YesVirginia Business Blog

This week has been a productive one for economic development in Virginia.

On Wednesday, Governor McDonnell traveled to Lynchburg to personally congratulate The Babcock & Wilcox Company and cut the ribbon on its new engineering facility. The 50,000-square-foot building will house an engineering and design team of up to 200 that is working on the new B&W mPower™ nuclear reactor.

It will be a zero-emission operation, contributing to the reduction of an estimated 57 million metric tons of CO2 during the lifetime of each reactor. In addition, the reactor’s air-cooled condenser, underground containment and small site footprint will help minimize environmental impact.

B&W’s continued innovation in the area of clean energy technologies and its efforts to reduce power plant emissions remain unprecedented in the industry.  The company’s success has helped to put Virginia on the map as a center for nuclear technology.

On Thursday, Lt. Governor Bill Bolling, wearing his Chief Jobs Officer hat, joined business and government officials in King William County to break ground on a 12-mile natural gas pipeline project along U.S. Route 360.

The pipeline will start at the end of the existing trunk line in Hanover County at the intersection of U.S. Route 360 and Walnut Grove Road. It will turn off of Rt. 360 at Mount Pleasant Road and end at the Nestlé Purina facility in Fontainebleu Industrial Park. Construction will begin in May and be completed by the end of the year.

The new infrastructure will allow Virginia Natural Gas to serve the County for the first time and expand Nestlé Purina’s ability to reduce emissions and improve the plant’s operating efficiency.

While neither announcement touted a new company’s entrance into Virginia, both events represent activity that is vital to the Commonwealth’s economic development success. The importance of expansions of existing Virginia companies cannot be underestimated. Their growth and success sends a powerful message to other corporate decision-makers that Virginia is a great place to do business. Last year, about 12,000 of the total 17,000 jobs announced in Virginia were created by existing Virginia companies. About 83 percent of the investment in Virginia in 2009 came from expansion projects.

And whether the project is an expansion or a new company locating in the Commonwealth, appropriate infrastructure is a must. Many industrial projects require natural gas to even consider a location during the site selection process. In the past, King William County was not considered for these projects because this kind of infrastructure was not in place. The new gas pipeline will open doors for the County to compete for a variety of projects for the first time.

Governor Bob McDonnell recently referenced the grand opening of MeadWestvaco’s downtown Richmond headquarters as a source of encouragement.

A state-of-the-art executive office that is open for business and the hustle and bustle of 650 employees is certainly a refreshing change from the doom and gloom of business closures and job losses we’ve been inundated with recently.

MWV’s grand opening comes just days after Charlotte County celebrated the expansion of local, family-owned Morgan Lumber Company, which invested $4.2 million and created 25 new jobs at its Red Oak facility.

And Frederick County is breathing a sigh of relief that Kraft has chosen its local facility to invest $40 million to increase production of its Capri Sun product, creating 100 new jobs.

The corporate world is awakening. Inquiries from consultants working on behalf of companies, and from company decision-makers, are on the rise in Virginia, especially in the manufacturing, data center and energy sectors. The quality of the prospects VEDP is hearing from has also improved.

While we still have a ways to go, economic indicators in Virginia are pointing in the right direction—and that’s encouraging news.

According to The Boyd Co., a New Jersey-based corporate relocation firm, two Virginia cities are among the top 10 least expensive North American locations to operate a corporate headquarters.

The Boyd Co. released a study this month that estimated the annual bill in Virginia Beach for a 70,000-square-foot, 325-employee corporate headquarters complex at $21.8 million, and in Richmond at $22.4 million. The study reported that Richmond and Virginia Beach offer some of the lowest local sales and property taxes in the nation. Boyd also highlighted Richmond’s low airfare costs as a cost-saving benefit.

New York ranked the highest at $39.7 million. Other comparable cities included Charlotte ($22.8 million), Washington, D.C. ($26.6 million), and Baltimore, Md. ($24.7 million).

Virginia is home to more than 30 Fortune 1000 corporate headquarters and eight of Forbes America’s largest private companies. In addition to low tax and airfare costs, corporate headquarters in Virginia enjoy a business-friendly climate characterized by stable and competitive payroll costs and lease rates, as well as legislation that protects “at will” employment practices.

The Richmond area is home to the headquarters of 10 Fortune 1000 firms, including MWV (MeadWestvaco) and Altria Group. STIHL Inc., Amerigroup and Lifenet are among companies that have located their headquarters operations in Virginia Beach.

For more information about the benefits of locating headquarters operations in Virginia, call us at (804) 545-5700 or visit www.YesVirginia.org.

If you haven’t seen it yet, take a few minutes to read Virginia Business’ Dec. 29 Web posting headlined: POLITICAL ROUNDTABLE: Transportation still a chief concern. The publication invited five prominent Virginia observers of state politics to comment on the recent Governor’s election and the upcoming legislative session. A summary of their comments is provided in this posting.

Some of the roundtable discussion concentrated on economic development, which makes sense given the current state of the economy and Governor-elect McDonnell’s campaign focus on the creation of jobs. More importantly, the state of VEDP’s marketing budget was discussed, which until now has gotten lost in the weeds of state incentives and other economic development details.

Don’t misunderstand—state incentives are an important tool for the Commonwealth to utilize in winning economic development deals—and jobs—for Virginia. But if we can’t market Virginia to corporate decision-makers and bring attention to the fact that Virginia is the “Best State for Business,” state incentives will never see the light of day. Simply put, resources for media advertising and outreach for prospect events and meetings need to be deployed to adequately tell Virginia’s compelling story.

Hugh Keogh gets it. The President and CEO of the Virginia Chamber of Commerce—and VEDP board member—conveyed the message during the Virginia Business roundtable.

Another topic of discussion was Virginia’s ability to maintain the Forbes.com “Best State for Business” ranking, a title the Commonwealth has held for the last four years. To echo what roundtable participants Whitt Clement (former state transportation secretary and partner in state government relations, Hunton & Williams) and Ben Dendy (former senior staff member to two Virginia governors and president of Richmond-based lobbying firm Vectre Corp) so eloquently stated, it ain’t likely under current conditions. While we’ve got a strategic location, global access and world-class higher education on our side, these factors are a result of lawmakers’ willingness to make big-picture investments in Virginia.

To maintain our leadership position and get even better by attracting more quality jobs that Virginia needs and deserves, the big-picture investments need to continue. With a strong focus on transportation, education and economic development, Virginia might just turn its economy around and snag that “Best State for Business” title once again.