Category Archives: Economic development

Why Not Virginia for Semiconductor Manufacturing Expansion?

Posted on May 16, 2022 by | 35 comments

Virginia Engineering Programs

by James C. Sherlock

Among the things that the Russian invasion of Ukraine has made clear is the vulnerability of Taiwan and with it, the access of the U.S. economy to the 90% of advanced computer chips manufactured there.

The national security requirement for domestic chip manufacturing brings opportunity. It is the nation’s most urgent manufacturing priority. So, why not build the needed plants in Virginia? Is the Commonwealth organized to attract those investments?

For the answer to the last question I looked at the Virginia Department of Commerce and Industry, the State Council on Higher Education in Virginia (SCHEV) and Virginia’s engineering schools and found nothing to suggest Virginia is making an organized effort.

Much of Virginia’s headline effort in engineering education is to expand opportunities for Amazon workers in Northern Virginia.

I suggest Virginia focus its Department of Commerce and Trade on chip manufacturing, create dedicated educational consortiums, identify available facilities and workforces like those of the shuttered Rolls Royce plant in Prince George County and offer tax abatement packages to actively recruit semiconductor manufacture. Continue reading →

35 Comments

Posted in Business and Economy, Economic development, Education (higher ed), Labor & workforce, Manufacturing

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The Boeing Announcement Is a Vote of Confidence in Virginia

Posted on May 15, 2022 by | 8 comments

Boeing Advanced F-15 jet fighter

by James A. Bacon

The Boeing Company’s decision to transfer its official headquarters location from Chicago, Ill., to Arlington gives Virginia significant bragging rights. The move will have little detectable short-term economic impact. The more consequential news is a promise to “develop a research & technology hub” in the area “to harness and attract engineering and technical capabilities.”

Plans at this point are vague. I’m guessing a big winner will be Virginia Tech, which last year unveiled a $248 million project to replace Randolph Hall, which houses the aerospace engineering department. Randolph Hall is connected to one of the largest university-owned stability wind tunnels in the United States. Mitchell Hall, which will replace it, will accommodate the wind tunnel and partially enclose it. Tech also is developing a major campus in Arlington in collaboration with the Amazon project there.

With $66.2 billion in annual revenue in 2021, Boeing will rank as the second largest Fortune 500 company headquartered in Virginia. The first is Freddie Mac, which had $80.6 billion in revenue and logged in at No. 47 nationally. If Boeing recovers to the $100 billion-plus level of a few years ago, it would be the largest company based in Virginia. Continue reading →

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Posted in Defense, Economic development

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Talking Out of Both Sides of Their Mouths

Posted on May 13, 2022 by | 8 comments

Route of proposed Coalfields Expressway

by Dick Hall-Sizemore

While perusing today’s edition of the Roanoke Times, I ran across an article that astounded me.  It concerned a meeting recently in Southwest Virginia about the Coalfields Expressway.  I remembered hearing about this proposed highway many, many years ago and thought that it had been dismissed as a pipe dream.  It turns out that the idea (and hope) is still alive.

The Coalfields Expressway would be a 115-mile federal four-lane, divided highway running from the intersection of I-64 and I-77 near Beckley, West Virginia to U.S. Rt. 23 in Pound, in Wise County.  West Virginia has opened 15 miles of its 66-mile portion of the proposed highway and another 21 miles are in various stages of construction or planning.  Virginia has begun constructing 7 miles of its 50-mile portion.  That stretch overlaps with Rt. 460, linking Grundy to Kentucky.  The cost of the Virginia portion is estimated at over $3 billion. Continue reading →

8 Comments

Posted in Economic development, Infrastructure, Politics, Taxes, Transportation

Planning for Telecommuting’s Effects on Virginia

Posted on May 8, 2022 by | 42 comments

By James C. Sherlock

I think that we don’t yet realize the full impact of the revolution being wrought by the telecommuting that accelerated during COVID.

Virginia Railway Express Route Map

I am sure I don’t.  But Virginians, and our state and local governments, must try to figure it out.

We are moving towards a world in which white collar workers will be increasingly exempt from commutes.

We have already seen during COVID the leading edge of the migration of workers and their families away from many of America’s cities, especially those with increasing crime, closed businesses and otherwise lowered quality of life.

Look at New York City.  I visited it a couple of months ago.  Many places I used to enjoy have become an urban wasteland.  D.C. is not far behind.

Virginia urban areas and some of our suburbs have experienced COVID-related business failures and are threatened with more that result from the lifestyle changes that COVID brought.

The attractions in these places are not directly related to employment, but rather to population density. Restaurants, night life and the arts were exposed by COVID as vulnerable.  Some people got out of the habit of centering their social lives on them.

The costs of cities and suburbs, especially housing, are less and less affordable.  Prices have continued to increase in the face of fast-rising mortgage rates (Note 1).  This cannot continue, so it will not.

Other Virginia locations that offer attractive lifestyles, lower costs of living and the communications infrastructure to support telecommuting with bandwidth and speed at scale can expect to see in-migration and its economic benefits if they both prepare for and solicit them.

The knock-on effects may prove far-reaching.  I will offer a few of them for consideration.  Virginia state and local governments will either plan to accommodate them or be run over by effects which, planned for or not, they cannot control.

Continue reading →

42 Comments

Posted in Business and Economy, Demographics, Economic development, Education (K-12), Governance, Infrastructure

Does This Highway Need to be Widened to Six Lanes?

Posted on May 5, 2022 by | 33 comments

i-64 in New Kent County  Photo credit: Richmond Times-Dispatch

by Dick Hall-Sizemore

There is a campaign underway to expand a stretch of I-64 from Richmond to James City County.  Currently, the Interstate highway is a four-lane divided highway.  The proposal is to add an additional lane in each direction.

The Department of Transportation estimates the cost of the project at $750 million.

The first public evidence of the campaign came in the form of proposed amendments to the state budget bill.  The House of Delegates has proposed dedicating $30 million in general fund revenues to the project.  The Senate has gone bigger; it proposes $190 million in general fund appropriation. Continue reading →

33 Comments

Posted in Economic development, Infrastructure, Transportation

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Economic Development in the Era of CRT and COVID

Posted on April 25, 2022 by | 23 comments

George Allen

by James A. Bacon

George Allen is no longer engaged in the rough and tumble of partisan politics. But as a Reagan Ranch Presidential Scholar with the Young America’s Foundation, he still gives a fair number of speeches. And when he does, he sounds the Reaganesque themes that he championed as Governor and then U.S. Senator: individual liberty, personal responsibility, and opportunity for all.

Allen is not a fan of social engineering and the welfare state. The best social program ever invented is a job, he says. From that proposition flows another: a top priority of Virginia’s governor should be to foster a business climate that stimulates private investment and job creation. And from that corollary flows another: Virginia needs to restore its economic competitiveness.

Once upon a time, in the 1980s and 1990s, Virginia had one of the top-performing economies of any state in the country. The Old Dominion, which Allen dubbed the Silicon Dominion when he was governor, enjoyed rapid economic growth. Incomes rose, making Virginia the most affluent state of the Old South. People flooded in from other states seeking job opportunities. State government garnered national kudos for its professionalism and efficiency. Public schools were among the best in the country. The public higher-ed system was sometimes said to be the best in the country. The state consistently ranked among the best in the country for business.

But Virginia has been losing its competitive edge, Allen said in an interview with Bacon’s Rebellion, and thanks to policies implemented by the Northam administration, the state is at risk of falling even further behind. Continue reading →

23 Comments

Posted in Economic development, Uncategorized

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Another Try for Natural Gas to Hampton Roads

Posted on April 1, 2022 by | 33 comments

Existing 12″ natural gas pipelines proposed for replacement with new 24″ lines. Click for larger view.

by Steve Haner

Natural gas pipeline companies have applied to federal regulators with another proposal to enhance supply into Virginia’s Hampton Roads region, despite the earlier failures of two similar high profile efforts.

Columbia Gas Transmission, part of TC Energy which is best known for the recently-rejected Keystone XL pipeline, is proposing to replace 48 miles of existing, 1950s-era, 12-inch diameter pipe with new 24-inch pipe. Compressor stations and other facilities would also be modernized. This proposal is being marketed as the Virginia Reliability Project and stays within existing right of way from Sussex County to Chesapeake.

Transcontinental (Transco), in a separate application to the Federal Energy Regulatory Commission, wants to add a 6.35-mile loop of new 24-inch pipe in Brunswick and Greensville counties, and improve a compressor there, allowing it to supply an additional 105,000 dekatherms per day to points east and south. It has been named the Commonwealth Energy Connector Project.

From the S&P Global story linked in the adjacent paragraph. Click for larger view.

To some writing for the energy trade press, the combined projects look like an effort to make up for the loss of the Atlantic Coast Pipeline, abandoned by Dominion Energy. It was to provide substantial new supply to regional retailer Virginia Natural Gas. Following that retreat in the face of environmental opposition and a change in attitude by elected Virginia leaders, the VNG Header project was also abandoned. Will this third proposal fare better? Continue reading →

33 Comments

Posted in Business and Economy, Economic development, Energy, Environment, Regulation

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We Need to Help That Poor Billionaire Out

Posted on March 7, 2022 by | 73 comments

by Dick Hall-Sizemore

With all the huffing and puffing about CRT, face masks, and “wokeism” at UVa, Bacon’s Rebellion has ignored what could be the biggest scam in the General Assembly: the subsidization of an ultrarich guy and his plan to build a football stadium and surrounding “mini-city” in Northern Virginia.

The General Assembly is now in the midst of one of its periodic quests to lure a professional sports team to Virginia. This time it is the Washington Commanders, the team formerly known as the Redskins.

Two bills have passed their respective houses in the General Assembly related to this issue: HB 1353 (Knight, R-Virginia Beach) and SB 727 (Saslaw, D-Fairfax).  Both would create an authority that would have the power to issue bonds to finance a portion of the cost of the project. It is estimated that the stadium would cost about $1 billion. The bonds would be financed with a mechanism commonly used with such projects: tax increment financing. Briefly, that would involve a portion of the increased tax revenue resulting from the project being dedicated to the debt service on the bonds. Continue reading →

73 Comments

Posted in Business and Economy, Economic development, General Assembly

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Taking One More Brick from the Green Wall

Posted on March 1, 2022 by | 13 comments

Mountain Valley Pipeline. Image source: The Virginia Mercury.

by James C. Sherlock

The green wall preventing businesses from operating at some level of certainty when and if their development proposals will be approved is missing a brick today.

The days of a Virginia State Air Pollution Control Board and State Water Control Board overruling the findings of the Virginia Department of Environmental Quality in permitting matters are over.

SB 657 passed the House and is on its way to the Governor. Continue reading →

13 Comments

Posted in Business and Economy, Culture wars, Economic development, Energy, Environment

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Warren Harris: From Economic Development Director To Embezzler

Posted on February 15, 2022 by | 7 comments

by Kerry Dougherty

Does anyone believe that if they stole almost $80,000 from the city of Virginia Beach, they’d be able to walk? Not spend a day in jail? Get a slap on the wrist?

Of course not. But the rules are different for crooked city officials.

Yesterday, the former head of Virginia Beach Department of Economic Development — Warren Harris, a liar and thief — was sentenced on four felony counts of Embezzlement by a Public Official. Despite a plea from prosecutors for jail time, Circuit Court Judge Steven C. Frucci gave him an eight-year prison sentence, every single day of it suspended.

The sentencing guidelines suggest just probation. Of course, there’s nothing to prevent a judge from going above the guidelines.

If ever a case cried out for jail time, this is it. Stealing from your neighbors, from the folks who pay your salary, is a particularly despicable act and a violation of public trust. Continue reading →

7 Comments

Posted in Economic development, Scandals

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Impractical Solar Power, Illustrated With the Math

Posted on January 19, 2022 by | 45 comments

by David Wojick

This was first published at cfact.org and is reproduced with Wojick’s permission.

Many states and the utilities they regulate are talking about replacing their coal and gas fired generators with solar and wind power. For example, I recently wrote about how the crazy-named Virginia Clean Economy Act already has almost 800 square miles of solar slabs in the developmental lineup.

Given the high intermittency of wind and solar, the idea of running on solar and wind turns out to be an extremely costly prospect. It is all about reliability. Electricity must be there when we need it. Below I present some simple calculations that show just how bad this idea really is. Continue reading →

45 Comments

Posted in Economic development, Energy, Environment, Regulation

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Can Financially Failing Coal Plant Be Closed?

Posted on January 13, 2022 by | 8 comments

Virginia City Hybrid Energy Center, St. Paul, VA. Dominion Photo.

by Steve Haner

The economic decision on whether and when to cut and run from a losing investment is always complicated. The debate over the future of Dominion Energy Virginia’s economically failing coal plant in Wise County will be complicated by power politics.

The State Corporation Commission has been asked to accept an agreement between the utility, the Office of the Attorney General and environmental opponents of fossil fuel generation to consider closing the plant in just a few years. The stipulation calls for a report later this year on the economic cost and benefits of pulling the plug as soon as 2026.

Dominion has been proposing to operate the plant, which opened in 2012, until at least 2045. Legally it can, despite the move away from fossil fuels in recent state laws. In the pending matter before the SCC, it continued to argue Wise County should stay open despite the economic losses.

The economic costs either way will fall mainly on the company’s customers. We have been subsidizing the operation of the money-losing plant as it sank into red ink. But if the decision is made to close it, the utility will seek to recover – from its customers – the $1.6 billion of outstanding investment it has in the facility.  Heads they win and tails we lose.

That’s how we do electric power regulation in Virginia. It was the General Assembly that mandated construction of the plant, far outside Dominion’s service territory, in 2007 legislation riddled with political trade-offs. The investment would never have been found reasonable and prudent by the SCC absent legislative interference, but was deemed “in the public interest” by law. Continue reading →

8 Comments

Posted in Economic development, Energy, Environment, General Assembly, Regulation

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Youngkin Expounds on His Expansive Economic-Development Vision

Posted on January 3, 2022 by | 53 comments

Glenn Youngkin. Photo credit: Virginia Business

by James A. Bacon

Virginia’s economy has grown at a sluggish 0.9% compounded annual rate of growth over the past eight years, says Governor-elect Glenn Youngkin, and he wants to get it “really cranked up” to a normalized rate of 2.5%. To accomplish that goal, he tells Virginia Business magazine, he proposes to do three things: (1) cut taxes, (2) bring down the cost of living, and (3) cut regulations.

In practical terms, that includes not shutting down the economy with COVID-19 lockdowns and shutdowns. It means keeping schools open. And it means no vaccine mandates.

Says Youngkin: “Executive orders that mandate that state employees have to get a vaccine and wear a mask, or an executive order that makes children [in] K-12 have to wear a mask — we’ll work with [the new commissioner of health and new Board of Health] to rescind that.”

While Youngkin says he wants to provide tax relief to Virginians, he does not sound like a small-government conservative. Citing the link between K-12 education and workforce development, he touts his plans for “the largest education budget in the history of Virginia” — more money for teacher salaries, for school facilities, and funding of special education programs. The governor-elect also wants to expand mental health programs, high-speed internet access across Virginia, and spending on law enforcement. Continue reading →

53 Comments

Posted in Economic development, Education (K-12), Labor & workforce

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How’d Virginia Do in “The Great Pandemic Migration?”

Posted on December 31, 2021 by | 57 comments

Glenn Youngkin was right. Yes, Virginia, we have a problem.

by Chris Saxman

Most mornings start with brewing a large pot of coffee, letting the dogs out into the fenced in backyard, and waiting for the papers to be delivered. Usually I can skim through the local old soldier, the Richmond Times Dispatch, before the coffee finishes brewing. But that first magical sip of morning hits with the opening the Wall Street Journal.

Ahh….the splendor of predawn America.

I read newspapers in reverse by taking the sections and rearranging them in order to read as many articles as possible before doing battle with the editorial section. The Sports section is always first. It’s like stretching before a work out — not legally required, but strongly encouraged.

SO. Wednesday’s lead editorial headline in the WSJ print edition really grabbed my attention:

The Great Pandemic Migration

Boom.

The online version reads like this:

The Great Pandemic Migration
Census data reveal huge shifts out of the most locked-down states.

As Sheriff Buford T. Justice would say, “That’s an attention getter.” Continue reading →

57 Comments

Posted in Demographics, Economic development, Uncategorized

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Northam’s Economic-Development Legacy

Posted on December 22, 2021 by | 19 comments

Governor Ralph Northam

by James A. Bacon

Business Facilities magazine has ranked Virginia first in the nation for its overall business climate, while Tennessee and Massachusetts snagged top spots for business dealmaking and the best workforce/education system, respectively. The site-selection publication cited Virginia’s location adjacent to Washington, D.C., its pro-business work environment, and its strong workforce and educational system.

Not surprisingly, Governor Ralph Northam cited the ranking as a vindication of his economic development policies. “I am proud of the work our administration has done to create the strongest business-friendly environment in the nation. During my term, we’ve attracted more than $80 billion in economic development, creating more than 100,000 jobs — a record for any governor. Virginia has set a new standard for all other states.”

It is a fact that Virginia has reclaimed the top spot in economic-development rankings. However, Virginians might legitimately ask if these plaudits make a difference in the real world. Are Northam’s self-congratulations warranted? Has Virginia really “set the standard” for other states? Continue reading →

19 Comments

Posted in Economic development

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