antitrust authorities and illegally finalized it before agencies could investigate. (VirginiaBusiness.com)
Arlington-based Politico, the national political news site, is expected to have a new owner by the end of the year. The German publishing giant Axel Springer agreed to buy Politico in a deal announced in late August. Springer will take control of Politico and its sister site, Politico Europe, as well as Politico’s tech news site, Protocol, a relatively new venture, the companies said. They did not publicly disclose financial terms, but the deal is valued at more than $1 billion, two people with knowledge of the matter said. The New York Times reported earlier that Politico’s owner, Robert Allbritton, was seeking $1 billion for the deal.
(The New York Times)
Chicago-based consumer credit reporting agency TransUnion has signed a definitive agreement to acquire Reston-based identity management tech company Neustar Inc.’s marketing, fraud and communications businesses for $3.1 billion in cash. The transaction is expected to close in the fourth quarter. The acquisition will help TransUnion diversify from credit solutions by adding complementary digital marketing and fraud mitigation capabilities. (VirginiaBusiness.com)
New Washington Football Team co-CEO Tanya Snyder, the wife of CEO Dan Snyder, gave her first interview since being named to the position, released in September on a podcast with ESPN’s Adam Schefter. The Snyder family owns 100% of the team after a buyout and retained control after a year-long investigation into allegations of sexual harassment at the team facility in Ashburn. Tanya Snyder, who stepped in as the team’s corporate leader in July after her husband temporarily removed himself from day-to-day operations, said on the podcast that the team’s C-suite has narrowed down the team’s new name to three options. (Richmond Times-Dispatch; NBC Sports)
Sandra Hood finally went on a much-needed vacation in mid-August.
Even so, Hood, the managing broker of Coldwell Banker Traditions in Newport News and president of the Virginia Peninsula Association of Realtors, took advantage of a rainy morning at the beach to open her laptop and get some work done.
“It’s the most difficult market that I have ever been in,” says Hood, who has been in the residential real estate industry for 15 years.
More than 18 months after the COVID-19 pandemic disrupted most industries, real estate agents across Hampton Roads say they are experiencing their busiest year ever, with some running a marathon at nearly a sprinter’s pace to keep up. Despite small signs that segments of the market are cooling, they say they expect the current seller’s market to continue through 2022.
Inventory across Hampton Roads remains tight, forcing an increase in median home sale prices across Hampton Roads to $300,000 — up from $290,000 just two months earlier — proof that demand is still outstripping supply, according to a market summary from Real Estate Information Network Inc. (REIN), the multiple listing service that covers Williamsburg east through Virginia Beach and south across the North Carolina border.
While active listings have increased month-over-month into this summer — 4,220 in June and 4,621 in July — they remain lower than last year, when there were 5,846 and 5,576 homes listed in June and July 2020, respectively. Residential homes spent an average 51 days on the market in June 2020. That dropped to 23 days in June and July 2021, according to REIN.
“This summer, the market has slowed a little bit, and I think most of us are OK with that, because we need the breathing room,” says Jeremy Caleb Johnson, an agent with Long & Foster/Christie’s International Real Estate in Virginia Beach.
Johnson, who serves as vice chair of finance for the Hampton Roads Realtors Association, attributed the cooling to families taking vacations and children heading back to school.
“If I had a really awesome listing, and I put it on the market in March this year, I would [have expected] it to be gone in about 24 to 48 hours,” Johnson notes. “In some instances, we’re seeing putting that same type of awesome, amazing listing on the market today and it’s maybe lasting a week to 10 days.”
Low inventory and high demand may also be fueling buyer fatigue. “I think a lot of buyers have written a lot of offers and didn’t get them, and now they’re like, ‘Maybe now is not the time for us. Let’s sit back and watch the market, see if it goes down at all,’” says Alan Thompson, a co-owner of Chesapeake-based Lucky Homes.
Real estate was deemed an essential industry in Virginia during the pandemic shutdown, which allowed business to keep going. Hood credits the region’s strong job market and military presence for keeping the local residential real estate market so busy. The combination of new people coming to the area and local sellers planning to remain in the area creates another problem.
“You have to be really skilled in making your offers and people could have six, 10 rejections before they finally find a home, and many people are giving up, staying where they are,” Hood says. “People that are moving to the area, they can’t give up. So, it’s a challenge.”
The residential market in Hampton Roads reflects what’s happening in metropolitan regions across the country as COVID-19 reshaped conditions. Sellers are getting offers over list price without having to concede to repairs or inspections, and some buyers are moving farther from offices now that they can work remotely.
Some homeowners took advantage of low interest rates and refinanced, Thompson says, while others who received low bids in previous years are finding luck.
“We’ve reached out to every one of those sellers and said, ‘Hey, if you ever want to sell, now’s the time,’ and they’re selling and selling well,” says Thompson, who also chairs the Hampton Roads Realtors Association’s Resale Council.
As for buyers, some are even purchasing homes sight unseen.
Thompson’s firm worked remotely with a military family last year who could not travel to tour homes because of the pandemic.
“We sold it to them solely by video, which is [nerve-racking] because, basically, we’re picking their house out for them,” he says. “We’ve never met these people at all, so that’s kind of scary.”
Cash also remains king. An Oceanfront home in Virginia Beach built in 2017 went on the market this summer for $5.4 million and sold for $5.8 million to an all-cash buyer, Johnson says. “In every city of Hampton Roads, we are seeing an inordinate number of cash buyers, and that is providing challenges for the stereotypical buyer that has their mortgage.”
While all the above factors are creating a challenging time for Realtors and customers, Thompson says there’s also been an influx of new real estate agents entering the field, lured perhaps by job cuts in other industries and the possibility of quick sales. But in today’s market, he adds, having an experienced agent and lender can make a difference in negotiating and getting to closing. “I think the good agents are doing better because they excel in difficult markets,” he says.
The frenzy and uncertainty of the market has taken a toll on buyers and sellers, and those working in the industry have absorbed some of that impact. Realtors say they’ve relied on supportive colleagues to pitch in when necessary and encourage others to do the same.
“We are constantly being affected by seasonal changes in real estate,” Hood says. “I think that coming into the fall, it’ll probably be a little bit of a slowdown. But I think that the overall state of the real estate economy is going to stay about the same.”
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Sign In
Free Newsletter
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.
