Category Archives: Economic development

Return to Bull Run: Pumping the Brakes on Data Center Construction

by James Wyatt Whitehead, V

Conflict rages yet again on the site of two major Civil War Battles, Manassas National Battlefield Park, in Prince William County, Virginia. This is nothing new to Northern Virginia residents who can recall the rally cry of “Save the Battlefield.” In 1988, developers fought and lost the battle to build a 1.2 million square-foot mall on property essential to the core of Manassas Battlefield. In 1993, the Walt Disney Company proposed building a 3,000-acre history theme park in nearby Haymarket, Virginia. Preservationists effectively stonewalled the idea and Disney retreated in fear of losing a coveted positive public image.

The Battle of Manassas rages yet again in 2023. This time the antagonist is the Prince William County Board of Supervisors. In November 2022, the board approved on a 5-2 vote a change in zoning rules that would permit the construction of data centers. The property in question is adjacent to the western border of the battlefield. The current plan for the Prince William Digital Gateway encompasses 2,139 acres of land.
Continue reading

Why Did Youngkin Spurn a $3.5 Billion Investment?

The Berry Hill mega-site in Pittsylvania County — still waiting for a mega-investment

by James A. Bacon

When you nix what might have been a $3.5 billion investment creating a reported 2,500 jobs in one of Virginia’s most depressed regions, you’d better have a good explanation. But when mammoth economic development deals are wrapped in secrecy backed by non-disclosure agreements, it’s difficult providing that explanation.

That’s the pickle Governor Glenn Youngkin finds himself in following his decision to halt discussions with Ford Motor Co. to build a battery plant in Pittsylvania County. The Governor scuttled Virginia’s bid for the project upon learning that Ford’s partner would be China-based Contemporary Amperex Technology Co., the world’s largest maker of electric vehicle batteries — and what the administration calls a “front for the Chinese Communist Party.”

Not surprisingly, Democrats are criticizing Youngkin, who is contemplating a national run for president, for putting national politics before economic development in Southside Virginia. Sen. Scott Surovell, D- Fairfax, told the Richmond Times-Dispatch: “To deny [people in the community] jobs because you’re in last place in Republican presidential primaries [is] gubernatorial malpractice.”

The Youngkin administration’s response was weaker than it could have been. Reports the RTD: Continue reading

Consumers Be Wary When Energy Elephants Dance

By Steve Haner

First published this morning  by the Thomas Jefferson Institute for Public Policy. 

The Virginia House of Delegates is expected to vote this week to exempt certain Virginia manufacturers, which ones to be determined later, from the coming wave of energy costs created by Virginia’s rapid transition to unreliable forms of power generation. Continue reading

Youngkin Wants to Jump-Start Economic Growth

Governor Glenn Youngkin delivering his State of the Commonwealth address. Photo credit: WTVF.org

by James A. Bacon

Governor Glenn Youngkin addressed many topics in his State of the Commonwealth address last week, ranging from the meltdown in K-12 education to the surge in suicides, drug overdoses, and homicides. But he spent the most time talking about Virginia’s declining economic competitiveness.

Once upon a time, making the Commonwealth economically competitive globally and within the U.S. was a primary preoccupation of Virginia governors and lawmakers, both Democratic and Republican. There was a bipartisan consensus that a rising tide lifts all boats, that the path to prosperity was attracting corporate capital, fostering technological and business innovation, creating jobs, and raising wages.

In the Age of Wokeness, you don’t hear the term “economic competitiveness” much anymore. For instance, at the University of Virginia the unremitting emphasis is on achieving “social justice” and, secondarily, combating climate change. The terms “wealth creation” and “economic prosperity” have dropped out of the vocabulary. UVa is hardly unique. The same priorities can be seen in the media, across higher ed, and, remarkably enough, in some of Virginia’s leading business lobbies.

Ironically, the more Virginia’s new ruling class has focused on social justice, the less of it we have gotten. In large measure that’s because Virginia is falling behind in economic competitiveness. The biggest losers in a stagnant economy are the working poor. Youngkin’s diagnosis of what ails Virginia is worth recounting. Continue reading

Virginia Democrats’ Rent Control Bills Would Make Housing Scarcer

by Hans Bader

In Virginia’s legislature, rent-control legislation has been introduced by five Democratic delegates and a Democratic state senator. Economists oppose rent control because it makes it more difficult for people to find decent housing in the long run. In a 1992 poll, 93% of those surveyed said rent control reduces the quantity and quality of housing available.

But Democrat-run Loudoun County is now asking the Virginia legislature for the power to impose rent control. DC News Now reported in December that “New policies could soon be introduced in Richmond at the request of Loudoun County. One would place a limit on rent increases.”

This is surprising, because even left-leaning economists mostly think rent control is stupid, as expressed by Swedish economics professor Assar Lindbeck. He said, “Rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”

In 1989, Vietnam’s socialist leaders reluctantly admitted that their policy of rent control had destroyed the housing stock of Vietnam’s capital city, which had been sturdy enough to survive years of American bombing during the Vietnam War. Vietnam’s foreign minister said, “The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.”

Yet State Senator Jennifer Boysko, who represents Virginia’s Loudoun County, has introduced SB 1278, a rent-control bill. It would allow cities and counties to adopt rent control ordinances, under which rent increases would be limited to inflation or less. Her legislation states that such ordinances “shall prohibit any increase in the rent by such landlord of more than” the “percentage increase in the Consumer Price Index,” and “may allow rent increases … by an amount not to exceed” that inflation rate. The same bill has been introduced in the Virginia House of Delegates by Democratic socialist Nadarius Clark and four other Democrats, as HB 1532. Continue reading

McKinsey & Company Has You Covered

Whatever this is supposed to mean. Courtesy, McKinsey & Company

by James C.  Sherlock

Ever feel not only disconnected from, but ignored by central planners?

Do you run a shoe store in Sterling or work for a hospital in Richmond? Use natural gas in your home or work?  Teach in a public school in Wise County? Drive a gas-or diesel-powered vehicle?

In other words, do you do what people do to make the economy run and feed their families? Live your life using carbon-based energy, as does the entire economy?

Central planners have chosen your future. Nothing big, just the entire United states economy.

They acknowledge “headwinds” in that future. Challenges they call “weather fronts.” What McKinsey, the guru of net zero, calls a “devilish duality” that it claims has put “executives” on the spot.

They offer strategies to deal with them:

As net zero has become an organizing principle for business, executives are on the spot to lay out credibly how they will deliver a transition to net zero while building and reinforcing resilience against the certain volatility of ongoing economic and political shocks.

Dominion Energy is all in.  But questions arise: Continue reading

RVA 5×5 — Who Really Voted Down The Casino Referendum?

by Jon Baliles

The casino referendum is the issue that won’t go away — kind of like a desperate or compulsive gambler who stays put because the next hand is the winning hand, or the slot player who is completely convinced the next pull of that handle will deliver the jackpot. At some point, you need to walk away.

The relentless effort to build a casino in Richmond and revive the referendum for the third time in 2023 (it failed in 2021 and tried but failed to return to the ballot in 2022) is about to become the hottest potato tossed around the General Assembly session when it opens next week. I won’t bore you to tears with recapping the details from the past few months — this is a look back at the vote in 2021 and what it means in 2023 — but you can read more about the non-stop casino drama here, here, and here, if you so desire.

The people voted the casino down in 2021 in a referendum that was required by the state, but Mayor Stoney and others looked at the results and concluded the easiest and most convenient explanation of the final tally could be explained by race. Except, what Stoney and others maybe didn’t realize is that the voting data show that the referendum failed because a huge number of Terry McAuliffe voters also voted against the casino.

The Stage

Before we get into the data, however, let’s set the stage. Richmond is lobbying the legislature hard as we speak and will stop at nothing to get the referendum back on the ballot in 2023. Petersburg wants to have a shot at a casino referendum next year and make Richmond wait a few years since they already tried and failed. If Richmond does get approval for another referendum, the casino applicant in Petersburg has said it will not move forward with its plan and there would be no need for a referendum in Petersburg. So, the stakes are clear and the battle has already been joined. Stay tuned.

The inability of Richmond’s leaders to get the casino application/selection process completed and on the ballot for the 2020 election (like the other four casinos in Virginia did) cost them dearly. In a presidential year, that referendum would have been approved easily given the high level of turnout (the other four cities approved their referendums in 2020 with at least 65%). We saw a tight gubernatorial race in 2021 (with a record voter turnout for a gubernatorial election, but still lower than a presidential year), and the casino referendum went down to a very narrow defeat. Continue reading

Projected $312 Billion Cost of Lost Earnings of Virginia K-12 Students due to Pandemic School Closures

Courtesy Eric Hanushek

by James C. Sherlock

Over $312 billion in present value.

That is the estimate published by Stanford’s Eric A. Hanushek of expected economic losses attributable to Virginia’s pandemic school closures.

Virginia students in the COVID cohort can expect on average 5.5 percent lower lifetime earnings.

History indicates that the economic losses will be permanent unless the schools get better. Just returning schools to their pre-pandemic performance levels will not erase the lost learning.

Recovering from the pandemic requires swift and decisive improvements to the schools.

That number is an estimate, but a scientific one. Dr. Hanushek has better credentials with which to make that estimate than perhaps any other economist in the world.

For perspective, the $312 billion present value of projected losses to the Virginia economy due to COVID school shutdowns represents about seven years of state revenue realized from Virginia sources in the 2021 and 2022 biennium.

Even the money pales by comparison to the developmental and emotional damage done to the children.

But feel better.

His estimate of similar losses to California exceeds $1.2 trillion. Continue reading

Cold Iron in Downtown Richmond

by Jon Baliles

The Free-Press Editorial page’s second at-bat this week also scored a hit with “No Hot Iron Here.” The piece calls out the Mayor for allowing the hot iron of development opportunity to cool to the disadvantage of the City. It mentions the selection of five teams that bid on the “City Center” development opportunity, which includes the demolition of the Coliseum, the refurbishing of the Blues Armory, as well as building a convention center hotel and ancillary development. That is all moving forward with a development process that it seems the Mayor and the City have finally realized is one worth repeating instead of plans like Navy Hill.

But the editorial focuses on the properties on the other side of Broad Street that hold (or held?) massive potential. They are the rarely mentioned properties and opportunities that would be big wins for downtown but have remained idle since the Mayor took office in 2017.

In the two years since the council killed the $1.5 billion Navy Hill deal, the Stoney administration has yet to issue requests for developers for city-owned surface parking lots at 6th and Grace streets and 4th and Broad streets. Both are south of Broad Street and already had active interest, and both have been ripe for activity while interest rates were still low, which is no longer the case. Continue reading

Afghan Immigrants and Their Children in Virginia – Part 2 – the Afghan Adjustment Act

Courtesy of Virginia Department of Social Services

by James C. Sherlock

When I wrote Part 1 of this series, I promised further investigation into immigration of Afghan allies into Virginia.

The Virginia Department of Social Services (VDSS), a hero in this story, has been entirely forthcoming in answering my inquiries. I will recount in a follow-up post their work so far. But the federal government has much more to do.

As a retired Naval officer, I strongly support the bi-partisan Afghan Adjustment Act (the Act) sitting in committees in the House and Senate. We must do the right thing for allies who fought alongside us.

Neither the House nor the Senate acted upon the bill in 2022.

The VDSS Office of New Americans, funded by the federal government, is doing terrific work, but needs the help that the Act would bring.

VDSS is assisting 5,161 Afghan parolees.

Parole offers only limited, temporary benefits and — unlike refugees and Special Immigrant Visa (SIV) holders — parolees have no clear path to permanent status. Instead, those thousands of parolees live in Virginia uncertain about their options or their future in the United States.

There are 2,123 additional Afghans in the Commonwealth that already have SIV designation.

Only California and Texas host more Afghans who have fled their country since the American withdrawal.

Both SIVs and parolees who qualify as SIVs but await very limited numbers of authorized visas are welcome with our thanks for their service. They can be expected to make major contributions to Virginia.

We owe them the chance to do that. That is why the Act is so necessary. Continue reading

Richmond’s Next Chapter

by Jon Baliles

The Times-Dispatch Editorial Board printed a piece this week entitled “The city’s Lost Cause statues are all gone. So what now?” While it recaps the events and protests of 2020 and the fact that all of the former Confederate statues have been removed, it offers a bit more foresight by looking at what will be required of our City and our leaders in the future.

The piece points out that the removal of the A.P. Hill statue was characterized by Mayor Stoney as an opportunity to “start writing a new chapter for the city” and to make the accident-prone intersection more safe. “That’s the blocking and tackling of running a government,” Stoney said. The editorial, however, goes a little deeper than the Mayor:

Charting a new chapter for Richmond, however, requires something more than “blocking and tackling.” In the summer of 2020, a broad coalition of Richmond citizens and public officials — including Stoney — embraced a newfound commitment to breaking down systemic racism and creating a more inclusive, equitable Richmond. In the winter of 2022, we still have little to show for it.

It runs down the list of things that you constantly hear Stoney talking about but providing very little in the way of policy solutions that are implemented and working.

City schools are struggling with a leadership crisis, a teacher shortage and a student population that’s been devastated by pandemic-induced learning challenges. The affordable housing crisis, especially for the poorest Richmonders, has only grown worse. Evictions and homelessness are spiking, with no comprehensive plan to address it. The Richmond Police Department is grappling with more than 150 officer vacancies as gun violence surges — disproportionately impacting Black families, of course — as it begins the search to replace yet another departed police chief.

It talks about the housing crisis, and that apartments are going up with lightning speed in Manchester and Scott’s Addition and (soon) in the Diamond District, while “South Side and the East End are left to fend for themselves. Redevelopment of public housing complexes remain stuck at the starting gate. The new Richmond takes priority over the old.” It does point out some of the positive news we have seen, like poverty dropping to 18% (lowest in two decades) and our “urban cool” is on the rebound as the pandemic years are more in the rearview mirror.

But the thing that struck me the most about this piece is that it is really the first marker of issues that are and will be on the table and need to be addressed in 2024 when the City elects a new Mayor and City Council (in which, I will not be a participant). We have heard lots of talk and seen lots of tweets over the years from the Mayor and others about all they are doing for the City. But we can no longer afford trading real political solutions (including listening, compromise, and common ground) for self-promotion on social media just to rack up more clicks, likes and retweets and counting that as a measure of success.

As Denzel Washington once said, “Just because you are doing a lot more, doesn’t mean you are getting a lot more done. Don’t confuse movement with progress.” Continue reading

Tumblin’ Dice

by Jon Baliles

The casino project proposal in Petersburg was unveiled this week and it is a big one. In poker terminology, it could be considered an “all-in” proposal. The ProgressIndex reports that The Cordish Companies propose a $1.4 billion “‘city within a city’ of entertainment, retail, office and residential property. Its centerpiece would be Live! Casino & Hotel Virginia, a 670,000-square foot complex that would include more than 200 hotel rooms, an entertainment arena, and more than 2,000 slot machines and 60 gaming tables.”

The proposal got the nod from Petersburg City Council this week as they formalized the partnership, but it still has to run the gauntlet at the General Assembly, and then a referendum of the voters in Petersburg. It also has to survive a chess-match of lobbying against Richmond as they try to get their casino off of life support and back to the ballot for the third time after it was rejected by voters in 2021, and then blocked by legislation in the state budget, and then withdrawn from consideration in 2022. Third time is the charm!

The Petersburg project location at Wagner Road and Interstate 95 has a lot of room to grow and the proposal even has a few (but smaller) similarities to the Green City Project in Henrico, except with a casino instead of an arena as its focal point. It, like Green City, will be built in phases and have two hotels and a large retail and residential component.

Cordish envisions building out the development in three phases, with the casino and hotel going up first. The second phase would be growing more retail businesses and possible entertainment amenities such as movie theaters around the casino and hotel. The third phase, according to Cordish, would be development of around 1,300 residential units and an eventual second hotel toward the back of the property. Continue reading

The Trophy in the Middle of the River

by Jon Baliles

Some great news this week about the one thing most everyone can agree on: the James River is awesome, and the heart of the City just got a LOT more awesome. Or at least it is pointing in that direction. Mike Platania at Richmond BizSense reported that The Capital Region Land Conservancy (CRLC) is under contract to buy Mayo Island with the ultimate goal to create public green space. The “CRLC has made an initial security deposit on the island and is currently in the due diligence phase” and expects to close on the property next year.

“If successful … Mayo [Island], that has been long-discussed and long-envisioned for a public space, can now become that in the future,” CRLC Director Parker Agelasto said. “…Mayo is truly going to be the green space that everybody has been yearning for, with a nice walkability from the Hull Street corridor.”

Agelasto added that the CRLC is waiting to hear back from the Virginia Land Conservation Foundation about a grant it applied for that would help fund the purchase. The grant money would come from the state’s Community Flood Preparedness Fund.

“It’s not a guarantee,” Agelasto said. “[But] we feel very good about where we are at the moment.” Continue reading

RVA 5X5: Enrichmond and the City’s Radio Silence

Photo credit: Flickr

by Jon Baliles

I won’t do a “Top Stories of 2022” list for this newsletter, but if I did, one of them would surely be the collapse of the Enrichmond Foundation and the radio silence on all fronts concerning its finances, the groups that depended on it, their assets, and the two historic Black cemeteries in its portfolio — Evergreen and East End Cemetery.

The important question is not so much what happened in 2022 (although that is important); the critical next steps — should anyone decide to take them — are what will happen in 2023?

A brief recap from the October 14 newsletter: “The Enrichmond Foundation was founded in the early 1990s and had grown to support more than 80 small, local, all-volunteer groups that worked to help Richmond in various ways, many of which focused on keeping the City green and clean. Enrichmond allowed the groups to use their insurance coverage and raise tax-free donations, served as a fiduciary for the funds each group raised, and distributed those funds as directed by the groups.

Suddenly in June, the Foundation announced a cessation of operations, leaving no transition plan. The Board voted to dissolve the Foundation but left no accounting of the funds it had in its accounts, and then within weeks the lawyer representing the Board stepped away from his role as counsel.

None of the “leaders” at City Hall has said anything about this. Not. A. Word.

The City’s Parks & Recreation Department has been able to assist some of the organizations, but there are so many they can’t do it all themselves. That’s why the Foundation existed. It is known that the amount of money held in trust for the various “Friends Of” groups is anywhere from $300,000 to $3 million, though I have been told recently that it is closer to the lower estimate.

While the City dawdles, how are these small “Friends Of” groups to do the important work they do (much of it is environmental) if they can’t access their donations? How can they raise money if they have no place to put it? The more this drags out, it is a safe bet those groups will lose volunteers, who will put their time toward other causes. Continue reading

Suggestions to Ease Virginia’s Housing Crisis without Additional State Money

Courtesy californiahumandevelopment.org

by James C. Sherlock

The Richmond Times-Dispatch, on cue, wrote in an editorial the other day that more state money was needed to fund local housing.

Maybe.

But that is not the first place to look.

The governor wants to condition development aid to local communities on their reforming land-use policies to permit more construction.

I have a few ideas along that line.

Proffers, also known as conditional zoning, are a recognition that real estate developments have impacts on other properties and on services provided by the local jurisdiction. Fair enough.

The money for roads, sewers and schools has to come from somewhere. Proffers make the developers and their customers pay for a share of capital improvements deemed necessary by city/county planners.

Wielded unpredictably, and sometimes unethically, they are also part of the problem. See the excellent article Politics and Proffers by Matt Ahern for the games played with proffers and their cost to the housing economy.

Then there is low-cost housing.

The Commonwealth by law permits but does not require localities to waive fees for low-cost housing. That law, originally and curiously restricted to only non-profit developers, was updated in 2019 to permit the same waivers to for-profit builders.

Send state housing funds only to jurisdictions that do so. Require in law a limit to the costs of proffers for low-cost housing.

Finally, tax Virginia’s astonishingly profitable non-profit hospitals to help them with their mission of caring for the disadvantaged — in this case in low-cost housing. Continue reading