Category Archives: Economic development

How Many Pieces Did You Say It Will Take To Build This Plant?

by Dick Hall-Sizemore

There is more good news for the Commonwealth.  As reported by the Richmond Times-Dispatch, Governor Youngkin announced on Wednesday that the Lego Group will invest at least $1 billion to build a new manufacturing facility in Chesterfield County.  It would be Lego’s only manufacturing facility in the United States.

The company projected that the 1.7 million square foot plant would create more than 1,700 new jobs over a period of ten years.

The company currently has a manufacturing plant in Mexico, but, because the United States is a key market, the company wants to shorten its supply chain issues and reduce its overall carbon footprint.  Along these lines, the plant will be designed to be “carbon neutral”.  To accomplish this, it will use some offsets.  According to the news report, “The factory will also be paired with a solar park, which will be built by 2025 and generate the energy needed for the plant to run.”  From the news report, it is not clear whether the electricity produced by the solar farm will be used directly by the factory or whether that is one of the offsets. Continue reading

Time to Play Hardball

by Carol A.O. Wolf

The recent dust-up concerning the fate of the Arthur Ash Jr. Athletic Center is, in the words of the great baseball philosopher Yogi Berra, “déjà vu all over again.”

Richmond Mayor Levar Stoney is once again pitching a big can’t-lose — this time promising a brand new mini-city complete with state-of-the-art baseball stadium, restaurants, retail shops, microbreweries, and apartments for both the rich and unrich.

Because those who don’t know their history are doomed to repeat it, I am obliged to offer this sad and shameful history lesson about a 2012 “big can’t-lose deal” involving previous Richmond City Mayor Dwight C. Jones, the pro football team now known as the Washington Commanders, the Bon Secours Health System and the city’s Economic Development Authority.

Basically, they stole the Westhampton School property.

Blinded by the glitz of Washington team owner Dan Snyder’s PR folks and many local cheerleaders, the very people charged with protecting Richmond’s public-school children decided to sacrifice them instead. Continue reading

Commonwealth Set for Major Broadband Expansion

by Dick Hall-Sizemore

One of the issues underlined by the pandemic was the need for all areas of the state to have access to broadband internet. Without access to broadband, kids (and adults) in rural areas cannot take advantage of courses offered online. To the extent that more people will be working remotely, rural areas need access to broadband in order for those people to move there. Broadband accessibility is necessary for almost all businesses and industries and rural areas will need to have such accessibility if they hope to convince private companies to bring new jobs to their areas.

Thanks to federal funding, the Commonwealth is well on its way to achieving universal availability. The source of most of that funding is the American Rescue Plan (ARP), enacted in early 2021 as part of the Biden administration’s efforts to offset the economic effects of the COVID pandemic. In July of last year, the Northam administration and the General Assembly announced an agreement to allocate $700 million of the state’s ARP funding to broadband expansion. Several months later, that amount grew by  $220 million as a result of an allocation from another section of the ARP. Finally, it is expected that Virginia will get $65 million for broadband expansion from the federal infrastructure bill passed last fall. Continue reading

The Defense Production Act as a Political Tool to Boost Solar Farms

Courtesy Dominion Energy

by James C. Sherlock

We have had multiple discussions, good ones, on the issues surrounding solar farms in Virginia.

Jim Bacon wrote an excellent column about it in February of 2021 titled “The Political Economy of Solar Farms.” It was good then and prescient as of yesterday.

He wrote another one two days earlier.  From that piece:

With the enactment of the (Virginia Clean Economy Act) VCEA, Freitas wrote in the press release, Virginia is experiencing extensive land leasing and acquisition by solar developers. More than 180 solar projects accounting for 140 million solar panels are in various stages of approval or construction. Full implementation of the ACT would consume 490 square miles of Virginia’s forests and farmland, an area twenty times the size of Manhattan.

Thanks to President Biden’s new political/industrial policy, those solar farms just got cheaper. And Chinese solar stocks just got more expensive.

Both of which were made to happen because the President removed the tariffs on Chinese solar panels. Readers rationally can be for that action or against it. But the left has settled on the Defense Production Act as a favored service animal.

So, the President, in addition to removing the tariffs, invoked that act as a national emergency response to mandate additional domestic production of solar panels.

Let’s try to pin down the nature of the emergency and the unintended consequences. Continue reading

Virginia Snags Another Fortune 500 H.Q.

Raytheon Technologies manufactures components of the Boeing F/A-18 “Super Hornet” multi-mission strike fighter aircraft featured in “Top Gun: Maverick”

by James A. Bacon

Waltham, Mass.-based Raytheon Technologies has announced that it will establish its global headquarters in Arlington. Following the recent decision of The Boeing Company to relocate its headquarters from Chicago to Arlington, the move cements Northern Virginia’s standing as the leading defense/aerospace cluster in the United States.

“The location increases agility in supporting U.S. government and commercial aerospace customers and serves to reinforce partnerships that will progress innovative technologies to advance the industry,” stated the company in a brief press release. “Washington, D.C. serves as a convenient travel hub for the company’s global customers and employees.”

The announcement was unusual for not emanating from the governor’s office, as would be typical with news of this magnitude. It contained no quotes from Governor Glenn Youngkin, Arlington officials, or Virginia’s economic development officials; no citation of the number of jobs created (if any); and no mention of how much the company will invest in making the transition. However, the press release did make a point of saying, “Raytheon Technologies has not accepted or sought any financial incentives from any state or municipality to support the establishment of the global headquarters office in Virginia.” Continue reading

Virginia’s Economic Recovery Among Weakest in the Nation… Says Virginia’s Top Economic Developer

Jason El Koubi. Photo credit: Mark Robertson-Baker, UVA Wise, by way of Cardinal News.

by James A. Bacon

Governor Glenn Youngkin, Republicans, and other critics of the previous governor’s economic policies are not the only ones who are worried about Virginia’s slow rate of economic growth. Jason El Koubi, CEO of the Virginia Economic Development Partnership, finds the Old Dominion’s lagging economic performance to be troubling, too.

Virginia currently ranks No. 47 in its jobs recovery, he said at the Southwest Virginia Economic Forum Wednesday.“ We are one of the most sluggish states in terms of getting back to our pre-employment baseline.” Reports Cardinal News: 

This is really concerning, not only because we haven’t recovered but because we’re hanging out with the wrong crowd right now. The states that have ‘powered out of the pandemic’ – North and South Carolina, Georgia, Tennessee, Florida – were not only top growth states before the shutdown, but they’re Virginia’s economic development competitors.

These are our neighbors, and this is the crowd we compete with. This is the crowd that we really need to hang with.

Continue reading

Why Not Virginia for Semiconductor Manufacturing Expansion?

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

The Boeing Announcement Is a Vote of Confidence in Virginia

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

Talking Out of Both Sides of Their Mouths

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

Planning for Telecommuting’s Effects on Virginia

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

Does This Highway Need to be Widened to Six Lanes?

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

Economic Development in the Era of CRT and COVID

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

Another Try for Natural Gas to Hampton Roads

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

We Need to Help That Poor Billionaire Out

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

Taking One More Brick from the Green Wall

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