Expanding and versatile.
That describes the economic outlook in Virginia. With 9,604 new manufacturing jobs created in the state in 1997 and a strong first half of 1998, Virginia is a state of growth.
For the first half of 1998, a total of 28,298 new jobs were created, with capital investment of $1.15 billion. For all of 1997, 20,883 new jobs were created with an investment of $2.6 billion.
The most prominent industries for capital investment in 1997 were electronics, metal and paper. The industries announcing the most new jobs were furniture, transportation and equipment, rubber and plastics.
Growth linked to incentives
| VIRGINIA EMPLOYMENT BY SECTOR |
| INDUSTRY |
VIRGINIA |
U.S. |
| Manufacturing |
12.2 |
15.1 |
| Construction |
5.7 |
4.6 |
Services |
29.9 |
29.3 |
| Wholesale and Retail |
22.9 |
23.6 | |
Virginia's incentives are partly to blame for its economic success. Fifty Enterprise Zones have been established in the state, providing special benefits to businesses locating within their boundaries. These include a general 10-year state tax credit of 80 percent the first year, and 60 percent in years two through 10.
To qualify, businesses must increase full-time employment by at least 10 percent, with 40 percent of the new jobs meeting the low-income standards for the area. Job training funds are also available.
The state also offers a variety of financial incentives in addition to enterprise zones.
The Governor's Opportunity Fund backs industrial developments that bring new jobs and meet specific criteria. Funds can be used for site acquisition, transportation access, training and construction.
Other programs include Industrial Development Bonds, the Economic Development Revolving Loan Fund, the Defense Conversion Revolving Loan Fund, Loan Guaranty, Virginia Capital Access and Export Financing Assistance.
University link
| "Eighty percent of our distribution is in three spots, which are all within a day's drive by truck from here. We also love the quality of education and the quality of life here."
-- John Pecaric, vice president & division director, R.R. Donnelley and Sons |
In western Virginia, a small but growing company is capitalizing on the state's burgeoning link between education and technology.
CropTech, located just off the campus of Virginia Tech University in Blacksburg, develops manufacturing techniques for producing pharmaceutical products in plants.
Founded in 1992 by two Virginia Tech professors, the company has grown to 22 employees, is adding eight more this year, and will add 100 more jobs in the next three years.
CropTech leases a 3,600 square foot building, but a new, $1.1 million, 10,000 square foot facility is planned in the university's corporate research center.
CropTech develops genetically engineered plants, especially tobacco, for the production of proteins and biochemicals, which are used for clinical and pharmaceutical purposes. The new building will integrate labs and clean rooms used in creating transgenic plants.
"The proximity to the university is certainly a huge factor in our expansion here," said Brandon Price, CEO of CropTech.
Access to Virginia Tech also was a factor in R.R. Donnelley and Sons' new printing facility in Roanoke.
Donnelley, one of the largest printers of books in the world, built the 288,000 square foot plant to print and bind four-color books including cookbooks and how-to guides.
Its product list includes Time-Life books and National Geographic. The plant prints about 20 million books per year, and is expected to climb to 30 million in 1999 and 40 million in the year 2000.
John Pecaric, vice president and division director for Donnelley, said the plant's strategic location for distribution was a major factor in deciding to locate in the Roanoke Valley.
"Eighty percent of our distribution is in three spots, which are all within a day's drive by truck from here," Pecaric said. "We also love the quality of education and the quality of life here."
The $102 million plant employs 220, and could add more in the next two years.
Donnelley received incentives totaling $3.6 million from Roanoke County and the state of Virginia. Pecaric said the county and state also helped the company find a site.
"They made it attractive, and these days each community knows what it takes to attract a high-quality business," he said.
The Roanoke Valley Economic Development Partnership offers a variety of assistance to expanding or relocating businesses.
"We don't have official program names, but we will customize incentive packages depending on the needs of the company," said Beth Doughty, executive director of the partnership.
The organization also helped Advanced Auto in the expansion of its headquarters in Roanoke. Advanced Auto recently purchased Western Auto, and the merger is bringing 200 new jobs to Roanoke.
On the move
TOTAL VIRGINIA UNEMPLOYMENT RATE (1997)
- January 4.7
- February 4.5
- March 4.0
- April 3.8
- May 4.1
- June 4.7
- July 4.2
- August 3.9
- September 3.9
- October 3.4
- November 3.3
- December 3.1
SOURCE: VIRGINIA EMPLOYMENT COMMISSION |
Virginia's location offers major advantages for distribution facilities. With access to Chesapeake Bay, an extensive interstate highway system and several airports, Virginia businesses can move their products quickly.
Newport News Ship Building is one of Virginia's landmark businesses, and is located in Newport News, a port city on the eastern side of the state. The company, which builds aircraft carriers and submarines for the U.S. Navy, recently announced it will renovate two buildings downtown and build a third.
The new building, when completed in two years, will become home of the Virginia Advanced Shipbuilder and Carrier Integration Center.
The $50 million facility will employ 500 new engineers. The state extended $98 million in tax credits to the project.
The renovation of the existing buildings in downtown Newport News will consolidate the company's operations.
"It's a tremendous benefit for us to have our research and development people near the shipyard," said Mike Hatfield, vice president of corporate communications. "We are entering an era of new designs in both the submarines and aircraft carriers, and it's important for us to be all in one spot."
One of the existing buildings to be refurbished is an old Sears facility. When completed, it will have 128,000 square feet of space for about 950 engineers. The other building, formerly known as Virginia Specialty Stores, will have 97,000 square feet and employ 650 engineers and office staff.
High-tech haven
Newport News is part of an area called Hampton Roads, comprised of nine cities including Norfolk and Virginia Beach with 1.5 million people.
The Port of Hampton Roads handles more than nine million tons of cargo per year, making it the second-largest port on the East Coast.
Numerous prominent facilities are located in Hampton Roads, including the National Aeronautics and Space Administration Research Center, which employs 2,408 people with an estimated economic impact of $193.7 million.
Other businesses that deal with the center have relocated close to NASA, including Gateway 2000, with an expansion of 400 jobs, Bell-Atlantic, Anthem Alliance and Howmet Corp., which announced an expansion in 1998 to create 286 new jobs with an investment of $48 million.
"We have the second-largest per capita population of any area in the country," said Dan Girourard, of the city of Hampton's Department of Economic Development. "Gateway has its East Coast operations here. Cooper Automotive has a huge plant here. We have good, skilled workers."
International investment
High-tech firms aren't the only ones enjoying success in Virginia. Iceland Seafood, a Reykjavik, Iceland-based processor and packager of seafood, shifted its American operations from Pennsylvania to Newport News in late 1997.
The company moved into a 155,000 square foot building in the Oakland Industrial Park, creating 270 new jobs. Newport News was chosen over 38 sites in states across the East Coast.
Tom Sublett, vice president of operations and project manager for site selection for Iceland Seafood, said Virginia aggressively pursued the business.
"The job training program offers support, plus pre-training and ongoing support," he said.
Central and western Virginia are also feeling the boom. Goodyear Tire and Rubber added 450 jobs this year at its Danville plant with a capital investment of $12 million.
Chaparral Steel added 400 jobs in Petersburg with an investment of $400 million. The area where the plant is located has been designated an Enterprise Zone. Dinwiddie County, where Petersburg is located, received a $3 million grant for the project from the Governor's Opportunity Fund.
| "We have the second-largest per capita population of any area in the country."
-- Dan Girourard, city of Hampton's Department of Economic Development |
Utilities were important to the Chaparral project. Virginia Power helped make the deal a reality by negotiating a special electricity rate with the Virginia Utility Commission.
In 1997 alone, the utility was involved in 25 new projects that brought a total $1.5 billion in investment and created 6,400 new jobs.
"We cooperate with other businesses and economic developers in Virginia," said Tom Kazas, spokesman for Virginia Power. "We do a lot of the behind the scenes work, providing marketing tools, working on publicity, that sort of thing."
Although the state is buzzing with activity, officials aren't content and hope to create 250,000 jobs over the next four years.
VIRGINIA FACTS AND CONTACTS
DEMOGRAPHY AND ECONOMY
Population: 6.7 million
Capital: Richmond
Three Largest Cities: Virginia Beach, 417,061; Norfolk, 253,768; Richmond, 198,500
GSP: $177 billion
Per Capita Income: $25,212
Percentage of Durable Goods Manufacturing Labor Force Organized: 6.8%
Right to Work State: Yes
1997 Avg. Unemployment Rate: 4.0%
Average Hourly Manufacturing Wage: $12.96
Population Over 25 With Bachelor's Degree or More: 24.5%
EM's Education Quotient for the Largest School Districts: Virginia Beach, green; Norfolk, red; Newport News, red
Corporate Income Tax Rate: 6.0%
Percentage Employment by Sector: construction, 5.7%; manufacturing, 12.2%; mining, 0.33%; service industries, 29.9%; transportation/public utilities, 5.2%; wholesale/retail, 22.9%
Primary Industries: transportation equipment, electronic and electric equipment, industrial machinery, food processing, chemicals, lumber and wood products, textiles, furniture and apparel
Targeted Industries: aerospace; biotechnology; maritime industry; manufacturing technologies and practices; semiconductors; systems integration and technology advancement; tourism; international trade and development
BUSINESS ASSISTANCE
Major Financial Incentives: Industrial Development Bonds; Community Development Grants; Governor's Opportunity Fund; Solar Photovaltaic Manufacturing Grants; Virginia Coalfield Economic Development Authority; Virginia Capital; Virginia Small Business Authority
Worker Training Programs: Dislocated Worker Program; Adult and Youth Programs; consulting; video production
Technology Transfer Programs: Contact: Virginia Center for Innovative Technology (800) 383-2482
Enterprise Zones: 46
Foreign Trade Zones: 6; Suffolk, Dulles International Airport, Culpepper, Tri-City Regional Airport, Richmond International Airport
International Trade Offices and locations: Japan; Frankfurt, Germany. Contact: Virginia Economic Development Partnership, 901 E. Byrd Street, P.O. Box 798, Richmond, VA 23218-0798
Environmental Permit Assistance: Contact: Bob Burnley, Director of Technical Services, Virginia Economic Development Partnership, (804) 371-8104
FOR MORE INFORMATION CONTACT
Wayne Sterling, Chief Executive Officer,
Virginia Economic Development Partnership,
901 East Byrd, West Tower, 18th Floor,
Richmond, VA 23206, Phone (804) 371-8105 or fax (804) 371-8112 |
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