by James A. Bacon
Newark, N.J.-based AeroFarms will invest $42 million to build its largest, most sophisticated indoor vertical farm to date in a joint Danville-Pittsylvania County industrial park. The project will create 92 new jobs.
Virginia competed with North Carolina for the project. Subsidies include a $200,000 grant from the Commonwealth’s Opportunity Fund, a $200,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund, $190,000 from the Tobacco Regional Opportunity Fund, and an unquantified tax benefit from locating in a Virginia Enterprise Zone.
Aerofarm’s business model is incredibly cool. The company uses proprietary aeroponic growing technology to “produce highly flavorful leafy greens at at rate 390 times more productive than field-grown plants,” states a press release from the Governor’s Office. The farming techniques use a fraction of the water and fertilizer of traditional agriculture. Continue reading
The Center for Innovative Technology’s iconic soon-to-be-former headquarters.
by James A. Bacon
I’m so old that I remember when the Center for Innovative Technology, created to catalyze high-tech development in Virginia, was in charge of allocating state funds for university-based R&D. After commanding center stage in Virginia’s conversations about technology development during the 1990s and 2000s, CIT underwent successive downsizings to the point where it is a mere shell of its former self. Responsibility for overseeing state funding for R&D shifted to the State Council of Higher Education for Virginia (SCHEV), where it still resides.
The politics driving CIT’s dismemberment are long since forgotten. Now Governor Ralph Northam proposes to combine CIT with SCHEV’s Virginia Research Investment Committee, the Commonwealth Center for Advanced Manufacturing and the Commonwealth Cyber Initiative under the mantle of the Virginia Innovation Partnership Authority, reports the Richmond Times-Dispatch.
“What we have right now are multiple initiatives, all with good intent,” Secretary of Commerce and Trade Brian Ball said in an interview. “What we’re trying to do is pull all these together in one authority so we can allocate resources in the most efficient possible way.” Continue reading
by James A. Bacon
The paucity of developable sites and buildings resulted in Virginia communities being eliminated from consideration for at least 65 projects totaling 19,000 jobs and $5 billion in capital investment over the past three years, according to Virginia Economic Development Partnership President Stephen Moret.
Of the 466 large suites available for development as factories, distribution centers, call centers and other job-producing businesses, only 30 are classified as Tier 4 or Tier 5, meaning they are ready to compete for big economic development projects, Moret told the Virginia Growth and Opportunity Board Monday. Only two sites — one in Hampton Roads and one in the Roanoke/New River Valley region — qualified for the highest level of readiness.
In Moret’s analysis, site development is one of the four drivers behind site location decisions, along with workforce characteristics, supportive business climate, and quality of life. Virginia has historically under-invested in site preparation compared to states with whom it competes for manufacturing and distribution/logistics investment.
Todd Gilbert, House Majority Leader and soon-to-be House Minority Leader: GOP must learn to appeal to suburban voters.
by James A. Bacon
So, the Republicans have wrapped up their annual “Advance” — a retreat at the Omni Homestead resort in Bath County. And if reports of the two newspapers that covered the event are to be believed — one from the Washington Post and one from the Roanoke Times — GOP leaders have absolutely no clue how to become competitive statewide.
Attendees do agree that they got shellacked in the November election, and they share a vague sense that they need to increase their appeal in the suburbs. But their only hope at this point resides in the conviction that Democrats will over-reach with Trump Derangement Syndrome in Washington and enact California-style legislation in Richmond. If voters get buyer’s remorse, they might start voting for Republicans again.
But you can’t defeat something with nothing, and there is no indication in either news account that Republicans gave much thought to what they stood for, other than not being insane. Continue reading
by James A. Bacon
A new study, “The Commonwealth Research and Technology Strategic Roadmap,” has identified six strategic technology clusters exhibiting the greatest potential for Virginia’s economic growth. The report, conducted by the State Council of Higher Education for Virginia, is not prescriptive — it does not offer legislative recommendations. Rather, the report identifies fruitful areas for collaboration between education, industry, government, and economic developers.
The most promising areas for focused research and economic development include:
- Life and health science
- Autonomous systems
- Space and utilities
- Agricultural and environmental technologies
- Data science analytics
Collaboration should take the form of aligning investments in R&D, talent development, industry engagement, capacity building (such as venture capital), and marketing/advocacy for the purpose of globally competitive industry clusters. Continue reading
by James A. Bacon
As a follow-up to my post about Stephen Moret, whose contributions to Virginia’s economic development have been amply recognized, I’d like to acknowledge the work of an important figure who has largely flown under the radar: Tom Barkin, CEO and president of the Federal Reserve Bank of Richmond.
Federal Reserve Bank presidents are quoted mainly for their thoughts about Federal Reserve Board monetary policy. Presidents of the Richmond Fed, for instance, have been known over the years as monetary hawks, advocating the Fed’s role as inflation fighter. Although the Richmond Fed has always gathered data and business intelligence about economic activity in the 5th federal reserve district, which includes Virginia, previous bank presidents rarely delved into the nitty gritty of local economic development.
Barkin is different. He may be engaged in national policy debates — I don’t know — but I can state with certainty that he has reoriented the analytical and research resources of the Fed to figuring out how to promote economic growth and development within his district, which encompasses Maryland, Delaware, West Virginia, Virginia, North Carolina and South Carolina. He has been traveling throughout the region — not just to the big cities — and talking to local leaders. One particular focus has been rural community development. Continue reading
Virginia Business magazine has named Stephen Moret, CEO of the Virginia Economic Development Partnership, as its 2019 business person of the year. The recognition is richly deserved. In less than three years, Moret has overhauled the badly dysfunctional VEDP, directed the effort to capture Amazon’s HQ2 project, restored Virginia to a top ranked state for business climate, and launched several initiatives that should improve the state’s economic competitiveness even more in the years to come.
The magazine has an excellent profile in its current edition, telling the story of his upbringing in a small Mississippi town, his winning a Louisiana State University scholarship by playing the trumpet, his contributions as a senior member of Louisiana Governor Bobby Jindal’s administration, and then his move to Virginia as chief economic developer.
The only insight I would add to the Virginia Business profile would be to note the breadth of Moret’s interests. The VEDP has a narrow scope: recruiting out-of-state corporate investment to Virginia (with a side job of promoting foreign trade). Moret, quite rightly, understands that the key to attracting corporate investment is building and retaining human capital. He also comprehends the role of university-centered innovation ecosystems in driving economic growth. Weaving together the strands of corporate recruitment, workforce development, and higher-ed, he has emerged not only as the leading practitioner of economic development in Virginia but its most visible and articulate theoretician.
The Tobacco Region Revitalization Commission (TRRC) has again demonstrated that the legislature needs to re-examine its operations and, perhaps, overhaul it altogether.
First, a little background. TRRC was established in 1999 to revitalize Virginia’s tobacco region and compensate tobacco farmers for the decline in tobacco production. Funding for these activities was to come from the Commonwealth’s share of the Master Settlement Agreement between 46 state attorneys general and large tobacco manufacturers. Through a complex “securitization” of half of its future settlement payments, the amount available for TRRC was capitalized at $1 billion. In 2032, the MSA payments will resume. Continue reading
Beneficiaries… or victims… of a $15 minimum wage?
by Hans Bader
It doesn’t make sense to ban jobs that pay a living wage, just because an employer can’t afford to pay a still higher wage. But that is what a $15 minimum wage does in regions where living costs and wages are low. There are cheap regions to live in where $11 an hour supports a decent lifestyle. If someone can afford decent food, clothing, and housing on $11 an hour, and their employer can’t afford to pay them more than $12 an hour, it is pointless and cruel to ban their job just because it pays less than $15 per hour.
But that is what a $15 minimum wage does. It bans jobs that pay less than $15 per hour, regardless of whether an individual employer and worker have a good reason for a lower hourly wage.
Virginia is now poised to join seven other left-leaning states, such as New Jersey, in imposing a $15 minimum wage. The incoming majority leader of the state senate, Richard Saslaw, D-Springfield, has introduced a bill to increase the state’s minimum wage to $15 by 2025, and then adjust it for inflation in future years. Every Democrat in the state senate has already voted for a similar bill in the past, and Democrats took control of Virginia’s legislature this November. Continue reading
by James A. Bacon
Employment growth in Virginia’s Appalachian region since 2002 has been the weakest of all five states in the Central Appalachian region, according to data contained in a recent Appalachian Regional Commission (ARC) report, “Industrial Make-up of the Appalachian Region: Employment and Earnings, 2002-2017.”.
Making matters worse, job growth in Central Appalachia was the worst in all of Appalachia, which was half that of the United States as a whole.
The growth gap between Virginia on the one hand and Tennessee and North Carolina on the other has been particularly marked, the gap between Virginia on the one hand and West Virginia and Kentucky not quite as bad.
Earnings growth in Appalachia also has severely lagged that of the United States as a whole — 17.5% compared to 27.3%. Continue reading
They didn’t ask this question until now? Will the wave of Amazon-inspired development in the Pentagon City area of Arlington County overwhelm the region’s transportation network? “Arlington planners, and nervous neighbors, want to know,” reports the Washington Business Journal. Some neighborhood groups are wary that the point of the planning review is to clear the way for a major up-zoning in the area. “They fear the county could determine that the neighborhood has the transportation infrastructure to handle more residents and allow for density increases — even though they believe the opposite is true.”
Meanwhile, JBG Smith Properties and other developers are pitching massive new projects around the new Amazon HQ. Not coincidentally, the WBJ reports, “JBG Smith ramped up its political giving in Virginia with control of the General Assembly on the line.” JBG Smith’s Virginia campaign contributions this electoral cycle: $34,206.
Glad to hear that “Black Enterprise” is still a thing. The Mount Olive Baptist Church in Culpeper wants to create a network of support, mentorship and information for African-American small business owners. Black business ownership is increasing, but black entrepreneurs face big challenges. The goal of the network is to help them gain knowledge about finances, start-up capital and the industrial/managerial skills it takes to grow successful enterprises, reports the Star-Exponent. As the politics of grievance and victimhood have taken hold nationally, we don’t hear much about black enterprise these days. I cannot help but note that this initiative comes from a black church, not a foundation-funded think tank staffed by white intellectuals.
Can you say “overreach”? Virginia Tech will spend $5 million to $10 million to launch a biomedical research facility in Washington, D.C. by early 2021, the university announced yesterday. On a campus of a new Children’s National Hospital campus, four or five Virginia Tech research teams will conduct research on cancers of the brain and nervous system. Virginia Tech President Timothy D. Sands said in a statement the partnership fits Tech’s ambition “to solve big problems and create new opportunities in Virginia and D.C. through education, technology and research.” Continue reading
by James A. Bacon
You most likely missed it because it has gotten next to zero publicity, but the Commonwealth does have an economic development strategy for rural Virginia.
In 2017, a group of rural development stakeholders come together to form a “Rural Think Tank” to identify policies the state should pursue to position smaller metros and rural areas for economic growth. After deliberating, the twelve think tank members came up with five strategic priorities, as described in the latest edition of the Virginia Economic Review, a publication of the Virginia Economic Development Partnership (VEDP). This second edition of the quarterly publication is devoted to “America’s Rural Growth Challenge.”
The priorities include:
Ubiquitous broadband access. Topping the list is ubiquitous broadband access, a priority embraced by the Northam administration that receives broad bipartisan support. The ability to plug into the Internet is a necessity not only for business growth but is essential to education, healthcare, social connectivity, and the quality of life. As the Virginia Economic Review quotes Didi Caldwell, past chair of the Site Selection Guild, put it, “Broadband is to the 21st century was electrification was to the 20th. Rural communities need it to thrive and survive.” Continue reading
by James A. Bacon
Virginia is a blue state now. Not only do Democrats occupy all statewide elected positions — two U.S. senators, governor, lieutenant governor, and attorney general — with yesterday’s election, they control both houses of the General Assembly.
Republicans got their booties kicked. And the butt-stomping is not likely to subside. The Dems will control the next redistricting, which will cement their dominance of the legislature. Auguring well for the blue team in the future, the fastest-growing region of the state, Northern Virginia, now is pure blue with bits of purple on the exurban fringe. By contrast, Republican strongholds in rural Virginia have shrinking or stagnant populations. Also favoring Democrats in the long run is the increasing percentage of racial/ethnic minorities in the state and the declining percentage of whites.
Republicans need to re-define who they are and what they stand for, or they will become a permanent minority. News reports say that dislike of Donald Trump drove Democratic voter turnout, but the Blue Tide is much broader and deeper than voter animus of one man. Take Trump out of the equation after the 2020 election, and Virginia Republicans still have a huge problem.
Can the Republicans re-calibrate? I certainly hope so, because I’m terrified of the Democratic Party agenda of $15 minimum wage, spiking the right-to-work law, a damn-the-torpedoes-full-speed-ahead rush to a 100% renewable electric grid, spending and taxing, taxing and spending, and injecting its grievance-and-victimhood agenda into the consideration of every issue. But Republican priorities on culture war issues — guns, abortion, transgenders — are not winning issues statewide. As long as Republicans remain captive to its rural/small-town base, I don’t see how it can reinvent itself.
What does a rejuvenated Republican Party look like? (Or, if the GOP is incapable of reinventing itself, what does a successor party look like?) Continue reading
by Chris Braunlich
Are a majority of Democratic candidates for the Virginia General Assembly “anti-worker?” Based on their response to a Virginia Chamber of Commerce survey, it would seem that way.
General Assembly candidates were surveyed on whether they would support Virginia’s Right To Work (RTW) laws. Republicans were unanimously supportive. Democrats were almost equally opposed to retaining the Commonwealth’s 72-year-old law, with only five responding they would keep it.
The “comments” section of the survey betrayed the ignorance of many candidates about the advantages of Right To Work, portraying the law as a Dickensian throwback pitting businesses against workers with some citing a questionable recent Oxfam survey (see column by Chris Saxman) ranking Virginia low on “best state for workers.”
The truth shows a very different picture. Study after study demonstrates that a state Right To Work law improves not only the opportunity for a worker to have a job, but also drives personal incomes higher. Continue reading
by James A. Bacon
I was saddened to hear that former Governor Jerry Baliles, a moderate, pro-business Democrat, passed earlier this week. Man, oh, man, I miss him.
Virginia Democrats have begun fantasizing about the left-wing agenda they will pursue if, as they expect, they take control of both houses of the General Assembly. Guns, abortion, and the Equal Rights Amendment are high on the list of priorities, reports the Virginia Mercury.
I’ll let others fight the culture-war battles. What most worries me are the economic issues — $15-per-hour minimum wage and a repeal of the Right-to-Work law. If enacted, those two proposals would eviscerate the economy of rural Virginia. You could package them as the Rural Virginia Job Destruction Initiative.
What a long road the Democratic Party of Virginia has traveled in the three decades or so since Baliles was governor. A Richmond attorney who was born and raised in Patrick County, he had a foot in both urban and rural Virginia. As a Democrat, he was comfortable using the power of the state to pursue his agenda, but it was a pro-growth, pro-business agenda. He raised taxes to bolster transportation spending. He championed K-12 education and, recognizing Virginia’s role in a globalizing economy, emphasized global studies in the schools. He also led numerous overseas missions — more than any other governor before him, if I recall correctly — in the quest to bring foreign investment to Virginia. Continue reading