MBWRC Packet 190812 FINAL
Mary Ball Washington Regional Council GO Virginia Region 6 www.govirginia6.org August 12, 2019 Rappahannock Community College, Glens Campus 12745 College Drive, Glenns, VA 23149
Call to Order William Beale
Introductions William Beale
Public Involvement William Beale
June 10, 2019 Meeting Minutes Approval (ACTION ITEM) William Beale
Financial Report (ACTION ITEM) Kate Gibson
Discussion of Project Funding Placeholders (ACTION ITEM) Jennifer Morgan
Executive Committee Report & Actions Taken William Beale
Growth & Diversification Plan Update Review and Approval
FY20 Capacity Building Contract Approval (ACTION ITEM) William Beale
Project Pipeline Development Update Jennifer Morgan
Current Project Reports Jennifer Morgan
Break for Lunch
Growth & Diversification Plan Update Final Approval (ACTION ITEM) Neal Barber, Community Futures
Meeting Schedule Jennifer Morgan
Adjournment William Beale MINUTES OF THE MEETING OF THE MARY BALL WASHINGTON REGIONAL COUNCIL June 10, 2019 Rappahannock Electric Cooperative Bowling Green, Virginia www.govirinia.org
MEMBERS PRESENT AND VOTING: Vice-Chair – Carlton Revere, Bruce Davis, Jackie Davis, Val Foulds, Steve Goodall, Lisa Hull, Ann Lewis, Kim McClellan, Morgan Quicke
MEMBERS ABSENT: Chair – William Beale, Wally Beauchamp, Lou Belcher, Elizabeth Crowther, Stephanie Heinatz, Anne Richardson, Bryan Taliaferro, John Wells, Kimberly Young
OTHERS IN ATTENDANCE: Jerry Davis, Liz Povar, Angela Freeman
STAFF/CONSULTANTS: GWRC – Kate Gibson, Jennifer Morgan, Community Futures – Neal Barber, Mangum Economics – Fletcher Magnum
CALL TO ORDER Mr. Revere called the meeting to order at 11:00 am with a quorum present.
INTRODUCTIONS Ms. Gibson introduced Jennifer Morgan to the Council as the new GO Virginia Program Coordinator for Region 6.
PUBLIC INVOLVEMENT No members of the public wished to speak.
GROWTH & DIVERSIFICATION PLAN UPDATE Fletcher Magnum, Magnum Economics updated Council on the current economic profile of the region. Dr. Magnum explained that overall trends have not changed significantly since the original Growth and Diversification Plan analysis in 2017.
Neal Barber, Community Futures updated Council on regional stakeholder meetings and highlighted common themes from each meeting, including stopping out-commuting, improving broadband, and focusing on regional collaboration. Furthermore, Mr. Barber explained that many who attended the meetings emphasized that workforce training/education programs do not align with employer needs and see an opportunity for Council here.
1 MINUTES OF THE MEETING OF THE MARY BALL WASHINGTON REGIONAL COUNCIL June 10, 2019 Rappahannock Electric Cooperative Bowling Green, Virginia www.govirinia.org
APRIL 8, 2019 MEETING MINUTES APPROVAL Mr. Quicke moved to approve the April 8 2019 Meeting Minutes, and Mr. Goodall seconded the motion. The motion passed unanimously.
FINANCIAL REPORT Ms. Gibson presented the financial report for April 2017-April 2019. Mr. Davis moved to approve the financial report, and Ms. Foulds seconded the motion. The motion passed unanimously.
BUDGET REVISION DISCUSSION & APPROVAL Ms. Gibson presented a draft Capacity Building Budget revision. The Region 6 Capacity Building Budget includes funding from FY17, FY19, and FY20. The oldest money must be spent first. The revision shifts line item amounts between fiscal years, but keeps the sum of each line item across the three years the same, to better reflect the order in which funds will be spent. Ms. McClellan moved to approve the budget revision as presented, and Mr. Davis seconded the motion. The motion passed unanimously.
EXECUTIVE COMMITTEE REPORT & ACTIONS TAKEN Ms. McClellan reported on the business discussed and actions taken at the Executive Committee Meeting on May 17, 2019. The Executive Committee approved the continuation of the George Washington Regional Commission as the support organization for GO Virginia Region 6, approved the FY20 Capacity Building Budget, and approved the Fredericksburg Regional Alliance and the Middle Peninsula Alliance to develop a pipeline of projects in their respective subregions. Due to conflicts of interest, only one Executive Committee member present could vote to approve the Northern Neck Chesapeake Bay Region Partnership for project pipeline development in the Northern Neck sub region, therefore this proposal must come before the Council. Mr. Davis moved to approve all Executive Committee actions, and Mr. Goodall seconded the motion. The motion passed unanimously.
PROJECT PIPELINE DEVELOPMENT DETERMINATIONS APPROVAL Mr. Davis moved to approved the Northern Neck Chesapeake Bay Region Partnership as the agency to develop a pipeline of projects for the Northern Neck sub region, and Mr. Quicke seconded the motion. The motion passed unanimously, with Ms. Hull abstaining.
2 MINUTES OF THE MEETING OF THE MARY BALL WASHINGTON REGIONAL COUNCIL June 10, 2019 Rappahannock Electric Cooperative Bowling Green, Virginia www.govirinia.org
CURRENT PROJECT REPORTS Ms. Povar provided updates on the PamunkeyNet Business Plan project, the Middle Peninsula Alliance Business Site Readiness Planning project, and the Middle Peninsula Project Pipeline Development effort. Mr. Jerry Davis provided updates on the Flexible Office Space Due Diligence, Welding Training Program, and Northern Neck Region- Wide Site, Building & Infrastructure Study projects. Ms. Gibson provided updates on the Virginia Sea Grant Planning Grant, Good Jobs Here, and Cybersecurity Certification Program projects.
MEETING SCHEDULE The next meeting of the Regional Council will take place on August 12, 2019.
ADJOURNMENT Being no further business, the meeting was adjourned at 12:37 pm.
Respectfully submitted, Jennifer Morgan, Economic Development Coordinator George Washington Regional Commission
3 Financial Report - Capacity Building Funding
Mary Ball Washington Regional Council (GO Virginia Region 6)
Report Period: April 2017 - May 2019
Report Date: 8/12/2019 FY18 Capacity Building FY17 (100% Match) FY19 FY19 FY20 Expenditures Capacity Building MOVED TO PROJECT Capacity Building Capacity Building Capacity Building Under/Over (since April 2017) (No Match) FUNDING (No Match) (50% Match) (No Match) Total by Line Item by Line Item Region 6 Allocation Total $400,000.00 $0.00 $250,000.00 $111,111.00 $250,000.00 $1,011,111.00 Budget GWRC Staffing (Salary, Fringe, and Indirect) $95,988.00 $0.00 $49,873.00 $0.00 $140,000.00 $285,861.00 $120,962.47 $164,898.53 Community Futures Staffing $4,000.00 $0.00 $12,000.00 $0.00 $0.00 $16,000.00 $9,100.00 $6,900.00 Meetings $3,374.00 $0.00 $1,073.00 $0.00 $2,000.00 $6,447.00 $3,743.67 $2,703.33 Travel $2,217.00 $0.00 $536.00 $0.00 $3,000.00 $5,753.00 $3,370.05 $2,382.95 Marketing/Outreach $521.00 $0.00 $0.00 $0.00 $2,000.00 $2,521.00 $1,001.28 $1,519.72 Legal Expenses $0.00 $0.00 $4,000.00 $0.00 $0.00 $4,000.00 $0.00 $4,000.00 Equipment $0.00 $0.00 $0.00 $0.00 $1,000.00 $1,000.00 $0.00 $1,000.00 G&D Plan Development $93,900.00 $0.00 $32,518.00 $0.00 $4,482.00 $130,900.00 $93,900.00 $37,000.00 Capacity Building Efforts (no match) $200,000.00 $0.00 $0.00 $0.00 $23,000.00 $223,000.00 $20,130.00 $202,870.00 Project Pipeline Development $0.00 $0.00 $150,000.00 $0.00 $0.00 $150,000.00 $0.00 $150,000.00 Future Consulting Needs $0.00 $0.00 $0.00 $0.00 $4,518.00 $4,518.00 $0.00 $4,518.00 Contingency $0.00 $0.00 $0.00 $0.00 $70,000.00 $70,000.00 $0.00 $70,000.00 Project Reserves $0.00 $0.00 $0.00 $111,111.00 $0.00 $111,111.00 $0.00 $111,111.00 Total $400,000.00 $0.00 $250,000.00 $111,111.00 $250,000.00 $1,011,111.00 $252,207.47 $758,903.53 Expenditures (since April 2017) Total $252,207.47 $0.00 $0.00 $0.00 $0.00 $252,207.47 Under/Over Total $147,792.53 $0.00 $250,000.00 $111,111.00 $250,000.00 $758,903.53 Financial Report - Project Funding
Mary Ball Washington Regional Council (GO Virginia Region 6)
Report Period: April 2017 - Present
Report Date: 8/12/2019 FY18 FY18 FY19 FY20 Per Capita Capacity Building Per Capita Per Capita (100% Match) (100% Match) (100% Match) (100% Match) Total Region 6 Allocation Total $640,182.00 $250,000.00 $1,000,000.00 $1,008,621.00 $2,898,803.00 Projects Funded Flexible Office Space Due Diligence $50,000.00 $0.00 $0.00 $0.00 $50,000.00 PamunkeyNet Business Plan $50,000.00 $0.00 $0.00 $0.00 $50,000.00 VASG Planning Grant $49,996.00 $0.00 $0.00 $0.00 $49,996.00 Welding Training Program $130,000.00 $0.00 $0.00 $0.00 $130,000.00 Cybersecurity Certification Program $110,000.00 $0.00 $0.00 $0.00 $110,000.00 Total $389,996.00 $0.00 $0.00 $0.00 $389,996.00 Projects in Pipeline Apprenticeship Network $289,200.00 $0.00 $0.00 $0.00 $289,200.00 Total $289,200.00 $0.00 $0.00 $0.00 $289,200.00 Under/Over Total -$39,014.00 $250,000.00 $1,000,000.00 $1,008,621.00 $2,219,607.00 MINUTES OF THE MEETING OF THE MARY BALL WASHINGTON REGIONAL COUNCIL EXECUTIVE COMMITTEE July 23, 2019 Rappahannock Community College Warsaw, Virginia
MEMBERS PRESENT AND VOTING: Chair - William Beale, Wally Beauchamp, Lisa Hull, Kim McClellan MEMBERS ABSENT: Vice-Chair - Carlton Revere OTHERS IN ATTENDANCE: None STAFF: GWRC – Kate Gibson and Jennifer Morgan, Community Futures – Neal Barber
CALL TO ORDER
Mr. Beale called the meeting to order at 11:05 am with a quorum present.
MAY 17, 2019 MEETING MINUTES APPROVAL
Mr. Beauchamp moved to approve the May 17, 2019 Meeting Minutes and Ms. Hull seconded the motion. The motion passed unanimously.
FINANCIAL REPORT
Ms. Gibson presented the financial report for April 2017-May 2019.
GROWTH AND DIVERSIFICATION PLAN UPDATE REVIEW AND APPROVAL
Mr. Barber presented the updated Growth and Diversification plan to the Executive Committee. Mr. Barber highlighted the Executive Summary of the report, specifically noting the 24 recommended areas of investment strategies, grouped into six categories, as potential project areas for the region. The Executive Committee discussed adopting an affirmative policy related to the use of capacity building funds to develop projects throughout the region. Staff presented their comments and list of edits they asked Fletcher Magnum of Magnum Economics to make to the quantitative analysis section of the plan update. Mrs. McClellan moved to adopt the Growth and Diversification plan update with comments and list of edits presented by staff to be submitted to DHCD for the August 1 deadline. Mr. Beauchamp seconded the motion. The motion passed unanimously.
GROWTH AND DIVERSIFICATION PLAN NEXT STEPS DISCUSSION
The Executive Committee discussed ways to use the Growth and Diversification plan to shape the development of the region. The committee focused on utilizing the 24 strategies outlined in
Page 1 of 2 MINUTES OF THE MEETING OF THE MARY BALL WASHINGTON REGIONAL COUNCIL EXECUTIVE COMMITTEE July 23, 2019 Rappahannock Community College Warsaw, Virginia the Executive Summary, work with regional County Administrators and Boards of Supervisors and other local officials, and develop affirmative strategies to focus project efforts in the region.
PROJECT UPDATES
Ms. Morgan presented to the Executive Committee an update on projects. The Flexible Office Space project has completed work and will present a final report in October. Grant recipients have been administered a new quarterly report template to allow staff to monitor efforts more efficiently. On Thursday July 25th, Delegate Hodges from the Middle Peninsula, a subregion of Region 6, will host a Rural Virginia Coastal Summit that will impact GO Virginia efforts in the region. Ms. Morgan will attend the event to report back to Council.
WEBSITE CHANGES
Ms. Morgan presented to the Executive Committee the new GO Virginia Region 6 website and mailing list. The new website can be found at www.govirginia6.org and interested community members can join the mailing list via the website.
FUTURE MEETINGS
The Executive Committee will meet the 3rd Friday of the month the full Council does not meet. The next meeting will be September 20th at 11 am at the Rappahannock Community College, in Warsaw, VA.
ADJOURNMENT
Being no further business, Mr. Beauchamp moved to adjourn the meeting at 1:03 pm. Ms. Hull seconded the motion, and the motion passed unanimously.
Page 2 of 2
COMMONWEALTH OF VIRGINIA FINANCIAL ASSISTANCE CONTRACT NUMBER 10RC6-20
July 1, 2019 to June 30, 2020
THIS AGREEMENT by and between the COMMONWEALTH OF VIRGINIA, DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (herein called the "Department"), Regional 6 Council (herein called “Regional Council”) and the GEORGE WASHINGTON REGIONAL COMMISSION (herein called the "Organization"), WITNESSETH THAT:
WHEREAS, the Organization has been selected by The Regional Council pursuant to the Virginia Growth and Opportunity Act for the purpose of promoting collaborative planning, economic development, or workforce activities within The Regional Council through data analysis, review of best practices, review and analysis of project proposals, and other duties as determined by the Regional Council; and
WHEREAS, the Organization desires to secure financial support from the Department on behalf of the Regional Council under the terms of the Virginia Growth and Opportunity Act; and
WHEREAS, the Organization has entered into a Memorandum of Understanding (MOU) with The Regional Council outlining their role to act as the fiduciary for the Regional Council; and
WHEREAS, the Department is empowered to provide state financial support to the Organization on behalf of the Regional Council to help them achieve the aforementioned objectives;
NOW, THEREFORE, the parties hereto mutually agree as follows:
COMPENSATION
1. Based upon the Virginia Growth and Opportunity Act and the Appropriation Act of the Commonwealth of Virginia for the 2018-2020 Biennium, as amended, the Department agrees to pay to the Organization for the fiscal year beginning July 1, 2019, and ending June 30, 2020, two hundred and fifty thousand dollars ($250,000) in capacity building funds, subject to the approval of the budget submitted by the Regional Council to the GO Virginia Board and provided that the Organization shall meet the requirements in the GO Virginia financial manual, financial reporting documents, and those listed below.
METHOD OF PAYMENT
2. The Department shall obligate funds after receipt of the MOU with the Regional Council, and any other entities contracted with. Payments will require financial reports to be submitted on time and with proper documentation.
The Organization agrees to draw cash only as needed for its disbursement on a reimbursable basis.
Page 1 of 4
SCOPE OF SERVICES
3. The Support Organization shall furnish to the Department the following items during the term of this Contract, or as specified below:
a. An MOU, submitted no later than October 1st, 2019. This MOU shall include, at a minimum, the following information:
1. A description of each entity included in the MOU
2. The purpose of the MOU
3. The agreed upon roles and responsibilities each organization will be providing to ensure project success. The roles and responsibilities should align with project goals, objectives and outputs;
4. Describe the resources each partner would contribute to the project. This can be a time commitment, in-kind contributions, or grant funds
5. A statement that the MOU is in compliance with the Virginia Growth and Opportunity Act.
6. The MOU must be signed by all partners. Signatories must be officially authorized to sign on behalf of the entity and include title and entity name.
b. A current list of authorized signatories of the Organization, including their full name and title.
c. An Annual Report that includes a description of the activities conducted by the Support Organization during the preceding fiscal year, describing how they met the provision of the Growth and Opportunity Act. This report should be submitted through DHCD’s Centralized Application and Management System (CAMS) under the Reports and Communication tab.
FINANCIAL REQUIREMENTS
4. The Organization must adhere to the GO Virginia Financial Manual and any updates that may occur. Updated manuals will be sent to recipients within five business days.
5. Recording and Documentation of Receipts and Expenditures
a. Funds awarded are to be expended only for the purposes and activities covered by the Organization’s approved project plan and budget. The Organization is required to have accounting procedures that provide for accurate and timely recording of receipt of funds by source of expenditures made from such funds and unexpended balances. These records must contain information pertaining to this award, obligations, unobligated balances, assets, liabilities, receipts and expenditures. Controls must be established which are adequate to ensure that expenditures charged to this award are for allowable purposes. Accounting records must be supported by such source documentation as bank statements, cancelled checks, invoices, paid bills, payrolls, etc.
Page 2 of 4
REQUEST FOR INFORMATION
6. Upon request of the Department, the Organization will promptly, and in all cases within 30 days, provide any information and/or documentation related to the Organization’s use of GO Virginia funds.
AUDIT REQUIREMENTS
7. The Organization shall submit an annual audit report to the Department. Financial statements to be audited shall include a Balance Sheet, Income Statement, Statement of Cash Flows and a Budget to Actual Statement. Financial statements shall be in conformance with generally accepted accounting principles (GAAP) and audits are to be conducted by an Independent Certified Public Accountant (CPA). Audit reports shall be submitted to the Department no later than six months from the close of the Organization’s fiscal year end.
Page 3 of 4
COMMONWEALTH OF VIRGINIA Department of Housing and Community Development
By: ______Erik Johnston, Director
Date: ______
THE REGIONAL COUNCIL
By: ______G. William Beale, Chair
Date: ______
SUPPORT ORGANIZATION
By: ______Linda Millsaps, Executive Director
Date: ______
Page 4 of 4 Mary Ball Washington Regional Council GO Virginia Region 6 www.govirginia6.org
Quarterly Report Status Report April 1, 2019—June 30, 2019 (Quarter 2)
Project Project Start Description of Activities Barriers Staff Action Name Manager Date this Quarter Good Jobs Linda 3/1/2019 • Engaged Berkley • Local EDs Staff engaged Here Millsaps Group as Consultant determined with Grantee to • Held initial meeting needed more rework with local economic time to proposed timeline to fit development officials understand shift in deliverable dates • Worked on completing region. Shifted due to challenges within commuter and meetings to later the region in beginning workforce study for in the year (Sept, work. Project is on track the region Oct, Nov) with new timeline. • Commuter Plan due Oct 1 NN Site, Jerry 4/1/2019 • Completed inventory None On Track Building & Davis of Northern Neck Sites Infrastructure and Buildings Study • Began site creation study in Richmond and Westmoreland Counties • Draft PER for Montross was delivered. Callao’s PER in progress. MPA Liz Povar 7/1/2019 • LEDO confirmed as the • Delays in Staff has Business Site grant advisory defining engaged with Readiness committee preferred sites in grantee to Planning • Initial list of VASCAN the VA Scan ensure that all delays are sites prepared; database due to being mitigated. Once localities contacted to VEDP’s VEDP’s characterization identify additional or prioritization of has commenced, MPA alternative sites; expect sites for their can begin theirs. Staff is to complete program monitoring for update identification by end of • Delay in on characterization. August engaging • Sites owned by MPPAA engineering firm have been identified due to MPA and mapped Board schedule • RFQ developed and approved at MPA Board meeting 7/17/19 Flex Space Jerry 4/16/2018 • All work is completed None On Track Davis and a final report is being drafted. Presentation at R6 October meeting Mary Ball Washington Regional Council GO Virginia Region 6 www.govirginia6.org
Quarterly Report Status Report April 1, 2019—June 30, 2019 (Quarter 2)
Project Project Start Description of Activities Barriers Staff Action Name Manager Date this Quarter PamunkeyNet Liz Povar 4/25/2018 • Identified Legal Delays were caused Staff has Counsel for Business by the research engaged Entity conducted by the with the • Business Consultant MPA in the grantee to ensure identified in July, summer and fall of that the delays contract negotiations 2018, to more fully outlined have not have begun understand issues affected the end • Legal Entity Formed and stakeholders date of the related to business contract. The planning for Indian grantee approved Tribes engaged in a business entity rural broadband in July and have projects. This entered into caused a 4-month contract delay. Second negotiations. Staff slight delay is monitoring to occurred when the ensure a contract MPA board elected is signed. to utilize a two- step process to advertise for the business planning vendor; the MPA first issued a Request for Qualifications, followed by a Request for Proposals. This resulted in a one- month delay. VASG Valerie 7/1/2018 • Completed second None On Track Woodard workgroup meeting on June 12th • Action plan on the resilience economy ecosystem has begun Welding Jerry 7/1/2018 • Training continues None On Track Training Davis • 56 welders trained • 34 credentials awarded • 10 new jobs created
Mary Ball Washington Regional Council GO Virginia Region 6 www.govirginia6.org
Quarterly Report Status Report April 1, 2019—June 30, 2019 (Quarter 2)
Project Project Start Description of Activities Barriers Staff Action Name Manager Date this Quarter Cybersecurity Kimberly 5/1/2019 • 3 potential UMW Late execution of Staff has Certification Young instructors have been contract in quarter has worked with identified delayed some agreed grantee to • Body of knowledge for upon milestones rearrange contract course will go under milestones to meet review 7/30 deliverables. • Kick off meeting Grantee is on track scheduled for August to meet new timeline. GWRC Project Todd 7/1/2019 • First check in with Staff On Track Pipeline Gillingham • Scheduled monthly Development individual meetings (First Wednesday of the Month) NN Project Jerry Davis 7/1/2019 • First check in with Staff On Track Pipeline • Scheduled monthly Development individual meetings (Fourth Thursday of the Month) MPA Project Liz Povar 7/1/2019 • First check in with Staff On Track Pipeline • Scheduled monthly Development individual meetings (Fourth Monday of the Month)
MARY BALL WASHINGTON GO VIRGINIA REGION 6 2019 Growth & Diversification Plan Update Executive Summary
The Mary Ball Washington GO Virginia Region 6 consists of the city of Fredericksburg; and the counties of Caroline, Essex, Gloucester, King & Queen, King George, King William, Lancaster, Mathews, Middlesex, Northumberland, Richmond, Spotsylvania, Stafford, and Westmoreland. The purpose of GO Virginia is to “create more and higher paying jobs through incentivized collaboration, primarily from out-of-state revenue, which diversifies and strengthens regional economies.” In 2017 the Mary Ball Washington Regional Council adopted a Growth and Diversification Plan that outlined a series of investment strategies to accelerate the creation of higher paying jobs in priority industrial clusters. The Mary Ball Washington Regional Council has reviewed and updated the 2017 Growth and Diversification Plan in accordance with the guidelines of the GO Virginia Board.
Region 6 Economic Trends & Drivers • The private sector accounts for a smaller proportion of total employment than Virginia – 76% in Region 6 vs. 82% in Virginia. • Unemployment continued to decline to 3 percent in May 2019. • Employment growth in Region 6 slowed to the statewide trend, and the Fredericksburg area grew at a faster pace than other parts of the region. • Average weekly wages continue to be below the statewide average – $806 in Region 6 vs. $1,113 in Virginia, but wage growth matches the statewide average. • The Professional, Scientific & Technical Services ( 739 jobs); Other Services ( 474 jobs); and Health Care and Social Assistance ( 438 jobs) sectors lead year-over-year employment growth. • 60% of the region’s workers commute to employment outside the region.
Priority Industry Clusters The 2017 Priority Industry Clusters were modified to capture a larger array of marine-related businesses. The updated priority clusters are: • Aquaculture/Seafood/Commercial Fishing/Marine Industries • Distribution/Logistics • Forestry/Wood Products and Paper • Information/Data Centers • Manufacturing • Professional, Scientific and Technical Services
Investment Strategies and Recommendations These are the 24 recommended investment strategies within 6 category groupings (indicated by roman numerals).
I. Product (Sites and Buildings) Strategies: 1) Virginia Business Ready Sites Program – Increase the readiness of available business sites 2) Encourage “data center certification” of additional sites 3) Develop regional business/industrial properties with cost & revenue sharing agreements 4) Develop additional speculative office buildings II. Workforce Development Strategies: 5) Realign training and education programs to meet industry requirements 6) Expand “work-based” learning programs 7) Establish formal partnerships between educational institutions and the Commonwealth Cyber Initiative 8) Create occupational career paths for priority industry clusters 9) Expand regional workforce development and career and technical education training centers III. Entrepreneurship Strategies: 10) Expand youth entrepreneurship programs in K-12 and community colleges 11) Expand the Mary Washington Small Business Development Center programs 12) Establish “Innovation Centers” throughout the region 13) Expand the array of financing resources offered by the Rappahannock Economic Development Corporation 14) Create “Opportunity Zone Funds” 15) Conduct business plan competitions 16) Expand “Participating Intermediary Agreements” with research institutions IV. Business Scale-Up Strategies: 17) Expand the utilization of GENEDGE technical assistance 18) Increase participation in the VEDP Export Assistance Program 19) Develop new product lines in the priority industry clusters V. Broadband Infrastructure Strategies: 20) Implement PamunkeyNet 21) Expand broadband services though “public/private partnerships” VI. Water Based Economy Strategies: 22) Preserve and develop “working waterfronts” 23) Implement the Rural Virginia Coastal Community Enhancement Authority 24) Establish a “Center for Resiliency Innovation”
JULY 31, 2019
GO Virginia Region 6
EMPIRICAL ASSESSMENT ECONOMIC AND LABOR MARKET CONDITIONS
4201 DOMINION BOULEVARD, SUITE 114 GLEN ALLEN, VIRGINIA 23060 804-346-8446 MANGUMECONOMICS.COM
© 2019 Mangum Economics
About Mangum Economics, LLC
Mangum Economics, LLC is a Richmond, Virginia based firm that specializes in producing objective economic, quantitative, and qualitative analysis in support of strategic decision making. Much of our recent work relates to IT & Telecom Infrastructure (data centers, terrestrial and subsea fiber), Renewable Energy, and Economic Development. Examples of typical studies include:
POLICY ANALYSIS Identify the intended and, more importantly, unintended consequences of proposed legislation and other policy initiatives.
ECONOMIC IMPACT ASSESSMENTS AND RETURN ON INVESTMENT ANALYSES Measure the economic contribution that businesses and other enterprises make to their localities.
WORKFORCE ANALYSIS Project the demand for, and supply of, qualified workers.
CLUSTER ANALYSIS Use occupation and industry clusters to illuminate regional workforce and industry strengths and identify connections between the two.
The Project Team
A. Fletcher Mangum, Ph.D. Founder and CEO
David Zorn, Ph.D. Economist
Martina Arel, M.B.A. Researcher and Economic Development Specialist
Region 3 Empirical Report
Table of Contents Executive Summary ...... 2 Regional Economy ...... 2 Economic Drivers ...... 3 Workforce Gaps ...... 3 Forward-Looking Data ...... 4 What has changed and what has not ...... 4 Introduction ...... 5 Economic Profile ...... 5 Employment by Ownership Category ...... 5 Total Private Employment ...... 6 Private Sector Average Weekly Wages ...... 9 Employment by Major Industry ...... 11 Economic Drivers ...... 21 Method...... 21 Caveats ...... 22 Results ...... 23 Workforce Gap Analysis ...... 29 Regional Demand for Trained Workers ...... 29 Regional Supply of Completers ...... 31 Comparing Demand and Supply ...... 31 Caveats ...... 31 Percentage of Regional Need Met ...... 32 Forward-Looking Assessment ...... 38 Talent Development...... 38 Start-Up Companies ...... 38 Scale-Ups ...... 41 Data Appendix ...... 42 Annual Employment Change by Major Industry Sector and Planning District – 2014 to 2018 ...... 42 Cumulative Employment Change by Major Industry Sector and Planning District – 2014 to 2018 ...... 46 Annual Wage Change by Major Industry Sector and Planning District – 2014 to 2018 ...... 50 Cumulative Wage Change by Major Industry Sector and Planning District – 2014 to 2018 ...... 54
Region 3 Empirical Report
Executive Summary
Consistent with the requirements of the GO Virginia initiative, this report provides an empirical assessment of economic and labor market conditions within GO Virginia Region 6. The principal findings from that assessment are as follows:
REGIONAL ECONOMY In recent years, employment and wage growth in GO Virginia Region 6 has been largely consistent with statewide trends. However, there are significant differences in the performance and composition of the economies of the three Planning Districts (PDCs) that comprise Region 6 – George Washington, Middle Peninsula, and Northern Neck. • The private sector accounts for a smaller proportion of total employment in Region 6 than is typical for Virginia. In 2018, private sector employment accounted for 76 percent of total employment in Region 6 as a whole, 76 percent in the George Washington PDC, 78 percent in the Middle Peninsula PDC, and 77 percent in the Northern Neck PDC as compared to 82 percent statewide in Virginia. • Region-wide, total private employment growth in Region 6 was identical to that of the state as a whole over the last five years – 7.4 percent in Region 6 as a whole, 8.1 percent in the George Washington PDC, 5.8 percent in the Middle Peninsula PDC, and 3.6 percent in the Northern Neck PDC as compared to 7.4 percent statewide in Virginia. • Region-wide, private sector average weekly wage growth in Region 6 was a little below the statewide average over the last five years – 9.8 percent in Region 6 as a whole, 9.4 percent in the George Washington PDC, 10.4 percent in the Middle Peninsula PDC, and 12.5 percent in the Northern Neck PDC as compared to 10.1 percent statewide in Virginia. • Private sector average weekly wages in Region 6 are below the statewide average. In 2018, private sector average weekly wages were $806 in Region 6 as a whole, $840 in the George Washington PDC, $682 in the Middle Peninsula PDC, and $713 in the Northern Neck PDC as compared to $1,113 statewide in Virginia. • Over the one year period from 2017 to 2018, the three industry sectors in Region 6 with the largest employment growth were: 1) Professional, Scientific, and Technical Services (up 739 jobs), 2) Other Services (i.e., primarily personal services) (up 474 jobs), and 3) Health Care and Social Assistance (up 438 jobs). While the three industry sectors with the largest employment losses were: 1) Manufacturing (down 289 jobs), 2) Wholesale Trade (down 132 jobs), and 3) Construction (down 96 jobs). • Over the five-year period from 2013 to 2018, the three industry sectors in Region 6 with the largest employment growth were: 1) Accommodation and Food Services (up 1,600 jobs), 2) Transportation and Warehousing (up 1,576 jobs), and 3) Other Services (up 1,461 jobs). While
Region 6 Empirical Report 2
the three industry sectors with the largest employment losses were: 1) Wholesale Trade (down 612 jobs), 2) Information (down 407 jobs), and 3) Utilities (down 28 jobs).
ECONOMIC DRIVERS GO Virginia Region 6 is home to a large and diverse number of high-performing industries. • We assessed the relative economic performance of specific industries within Region 6 using a Composite Economic Performance Index that took into account each industry’s relative employment footprint, short-term and long-term employment growth, short-term and long- term wage growth, industry wage as a proportion of the average wage for the region, proportion of industry output exported out of Region 6, and employment multiplier. • That analysis identified 82 industries within Region 6 that exhibited a Composite Economic Performance Index that was above the median for the region and 41 industries that were performed in the upper quartile.
WORKFORCE GAPS Our “gap analysis” of potential shortfalls in the pipeline of completers graduating from regional post- secondary education programs in GO Virginia Region 6 relative to the occupation-driven demand for trained workers from those programs showed that: • Many of the identified gaps pertained to occupations that typically require a baccalaureate degree, and this is largely attributable to the fact that there is only one four-year degree granting post-secondary education institution in Region 6 – Mary Washington University. • However, in some instances, particularly in “middle-skill” occupations that require a less than a two-year, post-secondary certificate, there were identified gaps that could potentially be problematic: • Automotive Service Technicians and Mechanics • Bus and Truck Mechanics and Diesel Engine Specialists • Dental Assistants • Electrical Power-Line Installers and Repairers • Electricians • Heating, Air Conditioning, and Refrigeration Mechanics • Heavy and Tractor-Trailer Truck Drivers • Industry and Machinery Mechanics • Physical Therapist Assistants • Plumbers, Pipefitters, and Steamfitters
Region 6 Empirical Report 3
FORWARD-LOOKING DATA Our analysis of forward-looking data required by GO Virginia guidelines drew heavily from the TEConomy Partners report, Regional Entrepreneurial Assessment Project. That analysis showed that: • The share of the working-age population with at least a bachelor’s degree in Region 6 grew by 17 percent between 2012 and 2017, which was significantly faster than the 10 percent growth rate for the state as a whole or the 12 percent growth rate for the entire United States. • The rate of new business formation in Region 6 is very close to the state average – 8 percent in 2017 as compared to 9 percent statewide. • Start-up activity differs across Region 6. The area covered by the George Washington PDC has a high concentration of startup employment in Research and Development, Engineering and Technical Services, and Manufacturing. Both the Middle Peninsula and Northern Neck PDCs have high concentrations of startup employment in Agriculture, Food Processing, Natural Resources, and Finished Products. • Most patents issued in Region 6 are to government organizations.
WHAT HAS CHANGED AND WHAT HAS NOT Comparing this update to our 2017 analysis performed as part of GO Virginia Region 6’s original Growth and Diversification Plan shows that: • Where employment growth in Region 6 was exceeding the statewide trend in our 2017 analysis, it has since fallen to the statewide trend and may be decelerating below it. • Where employment growth in each of Region 6’s three PDCs was accelerating and converging in our 2017 analysis, it is now decelerating and diverging. • Where wage growth in Region 6 was exceeding the statewide trend in our 2017 analysis, that gap has since closed. • Where the Transportation and Warehousing; Administrative Support and Waste Management; and Construction sectors led employment growth in our 2017 analysis, now the Professional, Scientific, and Technical Services; Other Services; and Health Care and Social Assistance sectors lead employment growth. • The economic driver industries identified in this update are similar and still generally support the target industry clusters identified two years ago. • As in our 2017 analysis, the most binding workforce gaps in GO Virginia Region 6 are still in Middle Skill occupations.
Region 6 Empirical Report 4
Introduction
Consistent with the requirements of the GO Virginia initiative, this report provides an updated assessment of economic and labor market conditions within GO Virginia Region 6. Region 6 is comprised of the city of Fredericksburg; and the counties of Caroline, Essex, Gloucester, King and Queen, King George, King William, Lancaster, Mathews, Middlesex, Northumberland, Richmond, Spotsylvania, Stafford, and Westmoreland. Region 6 is consistent with the service areas of the George Washington, Middle Peninsula, and Northern Neck Planning District Commissions (PDCs).
This report was commissioned by GO Virginia Region 6 and produced by Mangum Economics.
Economic Profile
In this section, we provide a context for the analysis to follow by reviewing recent economic trends within GO Virginia Region 6, and the three Planning Districts that comprise Region 6 (George Washington PDC, Middle Peninsula PDC, and Northern Neck PDC).1
EMPLOYMENT BY OWNERSHIP CATEGORY Figure 1 depicts employment by ownership category in Virginia, GO Virginia Region 6, and the three Planning Districts that are encompassed by Region 6, in 2018. As the figure depicts, while in Virginia overall private sector employment accounted for 82 percent of total employment, in Region 6 overall that figure was 76 percent. While at the PDC level, private sector employment accounted for • 76 percent of total employment in the George Washington PDC, • 78 percent of total employment in the Middle Peninsula PDC, and • 77 percent of total employment in the Northern Neck PDC.
These below-average percentages of private sector employment are generally attributable to the higher percentage of local government employment in Region 6, where local government comprises 14 percent of total employment as compared to 10 percent at the statewide level (at the PDC level, the figures are 13 percent in the George Washington PDC, 17 percent in the Middle Peninsula PDC, and 16 percent in the Northern Neck PDC). The region also has a higher percentage of federal government employment. As a percentage of total employment, federal employment is
1 The George Washington PDC encompasses the city of Fredericksburg and the counties of Caroline, King George, Spotsylvania, Stafford. The Middle Peninsula PDC encompasses the counties of Essex, Gloucester, King and Queen, King William, Mathews, and Middlesex. The Northern Neck PDC encompasses the counties of Lancaster, Northumberland, Richmond, and Westmoreland. These PDC service areas closely match that of GO Virginia Region 3, but they do not perfectly overlap. Franklin County is included in the West Piedmont PDC, but it is not part of Region 3. Likewise, Cumberland County and Nottoway County are part of Region 3, but they are not included in either of the three PDCs.
Region 6 Empirical Report 5
• 7 percent in Region 6 • 5 percent in Virginia, statewide, • 9 percent in the George Washington PDC, • 1 percent in the Middle Peninsula PDC, and • 1 percent in the Northern Neck PDC.
Figure 1: Employment by Ownership Category – 20182
100% 179 143 179,661 10,788 10,466 928 811 146,164 90% 4,359 2,620 379,272 3,984 2,102 22,512 16,426 80%
70%
60%
50%
40% 3,186,915 121,746 93,322 18,113 10,311
30%
20%
10%
0% Virginia Region 3 George Washington Middle Peninsula Northern Neck
Private Local Govt. State Govt. Federal Govt.
Consistent with the GO Virginia initiative’s focus on private sector development, in the remainder of this section we will focus exclusively on private sector employment and wages.
TOTAL PRIVATE EMPLOYMENT Figure 2 provides data on total private employment trends in GO Virginia Region 6, and the three Planning Districts that it encompasses for the period from 2014 through 2018. Overall this five-year period, Region 6 experienced an increase of 8,386 jobs, or 7.4 percent growth in total private employment. This is identical to the 7.4 percent growth in total private employment experienced at the statewide level over this same period.
2 Source: Virginia Employment Commission.
Region 6 Empirical Report 6
Figure 2: Total Private Employment in GO Virginia Region 6 and Planning Districts – 2014 to 20183
140,000 121,746 118,421 120,334 120,000 113,360 115,727
100,000 90,326 92,076 93,322 86,297 88,222 80,000
60,000
40,000
17,112 17,419 17,803 17,998 18,113 20,000 9,951 10,086 10,292 10,260 10,311
0
Region 6 George Washington Middle Peninsula Northern Neck
To control for seasonality and provide a point of reference, Figures 3 and 4 compare the annual change in total private employment in Region 6 and the three Planning Districts that it encompasses to that of the state of Virginia as a whole over the same five year period. Any point above the zero line in this graph indicates annual employment growth, while any point below the zero line indicates annual employment decline. As these data indicate, annual private employment growth in the Middle Peninsula and Northern Neck PDCs tracked below the statewide norm throughout the period in every year but 2016, while annual private employment growth the George Washington PDC exceeded the statewide norm in every year but 2015 and 2018.
As of 2018, annual private employment growth was: • 1.5 percent in Virginia statewide, • 1.2 percent in Region 6 overall, • 1.4 percent in the George Washington PDC, • 0.6 percent in the Middle Peninsula PDC, and • 0.5 percent in the Northern Neck PDC.
3 Source: Virginia Employment Commission.
Region 6 Empirical Report 7
Figure 3: Annual Change in Total Private Employment in GO Virginia Region 6 – 2014 to 20184
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
VA Region 6
Figure 4: Annual Change in Total Private Employment in GO Virginia Region 6 by PDC – 2014 to 20185
3% 3% 2% 2% 1% 1% 0% -1% -1% -2% -2%
VA George Washington Middle Peninsula Northern Neck
4 Source: Virginia Employment Commission. 5 Source: Virginia Employment Commission.
Region 6 Empirical Report 8
Finally, Figure 5 depicts the cumulative annual growth in total private employment in Region 6 and the three Planning Districts that it encompasses between 2014 and 2018. As these data show, where cumulative annual total private employment growth in the Middle Peninsula and Northern Neck PDCs generally underperformed the statewide norm over the period, cumulative annual total private employment growth in the George Washington PDC generally outperformed the statewide norm.
For the period as a whole: • Virginia experienced a 7.4 percent cumulative increase in total private employment, • Region 6 overall also experienced a 7.4 percent increase, • the George Washington PDC experienced an 8.1 percent increase, • the Middle Peninsula PDC experienced a 5.8 percent increase, and • the Northern Neck PDC experienced a 3.6 percent increase.
Figure 5: Cumulative Growth in Total Private Employment in GO Virginia Region 6 and Planning Districts – 2014 to 20186
9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
VA Region 6 George Washington Middle Peninsula Northern Neck
PRIVATE SECTOR AVERAGE WEEKLY WAGES Figure 6 provides data on trends in private sector average weekly wages in GO Virginia Region 6, and the three Planning Districts that it encompasses for the period from 2014 through 2018. While Figure 7 depicts the cumulative growth in private-sector average weekly wages in each geography between 2014 and 2018 on an annual basis (unadjusted for inflation).
6 Source: Virginia Employment Commission.
Region 6 Empirical Report 9
Figure 6: Private Average Weekly Wages in GO Virginia Region 6 and Planning Districts – 2014 to 20187
900 $840 $813 $806 $784 $788 $780 800 $768 $749 $756 $734 $713 $684 $682 700 $647 $647$664 $665 $618$634 $632 600 500 400 300 200 100 0
Region 6 George Washington Middle Peninsula Northern Neck
Figure 7: Cumulative Nominal Growth in Private Average Weekly Wages in GO Virginia Region 6 and Planning Districts – 2014 to 20188
14%
12%
10%
8%
6%
4%
2%
0%
VA Region 6 George Washington Middle Peninsula Northern Neck
7 Source: Virginia Employment Commission. 8 Source: Virginia Employment Commission.
Region 6 Empirical Report 10
As these data show, over this period private sector average weekly wages (unadjusted for inflation) increased by • 10.1 percent statewide in Virginia, • 9.8 percent in Region 6 overall, • 9.4 percent in the George Washington PDC, • 10.4 percent in the Middle Peninsula PDC, and • 12.5 percent in the Northern Neck PDC.
EMPLOYMENT BY MAJOR INDUSTRY In this portion of the section, we provide a drill-down for employment and wages by major industry sector in GO Virginia Region 6 and the three Planning Districts it encompasses. As shown in Figure 8, in 2018 the three largest industry sectors in Region 6 were: 1) Retail Trade (22,705 jobs), 2) Health Care and Social Assistance (19,687 jobs), and 3) Accommodation and Food Services (16,788 jobs).
Figure 9 provides a similar breakdown by PDC. In 2018 the three largest industry sectors in the George Washington PDC were: 1) Retail Trade (17,137 jobs), 2) Health Care and Social Assistance (14,868 jobs), and 3) Accommodation and Food Service (13,381 jobs). In the Middle Peninsula PDC, the three largest industry sectors that year were: 1) Retail Trade (3,919 jobs), 2) Health Care and Social Assistance (3,091 jobs), and 3) Accommodation and Food Services (2,300 jobs). While in the Northern Neck PDC, the three largest industry sectors were: 1) Health Care and Social Assistance (1,728 jobs), 2) Retail Trade (1,649 jobs), and 3) Manufacturing (1,384 jobs).
Figures 10 and 11 provide similar data for average weekly wages in 2018. As shown in Figure 10, in 2018 the three highest paying industry sectors in Region 6 were: 1) Utilities ($1,872 per week), 2) Professional, Scientific, and Technical Services ($1,575 per week), and 3) Finance and Insurance ($1,184 per week).
Figure 11 provides the same rankings by PDC. In 2018 the three highest paying sectors in the George Washington PDC were: 1) Utilities ($1,924 per week), 2) Professional, Scientific, and Technical Services ($1,643 per week), and 3) Finance and Insurance ($1,198 per week). In the Middle Peninsula PDC, the three highest paying industry sectors that year were: 1) Manufacturing ($1,098 per week), 2) Transportation and Warehousing ($1,009 per week), and 3) Professional, Scientific, and Technical Services ($968 per week). While in the Northern Neck PDC, the three highest paying industry sectors were: 1) Utilities ($1,704 per week), 2) Finance and Insurance ($1,245 per week), and 3) Professional, Scientific, and Technical Services ($1,062 per week).
Region 6 Empirical Report 11
Figure 8: Private Employment by Major Industry Sector in Region 6 – 20189
Retail Trade 22,705
Health Care and Social Assistance 19,687
Accommodation and Food Services 16,788
Professional, Scientific, and Technical Services 10,080
Finance and Insurance 8,051
Construction 7,880
Other Services (except Public Administration) 6,782
Manufacturing 5,500
Transportation and Warehousing 4,609 Region 6
Wholesale Trade 3,715
Arts, Entertainment, and Recreation 2,048
Real Estate and Rental and Leasing 1,903
Educational Services 1,711
Information 1,119
Agriculture, Forestry, Fishing and Hunting 1,053
Utilities 390
Mining, Quarrying, and Oil and Gas Extraction 187
0 10,000 20,000 30,000
9 Source: Virginia Employment Commission.
Region 6 Empirical Report 12
Figure 9: Private Employment by Major Industry Sector in Region 6 by PDC – 201810
17,137 Retail Trade 3,919 1,649 14,868 Health Care and Social Assistance 3,091 1,728 13,381 Accommodation and Food Services 2,300 1,107 9,012 Professional, Scientific, and Technical Services 660 408 7,109 Finance and Insurance 509 433 5,702 Construction 1,360 818 George 5,106 Other Services (except Public Administration) 1,024 Washington 652 3,650 Transportation and Warehousing 763 196 Middle 2,767 Peninsula Wholesale Trade 662 286 2,514 Manufacturing 1,602 1,384 Northern Neck 1,590 Real Estate and Rental and Leasing 193 120 1,508 Arts, Entertainment, and Recreation 327 213 1,440 Educational Services 96 175 840 Information 159 120 297 Utilities 93 276 Agriculture, Forestry, Fishing and Hunting 362 415 118 Mining, Quarrying, and Oil and Gas Extraction 69
0 10,000 20,000
10 Source: Virginia Employment Commission.
Region 6 Empirical Report 13
Figure 10: Private Average Weekly Wages by Major Industry Sector in Region 6 – 201811
Utilities $1,872
Professional, Scientific, and Technical Services $1,575
Finance and Insurance $1,184
Mining, Quarrying, and Oil and Gas Extraction $1,047
Wholesale Trade $1,045
Information $1,027
Educational Services $988
Manufacturing $977
Transportation and Warehousing $929 Region 6
Construction $922
Health Care and Social Assistance $879
Agriculture, Forestry, Fishing and Hunting $825
Real Estate and Rental and Leasing $761
Other Services (except Public Administration) $551
Retail Trade $538
Arts, Entertainment, and Recreation $354
Accommodation and Food Services $329
0 500 1,000 1,500 2,000
11 Source: Virginia Employment Commission.
Region 6 Empirical Report 14
Figure 11: Private Average Weekly Wages by Major Industry Sector in Region 6 by PDC – 201812
$1,924 Utilities $1,704 $1,643 Professional, Scientific, and Technical Services $968 $1,062 $1,198 Finance and Insurance $942 $1,245 $1,180 Information $472 $690 $1,116 Wholesale Trade $859 $795 $1,107 Mining, Quarrying, and Oil and Gas Extraction $944 George $1,051 Educational Services $530 Washington $724 $953 Construction $819 $873 Middle $926 Peninsula Transportation and Warehousing $1,009 $671 $920 Health Care and Social Assistance $800 $672 Northern Neck $911 Manufacturing $1,098 $955 $791 Real Estate and Rental and Leasing $651 $533 $667 Agriculture, Forestry, Fishing and Hunting $737 $1,008 $571 Other Services (except Public Administration) $479 $507 $555 Retail Trade $496 $461 $333 Accommodation and Food Services $295 $345 $321 Arts, Entertainment, and Recreation $390 $535
0 1,000 2,000 3,000
12 Source: Virginia Employment Commission.
Region 6 Empirical Report 15
Finally, Figures 12 through 15 depict one-year (2017 to 2018) and five-year (2013 to 2018) employment changes in Region 6 and the three Planning Districts it encompasses. As shown in Figure 12, over the one year period between 2017 and 2018 the three industry sectors in Region 6 with the largest employment growth were: 1) Professional, Scientific, and Technical Services (up 739 jobs), 2) Other Services (up 474 jobs), and 3) Health Care and Social Assistance (up 438 jobs). While at the other end of the spectrum, the three industry sectors in Region 6 with the largest employment losses between 2017 and 2018 were: 1) Manufacturing (down 289 jobs), 2) Wholesale Trade (down 132 jobs), and 3) Construction (down 96 jobs). Figure 13 provides similar data for one-year employment growth at a Planning District level.
As shown in Figure 14, over the five year period between 2013 and 2018 the three industry sectors in Region 6 with the largest employment growth were: 1) Accommodation and Food Services (up 1,600 jobs), 2) Transportation and Warehousing (up 1,576 jobs), and 3) Other Services (up 1,461 jobs). While at the other end of the spectrum, the three industry sectors in Region 6 with the largest employment losses between 2013 and 2018 were: 1) Wholesale Trade (down 612 jobs), 2) Information (down 407 jobs), and 3) Utilities (down 28 jobs). Figure 15 provides similar data for five-year employment growth at a Planning District level.
Region 6 Empirical Report 16
Figure 12: One Year Change in Private Employment by Major Industry Sector in Region 6 (2017 to 2018)13
Professional, Scientific, and Technical Services 739
Other Services (except Public Administration) 474
Health Care and Social Assistance 438
Accommodation and Food Services 288
Retail Trade 244
Finance and Insurance 216
Real Estate and Rental and Leasing 65
Agriculture, Forestry, Fishing and Hunting 48
Arts, Entertainment, and Recreation 17 Region 6
Mining, Quarrying, and Oil and Gas Extraction 6
Educational Services -2
Transportation and Warehousing -26
Information -31
Utilities -85
Construction -96
Wholesale Trade -132
Manufacturing -289
-600 -400 -200 0 200 400 600 800
13 Source: Virginia Employment Commission.
Region 6 Empirical Report 17
Figure 13: One Year Change in Private Employment by Major Industry Sector in Region 6 by PDC (2017 to 2018)14
710 Professional, Scientific, and Technical Services 6 23 390 Health Care and Social Assistance -22 70 368 Other Services (except Public Administration) 77 29 262 Retail Trade 63 -81 218 Finance and Insurance 2 -4 161 Accommodation and Food Services 119 8 George 55 Real Estate and Rental and Leasing -7 Washington 17 5 Mining, Quarrying, and Oil and Gas Extraction 1 Middle -3 Peninsula Educational Services -1 2 -12 Utilities -1 Northern Neck -22 Agriculture, Forestry, Fishing and Hunting -12 82 -25 Information -4 -2 -39 Transportation and Warehousing 19 -6 -55 Arts, Entertainment, and Recreation 91 -19 -96 Wholesale Trade -40 4 -104 Manufacturing -139 -46 -178 Construction 73 9
-500 0 500 1,000
14 Source: Virginia Employment Commission.
Region 6 Empirical Report 18
Figure 14: Five Year Change in Private Employment by Major Industry Sector in Region 6 (2013 to 2018)15
Accommodation and Food Services 1,600
Transportation and Warehousing 1,576
Other Services (except Public Administration) 1,461
Professional, Scientific, and Technical Services 1,146
Construction 752
Retail Trade 740
Health Care and Social Assistance 697
Finance and Insurance 606
Educational Services 330 Region 6
Real Estate and Rental and Leasing 268
Arts, Entertainment, and Recreation 83
Agriculture, Forestry, Fishing and Hunting 71
Manufacturing 47
Mining, Quarrying, and Oil and Gas Extraction 20
Utilities -28
Information -407
Wholesale Trade -612
-1,000 0 1,000 2,000
15 Source: Virginia Employment Commission.
Region 6 Empirical Report 19
Figure 15: Five Year Change in Private Employment by Major Industry Sector in Region 6 by PDC (2013 to 2018)16
1,310 Accommodation and Food Services 256 34 1,212 Other Services (except Public Administration) 172 77 1,161 Professional, Scientific, and Technical Services 52 -67 1,081 Transportation and Warehousing 513 -18 726 Finance and Insurance -86 -34 654 Retail Trade 113 -27 George 569 Health Care and Social Assistance 83 Washington 45 501 Construction 167 84 Middle 330 Peninsula Educational Services -21 21 325 Real Estate and Rental and Leasing -56 -1 Northern Neck 140 Arts, Entertainment, and Recreation -20 -37 136 Manufacturing -234 145 15 Mining, Quarrying, and Oil and Gas Extraction 5
12 Agriculture, Forestry, Fishing and Hunting 0 59 -40 Utilities 12 -385 Information -3 -19 -608 Wholesale Trade 37 -41
-1,000 0 1,000 2,000
16 Source: Virginia Employment Commission.
Region 6 Empirical Report 20
Economic Drivers
In this section, we identify those industries that make an above average contribution to the growth of GO Virginia Region 6’s economy and the economies of the three Planning Districts that comprise Region 6.
METHOD To identify these economic driver industries, we employ a composite economic performance index that is based on eight individual metrics. These metrics were selected based on GO Virginia’s prioritization of fast-growing, export industries, that offer high wages, and have a significant economic impact. Each metric, and the weight that it is given in the composite economic performance index is listed below. 1. Employment Location Quotient or “LQ” (weight = 11 percent): This metric measures the relative employment footprint of an industry.17 If it is greater than one, that indicates that the industry has a larger employment footprint in the area than one would expect based on the statewide norm. If it is less than one, the industry has a smaller employment footprint than one would expect based on the statewide norm. 2. Short-Term Employment Growth or “ST Emp.” (weight = 11 percent): This metric measures one- year employment growth in an industry.18 3. Long-Term Employment Growth or “LT Emp.” (weight = 11 percent): This metric measures five- year employment growth in an industry.19 4. Short-Term Wage Growth or “ST Wage” (weight = 11 percent): This metric measures one-year wage growth in an industry.20 5. Long-Term Wage Growth or “LT Wage” (weight = 11 percent): This metric measures five-year wage growth in an industry.21
17 More specifically, the employment location quotient is calculated as: LQ = ((area private employment in industry i)/(total area private employment))/((statewide private employment in industry i)/(total statewide private employment)). Data Source: derived from Virginia Employment Commission data. 18 More specifically, short-term employment growth is calculated as: ST emp = ((2018 area private employment in industry i) – (2017 area private employment in industry i)). Data Source: derived from Virginia Employment Commission data. 19 More specifically, long-term employment growth is calculated as: LT emp = ((2018 area private employment in industry i) – (2013 area private employment in industry i)). Data Source: derived from Virginia Employment Commission data. 20 More specifically, short-term wage growth is calculated as: ST wage = ((2018 area private weekly wage in industry i) – (2017 area private weekly wage in industry i)). Data Source: derived from Virginia Employment Commission data. 21 More specifically, long-term wage growth is calculated as: LT wage = ((2018 area private weekly wage in industry i) – (2013 area private weekly wage in industry i)). Data Source: derived from Virginia Employment Commission data.
Region 6 Empirical Report 21
6. Relative Wage or “Rel. Wage” (weight = 11 percent): This metric measures the wage in an industry relative to the average wage across all industries.22 If it is greater than one, the wage in the industry is higher than the average wage for the area. If it is less than one, the wage in the industry is lower than the average wage for the area. 7. Industry Exports or “Exports” (weight = 17 percent): This metric measures the proportion of an industry’s output that is exported outside of Region 6.23 8. Type I Multiplier or “Type I Mult.” (weight = 17 percent): This metric measures the direct and indirect employment impact the industry has on Region 6. It is an indication of the depth and breadth of an industry’s economic roots within an area. The larger the metric, the larger the proportion of the industry’s operational expenditures that go to suppliers and employees within the area, so the smaller the leakage of dollars outside of the area.24
Each metric was produced for all industries at a four-digit NAICS level in GO Virginia Region 6.25 Each industry is ranked on each metric relative to all other industries. Those rankings are then weighted and summed to produce the composite economic performance index for that industry. The larger the index, the higher the economic performance of that industry relative to all other industries within the study area.
CAVEATS It is important to point out that the employment and wage data used in this section are taken from the Virginia Employment Commission’s Quarterly Census of Employment and Wages. Although these data provide the most comprehensive look at regional labor market data available, they are subject to limitations. Because these data are based on unemployment insurance reports filed by employers, they only reflect “covered” employment – employment that is covered by unemployment insurance. As a result, certain categories of employment (e.g., self-employed) and employment in certain industries (e.g., agriculture) may be under-reported. In addition, the Virginia Employment Commission is required to suppress data when disclosure of those data could be used to identify employment and wages in a specific firm. This generally occurs when there is only one major employer in that industry within the region (e.g., the RockTenn paper mill in West Point).
22 More specifically, relative wage is calculated as: Rel. wage = (2018 private weekly wage in industry i)/(2018 area private weekly wage across all industries). Data Source: derived from Virginia Employment Commission data. 23 More specifically, industry exports is calculated as: Exports = (2016 industry output exported outside of Region 6)/(2016 total industry output produced in Region 6). Data Source: derived from IMPLAN data. 24 Data Source: IMPLAN. 25 NAICS stands for North American Industry Code System. It is a coding taxonomy that the U.S. Bureau of Labor Statistics uses to classify industries. It is a six-digit code, where the first two digits denote major industry sectors such as Manufacturing or Retail Trade. Going beyond two digits increases the granularity of the classification.
Region 6 Empirical Report 22
RESULTS Table 1 provides a listing of the economic drivers in GO Virginia Region 6. In addition, economic driver industries that are within one of GO Virginia Region 6’s six identified target industry clusters are identified by cluster number and highlighted in yellow: 1. Cluster 1: Seafood, Fishing, and Aquaculture 2. Cluster 2: Forestry, Wood Products, and Paper 3. Cluster 3: Distribution/Logistics 4. Cluster 4: Professional, Technical, and Scientific Services 5. Cluster 5: Manufacturing 6. Cluster 6: Information and Data Centers
Economic drivers are defined as industries that demonstrated a composite economic performance index that was above the median for the study area. Each composite economic performance index was calculated in accordance with the method described above. Bolded entries in Table 1 rank in the first quartile for performance (i.e., top 25 percent).
Region 6 Empirical Report 23
Table 1: Region 6 – Industries Demonstrating Above Median Economic Performance
ST LT Rel. Type 1 P- Industry Cluster LQ ST Emp LT Emp. Exports Wage Wage Wage Mult. INDEX Remediation and Other Waste 2.78 45 171 7.6% 24.7% 1.03 0.14 1.37 125.4 Management Services Architectural, Engineering, and 4 0.97 226 477 3.5% 7.8% 2.09 0.22 1.36 121.1 Related Services Specialized Freight Trucking 3 1.95 2 191 6.5% 13.3% 1.17 0.27 1.39 121.0 Sawmills and Wood Preservation 2 4.22 -37 97 5.5% 23.8% 1.03 0.83 1.45 119.0 Other Professional, Scientific, and 4 1.10 1 139 11.1% 35.1% 1.16 0.19 1.29 111.5 Technical Services Independent Artists, Writers, and 0.97 5 9 6.0% 83.2% 1.35 0.11 1.49 111.4 Performers Oilseed and Grain Farming 8.46 -10 -6 5.1% 15.3% 1.00 0.90 1.48 110.5 RV (Recreational Vehicle) Parks and 2.69 34 29 2.6% 19.6% 0.56 0.99 1.31 110.0 Recreational Camps Support Activities for Road 3 2.25 23 62 3.8% 12.5% 1.10 0.10 1.38 109.2 Transportation Other Financial Investment Activities 0.21 5 26 7.1% 31.2% 2.80 0.09 1.64 109.1 Gasoline Stations 2.03 51 192 3.8% 11.3% 0.50 0.22 1.31 107.3 Couriers and Express Delivery Services 3 0.84 24 79 4.1% 10.6% 1.04 0.27 1.35 106.0 Lumber and Other Construction 0.68 12 12 11.7% 24.9% 1.47 0.14 1.30 105.9 Materials Merchant Wholesalers Management, Scientific, and Technical 4 0.71 233 324 2.4% 1.2% 2.27 0.42 1.26 103.8 Consulting Services Waste Collection 1.21 13 25 0.3% 15.7% 1.23 0.14 1.37 103.5 Management of Companies and 0.62 -14 11 6.8% 15.7% 1.68 0.18 1.37 102.2 Enterprises Data Processing, Hosting, and Related 6 0.25 13 -7 17.6% 14.4% 1.32 0.13 1.52 102.1 Services Other Information Services 6 0.40 -20 -30 7.0% 56.5% 1.78 0.22 1.40 102.0 General Freight Trucking 3 1.02 -68 97 5.6% 11.3% 1.08 0.27 1.39 101.6
Region 6 Empirical Report 24
Table 1: Region 6 – Industries Demonstrating Above Median Economic Performance
ST LT Rel. Type 1 P- Industry Cluster LQ ST Emp LT Emp. Exports Wage Wage Wage Mult. INDEX Miscellaneous Durable Goods 1.15 11 74 5.4% 15.2% 1.00 0.14 1.30 101.0 Merchant Wholesalers Warehousing and Storage 3 1.32 -2 762 3.7% 1.0% 1.23 0.39 1.29 100.4 Services to Buildings and Dwellings 0.95 62 544 4.9% 26.0% 0.67 0.14 1.23 99.7 General Merchandise Stores. 2.00 -25 2981 4.0% 27.5% 0.62 0.11 1.32 99.6 Direct Selling Establishments 1.66 -13 -1 11.9% 19.3% 1.15 0.03 1.46 99.6 Cement and Concrete Product 5 1.60 17 10 4.0% 20.1% 1.30 0.66 0.54 98.8 Manufacturing Office Administrative Services 0.37 56 4 7.7% 31.8% 1.38 0.02 1.33 98.4 Waste Treatment and Disposal 1.24 5 1 0.4% 8.4% 1.89 0.14 1.37 97.9 Furniture and Home Furnishing 0.07 -1 -1 21.9% 171.1% 1.62 0.14 1.30 97.6 Merchant Wholesalers Petroleum and Petroleum Products 1.20 -3 14 3.4% 21.3% 1.31 0.14 1.30 97.3 Merchant Wholesalers Electronic Shopping and Mail-Order 0.20 -5 32 8.3% 112.7% 1.26 0.03 1.46 97.0 Houses Traveler Accommodation 0.73 31 -9 3.9% 26.2% 0.51 0.96 1.30 96.7 Business Support Services 0.19 181 -203 79.9% 38.9% 1.12 0.09 1.33 96.7 Inland Water Transportation 3 3.43 -2 6 -5.7% -19.9% 1.32 0.61 1.45 96.4 Building Material and Supplies Dealers 2.01 202 306 -1.8% 5.0% 0.71 0.09 1.31 96.4 Computer Systems Design and Related 4 0.49 120 314 0.7% 2.3% 2.27 0.22 1.21 95.8 Services Automotive Repair and Maintenance 1.87 73 304 2.7% 12.5% 0.96 0.13 1.18 94.7 Aquaculture 1 4.08 -1 32 1.7% 34.9% 0.94 0.17 1.20 93.3 Agencies, Brokerages, and Other 0.52 10 45 2.9% 21.8% 1.11 0.00 1.51 93.1 Insurance Related Activities Offices of Physicians 1.36 125 289 2.3% 2.0% 1.84 0.01 1.25 93.1
Region 6 Empirical Report 25
Table 1: Region 6 – Industries Demonstrating Above Median Economic Performance
ST LT Rel. Type 1 P- Industry Cluster LQ ST Emp LT Emp. Exports Wage Wage Wage Mult. INDEX Hardware, and Plumbing and Heating Equipment and Supplies Merchant 0.53 9 20 4.8% 11.8% 1.40 0.14 1.30 93.0 Wholesale Business Schools and Computer and 3.40 11 269 -5.3% 4.3% 2.85 0.14 1.20 92.9 Management Training Insurance Carriers 0.13 -2 10 1.2% 14.4% 1.40 0.57 1.37 92.0 Securities and Commodity Contracts 1.02 12 56 3.6% 16.5% 4.76 0.09 1.19 91.8 Intermediation and Brokerage Logging 2 2.83 -1 18 0.6% 18.5% 1.10 0.22 1.20 91.6 Outpatient Care Centers 1.17 28 284 0.7% 18.7% 1.31 0.00 1.28 91.5 Charter Bus Industry 3 2.14 62 62 0.97 0.11 1.38 91.4 Other Miscellaneous Manufacturing 5 0.51 4 2 21.6% 43.8% 1.12 0.89 0.35 90.9 Household and Institutional Furniture 5 0.46 16 33 4.1% 21.2% 1.05 0.98 0.51 90.4 and Kitchen Cabinet Manufacturing Professional and Commercial Equipment and Supplies Merchant 1.00 40 -26 -1.9% 11.9% 1.60 0.14 1.30 90.3 Wholesalers Other Support Services 0.16 -59 -24 102.6% 104.2% 1.76 0.03 1.48 90.2 Greenhouse, Nursery, and Floriculture 1.71 -29 1 4.9% 26.7% 0.81 0.97 1.20 90.0 Production Personal and Household Goods Repair 2.28 10 55 1.5% 19.0% 0.86 0.16 1.15 89.7 and Maintenance Lessors of Real Estate 1.18 40 224 11.0% -2.7% 0.80 0.00 1.31 89.6 Household Appliances and Electrical and Electronic Goods Merchant 0.20 -1 -16 19.9% 16.0% 1.32 0.14 1.30 88.4 Wholesale Architectural and Structural Metals 5 0.38 -6 40 6.5% 15.1% 1.43 0.97 0.79 87.3 Manufacturing
Region 6 Empirical Report 26
Table 1: Region 6 – Industries Demonstrating Above Median Economic Performance
ST LT Rel. Type 1 P- Industry Cluster LQ ST Emp LT Emp. Exports Wage Wage Wage Mult. INDEX Motor Vehicle and Motor Vehicle Parts 1.21 -6 -198 -3.2% 104.6% 1.53 0.14 1.30 86.9 and Supplies Merchant Wholesalers Other Personal Services 0.73 29 94 16.3% 24.1% 0.56 0.00 1.27 86.5 Offices of Real Estate Agents and 1.07 38 92 -2.1% 20.4% 0.97 0.00 1.31 86.4 Brokers Jewelry, Luggage, and Leather Goods 1.32 13 -5 9.0% 21.1% 0.69 0.00 1.35 86.1 Stores Personal Care Services 1.42 78 190 3.0% 24.8% 0.59 0.00 1.24 86.0 Radio and Television Broadcasting 6 0.42 8 -5 6.7% 7.6% 1.11 0.05 1.43 85.8 Other General Purpose Machinery 5 0.01 -22 -20 34.0% 60.3% 1.71 1.00 0.43 85.2 Manufacturing Nonmetallic Mineral Mining and 1.98 6 20 -2.1% 12.9% 1.30 0.28 0.39 84.7 Quarrying Continuing Care Retirement Communities and Assisted Living 1.17 74 341 -1.0% 7.8% 0.63 0.10 1.25 84.7 Facilities for t Lawn and Garden Equipment and 1.88 26 54 -1.7% 0.7% 0.58 0.09 1.31 84.4 Supplies Stores Automotive Parts, Accessories, and Tire 1.80 10 100 2.3% 4.8% 0.78 0.14 1.18 83.5 Stores Home Furnishings Stores 1.36 18 55 -1.1% 9.9% 1.00 0.07 1.27 83.3 Electronics and Appliance Stores 1.20 -45 21 4.2% 32.4% 0.93 0.01 1.32 83.1 Travel Arrangement and Reservation 0.27 0 -5 5.6% 15.0% 1.00 0.03 1.49 82.6 Services Offices of Other Health Practitioners 1.33 161 253 2.7% 16.4% 1.02 0.00 1.17 82.3 Other Fabricated Metal Product 5 0.80 -11 58 8.9% 1.57 0.97 0.43 82.2 Manufacturing Offices of Dentists 1.24 89 129 3.4% 6.8% 1.27 0.00 1.15 81.6
Region 6 Empirical Report 27
Table 1: Region 6 – Industries Demonstrating Above Median Economic Performance
ST LT Rel. Type 1 P- Industry Cluster LQ ST Emp LT Emp. Exports Wage Wage Wage Mult. INDEX Drugs and Druggists' Sundries 0.07 0 -5 14.4% -36.1% 2.20 0.14 1.30 81.3 Merchant Wholesalers Restaurants and Other Eating Places 1.34 176 1314 2.1% 14.5% 0.39 0.00 1.24 81.1 Automotive Equipment Rental and 0.80 -10 69 11.3% 4.0% 0.85 0.12 1.28 79.9 Leasing Automobile Dealers 1.37 -16 113 -2.6% 9.5% 1.25 0.14 1.18 79.7 Individual and Family Services 1.46 82 266 -1.5% 12.6% 0.51 0.01 1.25 79.2 Other Motor Vehicle Dealers 2.41 1 64 -6.8% 3.9% 1.07 0.14 1.18 79.0 Activities Related to Credit 0.32 5 24 0.5% -7.1% 1.42 0.08 1.36 78.8 Intermediation Other Textile Product Mills 5 0.59 0 -7 4.1% 13.6% 0.87 0.99 1.18 78.8 Electronic and Precision Equipment 0.80 15 55 11.2% -11.6% 1.34 0.01 1.21 78.8 Repair and Maintenance Cattle Ranching and Farming 0.49 30 -5 3.0% 0.33 0.74 1.44 78.6
Region 6 Empirical Report 28
Workforce Gap Analysis
In this section, we compare the occupation-driven demand for trained workers in GO Virginia Region 6 to the pipeline of completers graduating from regional post-secondary education programs, to identify potential gaps between the two.
REGIONAL DEMAND FOR TRAINED WORKERS To estimate the occupation-driven demand for trained workers in Region 6, we start with the most recent sub-state occupational employment projections from the Virginia Employment Commission. According to those projections, between 2014 and 2024 Region 6 will experience approximately 5,980 job openings each year.26 Figure 16 provides a breakdown of these annual openings by major occupation category.
26 Source: Virginia Employment Commission, “2014 to 2024 Sub-state Occupational Employment Projections.” It should be noted that the Virginia Employment Commission produces sub-state employment projections for Workforce Development Areas only. The Workforce Development Area most closely associated with GO Virginia Region 6 is the Bay Consortium. The Bay Consortium encompasses the Region 6 localities of the City of Fredericksburg, and the counties of Caroline, Essex, King and Queen, King George, King William, Lancaster, Mathews, Middlesex, Northumberland, Richmond, Spotsylvania, Stafford, and Westmoreland. However, the Bay Consortium does not include the Region 6 locality of Gloucester County, and it does include the counties of Accomack and Northampton, which are not part of Region 6.
Region 6 Empirical Report 29
Figure 16: Projected Average Annual Openings in Region 6 by Major Occupation Category – 2014 to 202427
Food Preparation and Serving Related Occupations 1,005
Sales and Related Occupations 837
Office and Administrative Support Occupations 754
Education, Training, and Library Occupations 457
Healthcare Practitioners and Technical Occupations 351
Transportation and Material Moving Occupations 267
Personal Care and Service Occupations 262
Business and Financial Operations Occupations 228
Management Occupations 209
Installation, Maintenance, and Repair Occupations 206
Healthcare Support Occupations 196
Computer and Mathematical Occupations 191
Construction and Extraction Occupations 180
Production Occupations 172
Building and Grounds Cleaning and Maintenance… 163
Protective Service Occupations 146
Architecture and Engineering Occupations 113
Community and Social Service Occupations 89
Arts, Design, Entertainment, Sports, and Media… 52
Life, Physical, and Social Science Occupations 51
Farming, Fishing, and Forestry Occupations 27
Legal Occupations 24
0 500 1,000 1,500
27 Data Source: Virginia Employment Commission.
Region 6 Empirical Report 30
REGIONAL SUPPLY OF COMPLETERS To estimate the regional supply of completers from those education and training programs identified in the demand analysis, we use 2017-18 completions data from the U.S. Department of Education’s IPEDS Data Center for all post-secondary institutions within Region 6.28
COMPARING DEMAND AND SUPPLY In the next step of the process, we use a crosswalk developed by the National Crosswalk Service Center to “map” occupations into the specific education and training program(s) necessary for entrance into that occupation.29 It is important to realize that these relationships are often many-to-many (one occupation maps into multiple programs, or one program maps into multiple occupations). Our approach specifically takes this into account by “allocating” completers across occupations based on the number of annual openings associated with each occupation. Through this process, we are able to use the occupational employment projections for Region 6 to estimate the occupation-driven demand for trained workers in Region 6.
CAVEATS In interpreting the results of this analysis, it is important to keep the following caveats in mind: • Multi-campus institutions report enrollment and completion data to the IPEDS Data Center through their main campus only. As a practical matter, this means that all enrollment and completions are reported “as if” they occurred at the main campus. However, completers from Germanna Community College, which has its main campus in Orange County have been included in this analysis because of the branch campuses that Germanna Community College has in Region 6. • Post-secondary institutions do not report completions for non-credit or specialized workforce training classes to the IPEDS Data Center. As a result, completers from these programs may not be captured in the pipeline of completers graduating from regional post-secondary education programs. • For these reasons, the training “gaps” identified in this section are correctly viewed as “potential” gaps in the regional pipeline of trained workers. They identify areas where there may be an insufficient supply of programs or program graduates within the region, and where further conversations with employers and educators/training providers may be advisable.
28 More specifically, those data capture degree and certificate completions in 2017-18 from Eastern Virginia Career College, Germanna Community College, Rappahannock Community College, University of Mary Washington, and Virginia Baptist College. 29 The National Crosswalk Service Center is funded by the U.S. Department of Labor, Employment and Training Administration.
Region 6 Empirical Report 31
PERCENTAGE OF REGIONAL NEED MET Table 2 provides detail on the proportion of demand, in terms of projected annual openings, that is being met by the existing supply of post-secondary education completers from institutions of higher education within Region 6, for those occupations that are projected to have at least ten average annual openings between 2014 and 2024.
In these tables: • Occupation: Is an occupation within the specified cluster. • Avg. Annual Openings: Is the projected number of average annual openings for the given occupation over the period from 2014 to 2024. • Typical Educ. Level: Is the level of educational attainment typically associated with the given occupation. • Cert: Is the number of 2017-18 completers from education and training programs in Region 6 associated with the given occupation that received a less than two-year postsecondary education certificate. • Assoc: Is the number of 2017-18 completers from education and training programs in Region 6 associated with the given occupation that received an associate’s degree. • BA: Is the number of 2017-18 completers from education and training programs in Region 6 associated with the given occupation that received a bachelor’s degree. • MA: Is the number of 2017-18 completers from education and training programs in Region 6 associated with the given occupation that received a master’s degree. • Total Comp: Is the total number of 2017-18 completions from education and training programs in Region 6 associated with the given occupation. • % of Need Met: Is the percentage of demand for trained workers in the given occupation that was met through regional education and training programs.
Region 6 Empirical Report 32
Many of the gaps identified in Table 2 pertain to occupations that typically require a baccalaureate degree. The primary reason for this is that there is only one four-year degree granting post-secondary education institution in Region 6 – the University of Mary Washington in the City of Fredericksburg. In all likelihood, many of these shortfalls would actually be filled by graduates from institutions that are outside of the region.
However, there are some instances, particularly in “middle-skill” occupations that require a less than a two-year, post-secondary certificate, where the identified gaps could potentially be problematic. Those occupations are: • Automotive Service Technicians and Mechanics • Bus and Truck Mechanics and Diesel Engine Specialists • Dental Assistants • Electrical Power-Line Installers and Repairers • Electricians • Heating, Air Conditioning, and Refrigeration Mechanics • Heavy and Tractor-Trailer Truck Drivers • Industry and Machinery Mechanics • Physical Therapist Assistants • Plumbers, Pipefitters, and Steamfitters
Region 6 Empirical Report 33
Table 2: Potential Gaps in Pipeline of Trained Workers in Region 6
Occupational Demand Supply of Completers % of Occupation Avg. Annual Typical Need Cert. Assoc. BA MA Total Comp. Openings Educ. Level Met. Office Clerks, General 157 HS 0% Cooks, Restaurant 130 HS 18 18 14% Insurance Sales Agents 98 BA 0% Personal Care Aides 94 HS 0% Registered Nurses 90 Associates 64 195 22 281 100% Nursing Assistants 84 HS 0% Customer Service Representatives 80 HS 0% Elementary School Teachers, Except Special Education 79 BA 27 27 34% Receptionists and Information Clerks 73 HS 0% Secondary School Teachers, Except Special and Career/Technic 68 BA 270 270 100% First-Line Supervisors of Retail Sales Workers 66 HS 0% General and Operations Managers 62 Associates 59 10 70 100% Teacher Assistants 59 Some College 0% Management Analysts 50 BA 48 8 56 100% Automotive Service Technicians and Mechanics 49 25 25 51% Heavy and Tractor-Trailer Truck Drivers 48 HS 0% Police and Sheriff's Patrol Officers 46 0% Accountants and Auditors 43 0% Bartenders 43 HS 0% Maintenance and Repair Workers, General 43 HS 0% Licensed Practical and Licensed Vocational Nurses 42 Certificate 181 181 100% Middle School Teachers, Except Special and Career/Technical 40 BA 0% Childcare Workers 40 HS 21 13 34 85% Computer Systems Analysts 39 Associates 10 12 19 42 100% Preschool Teachers, Except Special Education 33 Some College 0% Software Developers, Systems Software 30 BA 0%
Region 6 Empirical Report 34
Table 2: Potential Gaps in Pipeline of Trained Workers in Region 6
Occupational Demand Supply of Completers % of Occupation Avg. Annual Typical Need Cert. Assoc. BA MA Total Comp. Openings Educ. Level Met. Correctional Officers and Jailers 30 HS 0% Sales Representatives, Wholesale and Manufacturing, Except T 28 BA 0% Mental Health Counselors 25 MA 0% Sales Representatives, Services, All Other 25 0% Tellers 25 HS 0% Physical Therapists 24 MA 0% Carpenters 24 0% Light Truck or Delivery Services Drivers 23 HS 0% Managers, All Other 22 71 18 267 8 364 100% Physical Therapist Assistants 22 Associates 12 12 55% Bus Drivers, School or Special Client 22 HS 0% Medical Assistants 21 Certificate 18 18 86% Insurance Claims and Policy Processing Clerks 20 0% Hairdressers, Hairstylists, and Cosmetologists 19 Certificate 1 1 5% Bookkeeping, Accounting, and Auditing Clerks 19 HS 0% Training and Development Specialists 18 BA 0% Child, Family, and School Social Workers 18 BA 0% Secretaries and Administrative Assistants, Except Legal, Med 18 HS 0% Software Developers, Applications 17 BA 0% Physicians and Surgeons, All Other 17 0% Dental Assistants 17 Certificate 8 8 47% Cooks, Institution and Cafeteria 17 Less than HS 2 2 14% Education Administrators, Elementary and Secondary School 16 MA 0% Mechanical Engineers 16 BA 0% Fitness Trainers and Aerobics Instructors 16 BA 0% Computer User Support Specialists 15 BA 0%
Region 6 Empirical Report 35
Table 2: Potential Gaps in Pipeline of Trained Workers in Region 6
Occupational Demand Supply of Completers % of Occupation Avg. Annual Typical Need Cert. Assoc. BA MA Total Comp. Openings Educ. Level Met. Electrical and Electronics Engineering Technicians 15 18 18 100% Medical and Health Services Managers 14 BA 0% Operating Engineers and Other Construction Equipment Operators 14 HS 0% Plumbers, Pipefitters, and Steamfitters 14 0% First-Line Supervisors of Mechanics, Installers, and Repairers 14 HS 0% Heating, Air Conditioning, and Refrigeration Mechanics 14 7 7 50% Food Service Managers 13 Less than HS 0% Purchasing Agents, Except Wholesale, Retail, and Farm Production 13 BA 0% Human Resources Specialists 13 BA 0% Electrical Engineers 13 BA 0% Engineers, All Other 13 17 17 100% Lawyers 13 Doc 0% Nurse Practitioners 13 MA 0% Emergency Medical Technicians and Paramedics 13 Certificate 14 14 100% First-Line Supervisors of Construction Trades and Extraction 13 HS 0% Electricians 13 Certificate 0% Industrial Machinery Mechanics 13 Certificate 0% Coaches and Scouts 12 BA 0% Water and Wastewater Treatment Plant and System Operators 12 HS 0% Information Security Analysts 11 BA 0% Financial Managers 10 0% Cost Estimators 10 BA 10 2 11 100% Market Research Analysts and Marketing Specialists 10 BA 0% Computer and Information Research Scientists 10 MA 3 3 5 11 100% Network and Computer Systems Administrators 10 BA 3 3 5 11 100% Electronics Engineers, Except Computer 10 BA 0%
Region 6 Empirical Report 36
Table 2: Potential Gaps in Pipeline of Trained Workers in Region 6
Occupational Demand Supply of Completers % of Occupation Avg. Annual Typical Need Cert. Assoc. BA MA Total Comp. Openings Educ. Level Met. Social and Human Service Assistants 10 BA 0% Home Health Aides 10 HS 0% Parts Salespersons 10 HS 0% Production, Planning, and Expediting Clerks 10 HS 0% Highway Maintenance Workers 10 HS 0% Electrical Power-Line Installers and Repairers 10 Certificate 0%
Region 6 Empirical Report 37
Forward-Looking Assessment
This section summarizes information for Region 6 tied to GO Virginia’s four priority areas: talent development, start-up companies, scale-ups, and site development for new business prospects. The information in this section relies heavily on a report for the region commissioned by the statewide board of GO Virginia.30
TALENT DEVELOPMENT Between 2012 and 2017, the share of the working-age population with at least a bachelor’s degree grew by 17 percent, which was significantly faster than the 10 percent growth rate for the state as a whole or the 12 percent growth rate for the entire United States.
Talent development is facilitated by the University of Mary Washington’s StartUp program that provides experiential startup training to high school, community college, and to its own students. Its EagleWorks Incubator and Germanna Community College’s FredCAT provide a mix of office space, prototyping space, and programming for entrepreneurs and startups. The University of Mary Washington EagleWorks Incubator and the University’s Center for Economic Development provide a range of mentoring, business services, and programs to support startup companies and their founders. The George Mason University Innovation Commercialization Assistance Program provides lean startup training.
START-UP COMPANIES In Region 6, the rate of new business formation rate is very close to the state average. In 2017, it was 8 percent in the Region and 9 percent statewide. The rate varies significantly from one year to the next, however, over the 2007-2017 period the variance has stayed within a range without any significant upward or downward trend.
Startup activity in the region is occurring across almost the entire spectrum of industry sectors. Traded sector startups accounted for half of the total number of traded-sector companies existing in the area. Start-up activity differs across the region. The area covered by the George Washington Regional Commission has a high concentration of startup employment in Research & Development, Engineering & Technical Services, and Manufacturing. Both the Northern Neck and Middle Peninsula areas have high concentrations of startup employment in Agriculture, Food Processing, Natural Resources, and Finished Products. Startups in the Middle Peninsula area have a high concentration of employment in the Health Services and Life Sciences sectors, while those in the Northern Neck area have a high concentration in Manufacturing. Table 3 shows the number of start-ups and start-up employment within the region.
Table 3. – Start-Up Data by Major Industry Cluster for Region 6
30 TEConomy Partners, Regional Entrepreneurial Assessment Project: Briefing Report, Region 6: Mary Ball Washington Region, 2018.
Region 3 Empirical Report 38
Major Industry Cluster Number of Number of Number of Start-up Start-ups Start-ups Start-ups High Employment Industry Cluster in Cluster Surviving Growth Levels, 2017 Employment by 2017 Start-ups in Concentration Cluster** Index*
Agriculture & Food 169 101 6 371 1.04 Processing
Business Services 994 514 77 2,067 0.71
Energy, Natural Resources, & 110 57 14 572 1.40 Finished Products
Engineering, R&D, Testing & 136 94 23 744 1.17 Technical Services
Financial & Insurance 278 127 7 391 0.60 Services
Health Care Services 50 36 8 814 1.20
Information Technology & 128 74 26 560 0.60 Communications Services
Life Sciences 70 34 10 258 1.03
Manufacturing 127 72 16 603 1.29
Ship Building, Aerospace, & 7 3 2 8 0.10 Defense
Transportation, Distribution 285 128 22 625 0.92 and Logistics
Other Traded Sectors 875 394 69 2,361 0.69
*Startups Employment Concentration Index represents specialization of startup activity in certain industry clusters given overall state trends. **Defined as greater than 25 percent annualized employment growth over the life of the company.
Patent activity is one way to measure the development impact of start-up companies. Patent awards have consistently declined year over year from 150 in 2014 to 88 in 2017. The overwhelming majority of patents issued to assignees in the region are to government organizations. Table 4 shows the organizational assignees of patents issued in the region between 2010 and 2017.
Region 3 Empirical Report 39
Table 4. – Assignees of Patents within Mary Ball Washington Region Inventors, 2010-2017
Assignees # of patents
U.S. Navy 96
U.S. Postal Service 13
KLA-Tencor Corporation (Milpitas, CA) 11
NASA 10
Reid, John H. (Reid Engineering Corp., Fredericksburg, VA) 9
QRC Technologies Inc. (Fredericksburg, VA) 8
Altria Client Services 8
U.S. Army 8
College of William and Mary (VIMS) 8
Printpack Illinois Inc. (Fredericksburg, VA location) 7 Life Technologies Corp. (owned by Thermo Fisher Scientific; manufacturing facility in 6 Middletown, VA) Trimble Navigation Ltd. (Sunnyvale, CA; Herndon, VA location) 5
Manufacturing Technologies Inc. 5 Source: U.S. Patent & Trademark Office data from Thomson Reuters Thomson Innovation patent analysis database
Of the technology patents issued from 2010 to 2017, they cover a fairly wide range of purposes, from data processing to biotech. Table 5 shows the types of technology patents issued in the area.
Table 5. – Technology Class Patents Issued in Region 6, 2010-2017
Technology Class Area Number of Patents
Digital computing or data processing equipment or methods, specially adapted for specific 11 functions Data processing systems specially adapted to administration and management purposes 7 Satellite radio beacon positioning systems; Determining position, velocity or attitude using 7 signals transmitted by such systems Biological treatment of water, wastewater, or sewage 7 Mutation or genetic engineering; DNA or RNA concerning genetic engineering, vectors, e.g. 6 plasmids, or their isolation, preparation or purification Source: U.S. Patent & Trademark Office data from Thomson Reuters Thomson Innovation patent analysis database
Region 3 Empirical Report 40
SCALE-UPS In 2017 in the region, there were 1,086 startups in traded sectors that had been established since 2007 and were still in business, providing 6,090 jobs. By comparison, over the 2007-2017 period, total traded- sector industry employment grew by 5,202 jobs in Region 6.
Local growth and high growth companies are being launched in sectors aligned to regional industry strengths. However, the percentage of enterprises started in 2007 that were still in operation in 2017 was only 26.5 percent which is significantly lower than the statewide average of 31.4 percent. In Region 6, 6.6 percent of traded sector employment was in startups 0 5 years compared to 7.1 percent at the state level. While, in Region 6, 8.8 percent of traded sector employment was in startups aged 6 to 10 years compared to 7.3 percent at the state level.
In 2010, 256 traded sector companies were launched in Region 6. In 2017, 89 were still in business (a 34.8% survival rate), and those companies created 574 jobs. Table 6 shows how the survival of traded- sector start-ups in the region and their employment changed over time.
Table 6. – Traded-Sector Start-Up Survival and Employment, 2007-201731
Founding Year of Number of Number of Survival Rate by Start-up Startup Cohort Startups in Traded Startups Surviving 2017 Employment Sector Industries by 2017 Levels 2017 2007 245 65 26.5% 483 2008 190 56 29.5% 441 2009 135 45 33.3% 296 2010 256 89 34.8% 574 2011 113 43 38.0% 261 2012 233 110 47.2% 679 2013 300 149 49.7% 604 2014 164 91 55.5% 434 2015 213 152 71.4% 876 2016 150 107 71.3% 494 2017 179 179 100% 948
31 Data Source: Business Dynamics Research Consortium database.
Region 3 Empirical Report 41
Data Appendix
ANNUAL EMPLOYMENT CHANGE BY MAJOR INDUSTRY SECTOR AND PLANNING DISTRICT – 2014 TO 2018 Table A1 – Annual Change in Employment in GO Virginia Region 6 by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 2.2% 2.4% 2.3% 1.4% 1.7% Services Agriculture, Forestry, Fishing 1.3% 2.9% -3.9% 2.1% 4.8% and Hunting Arts, Entertainment, and 1.4% 10.6% 0.2% -8.1% 0.8% Recreation Construction 2.8% 3.0% 4.0% 1.6% -1.2% Educational Services 7.3% 7.2% 6.1% 1.7% -0.1% Finance and Insurance 3.6% 0.5% 0.4% 0.8% 2.8% Health Care and Social -0.8% -0.1% 1.6% 0.7% 2.3% Assistance Information -2.0% -7.6% -11.4% -6.0% -2.7% Manufacturing 0.5% 0.7% 4.8% 0.1% -5.0% Mining, Quarrying, and Oil 4.2% 5.7% -2.2% 0.6% 3.3% and Gas Extraction Other Services (except Public 2.1% 6.4% 2.2% 6.8% 7.5% Administration) Professional, Scientific, and 0.6% 2.3% 0.1% 1.6% 7.9% Technical Services Real Estate and Rental and -4.5% 1.7% 12.9% 2.6% 3.5% Leasing Retail Trade 0.2% 1.6% -0.8% 1.2% 1.1% Transportation and 3.6% 3.5% 33.0% 7.2% -0.6% Warehousing Utilities 17.0% 1.4% 1.2% -5.4% -17.9% Wholesale Trade 2.1% -1.6% -10.2% -1.5% -3.4%
Region 3 Empirical Report 42
Table A2 – Annual Change in Employment in the George Washington PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 3.0% 2.4% 2.0% 1.8% 1.2% Services Agriculture, Forestry, Fishing 0.8% -9.8% 8.3% 14.6% -7.4% and Hunting Arts, Entertainment, and 4.4% 15.9% 0.4% -5.9% -3.5% Recreation Construction 4.6% 2.2% 4.5% 1.1% -3.0% Educational Services 8.5% 8.8% 7.3% 2.6% -0.2% Finance and Insurance 4.8% 1.2% 0.8% 1.0% 3.2% Health Care and Social -0.2% -0.4% 1.6% 0.4% 2.7% Assistance Information -3.3% -10.3% -13.3% -6.2% -2.9% Manufacturing 1.0% 0.6% 9.9% -1.4% -4.0% Mining, Quarrying, and Oil 3.9% 5.6% -2.7% 2.7% 4.4% and Gas Extraction Other Services (except Public 2.5% 8.0% 2.0% 7.7% 7.8% Administration) Professional, Scientific, and 0.2% 2.6% -0.1% 2.9% 8.6% Technical Services Real Estate and Rental and -3.4% 2.4% 16.0% 5.8% 3.6% Leasing Retail Trade -0.2% 1.4% -0.2% 1.4% 1.6% Transportation and 4.2% 2.4% 28.4% 4.9% -1.1% Warehousing Utilities 0.6% 0.0% 1.2% -9.9% -3.9% Wholesale Trade 3.6% -1.9% -13.8% -3.2% -3.4%
Region 3 Empirical Report 43
Table A3 – Annual Change in Employment in the Middle Peninsula PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food -0.3% 3.8% 3.1% 0.0% 5.5% Services Agriculture, Forestry, Fishing 9.9% -0.3% 0.0% -5.8% -3.2% and Hunting Arts, Entertainment, and 0.0% -3.7% -4.5% -26.0% 38.6% Recreation Construction -1.6% 7.0% 0.2% 2.3% 5.7% Educational Services -8.5% -3.7% 1.9% -7.6% -1.0% Finance and Insurance -6.7% -5.4% -2.3% -1.2% 0.4% Health Care and Social -2.6% 2.4% 1.6% 2.2% -0.7% Assistance Information 5.6% 7.6% -6.5% -5.2% -2.5% Manufacturing -1.3% -4.5% 1.9% -1.3% -8.0% Mining, Quarrying, and Oil 4.7% 6.0% -1.4% -2.9% 1.5% and Gas Extraction Other Services (except Public 1.8% 0.5% 3.1% 5.5% 8.1% Administration) Professional, Scientific, and 7.4% 7.2% -2.4% -4.2% 0.9% Technical Services Real Estate and Rental and -5.2% 0.4% -2.5% -13.4% -3.5% Leasing Retail Trade 0.7% 2.4% -3.9% 2.3% 1.6% Transportation and 5.2% 18.3% 96.1% 22.0% 2.6% Warehousing Utilities 5.9% 1.4% -1.4% Wholesale Trade -1.1% 1.0% 3.0% 9.2% -5.7%
Region 3 Empirical Report 44
Table A4 – Annual Change in Employment in the Northern Neck PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food -2.0% 0.1% 4.7% -0.3% 0.7% Services Agriculture, Forestry, Fishing -7.0% 16.9% -15.5% 1.8% 24.6% and Hunting Arts, Entertainment, and -12.8% -1.4% 6.5% 1.3% -8.2% Recreation Construction -3.3% 2.5% 6.6% 4.3% 1.1% Educational Services 11.0% 2.3% -0.6% -0.6% 1.2% Finance and Insurance 0.2% -3.6% -3.1% 0.0% -0.9% Health Care and Social -2.1% -1.0% 1.4% 0.2% 4.2% Assistance Information 0.0% -2.9% -3.7% -6.2% -1.6% Manufacturing 2.3% 8.3% -0.7% 4.8% -3.2% Mining, Quarrying, and Oil
and Gas Extraction Other Services (except Public -0.2% 3.8% 2.3% 2.1% 4.7% Administration) Professional, Scientific, and -1.3% -10.7% 6.7% -13.9% 6.0% Technical Services Real Estate and Rental and -14.9% -3.9% 10.1% -5.5% 16.5% Leasing Retail Trade 2.7% 1.5% 1.3% -2.2% -4.7% Transportation and -6.1% -1.0% -1.5% 3.1% -3.0% Warehousing Utilities 1.2% 3.7% 1.2% 9.3% -1.1% Wholesale Trade -7.3% -3.0% 4.1% -7.8% 1.4%
Region 3 Empirical Report 45
CUMULATIVE EMPLOYMENT CHANGE BY MAJOR INDUSTRY SECTOR AND PLANNING DISTRICT – 2014 TO 2018 Table A5 – Cumulative Change in Employment in GO Virginia Region 6 by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 2.4% 4.8% 6.3% 8.2% Services Agriculture, Forestry, Fishing 0.0% 2.9% -1.1% 1.0% 5.8% and Hunting Arts, Entertainment, and 0.0% 10.6% 10.8% 1.9% 2.8% Recreation Construction 0.0% 3.0% 7.1% 8.9% 7.6% Educational Services 0.0% 7.2% 13.7% 15.6% 15.5% Finance and Insurance 0.0% 0.5% 0.9% 1.6% 4.4% Health Care and Social 0.0% -0.1% 1.5% 2.2% 4.5% Assistance Information 0.0% -7.6% -18.1% -23.1% -25.2% Manufacturing 0.0% 0.7% 5.5% 5.6% 0.3% Mining, Quarrying, and Oil 0.0% 5.7% 3.4% 4.0% 7.5% and Gas Extraction Other Services (except Public 0.0% 6.4% 8.8% 16.1% 24.9% Administration) Professional, Scientific, and 0.0% 2.3% 2.3% 3.9% 12.2% Technical Services Real Estate and Rental and 0.0% 1.7% 14.7% 17.7% 21.9% Leasing Retail Trade 0.0% 1.6% 0.8% 2.1% 3.2% Transportation and 0.0% 3.5% 37.6% 47.6% 46.7% Warehousing Utilities 0.0% 1.4% 2.7% -2.9% -20.2% Wholesale Trade 0.0% -1.6% -11.6% -12.9% -15.9%
Region 3 Empirical Report 46
Table A6 – Cumulative Change in Employment in the George Washington PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 2.4% 4.5% 6.4% 7.7% Services Agriculture, Forestry, Fishing 0.0% -9.8% -2.3% 12.0% 3.8% and Hunting Arts, Entertainment, and 0.0% 15.9% 16.3% 9.5% 5.6% Recreation Construction 0.0% 2.2% 6.8% 8.0% 4.8% Educational Services 0.0% 8.8% 16.8% 19.9% 19.6% Finance and Insurance 0.0% 1.2% 2.1% 3.1% 6.3% Health Care and Social 0.0% -0.4% 1.1% 1.5% 4.2% Assistance Information 0.0% -10.3% -22.2% -27.0% -29.1% Manufacturing 0.0% 0.6% 10.6% 9.0% 4.7% Mining, Quarrying, and Oil 0.0% 5.6% 2.8% 5.6% 10.3% and Gas Extraction Other Services (except Public 0.0% 8.0% 10.3% 18.7% 28.0% Administration) Professional, Scientific, and 0.0% 2.6% 2.5% 5.6% 14.6% Technical Services Real Estate and Rental and 0.0% 2.4% 18.7% 25.6% 30.1% Leasing Retail Trade 0.0% 1.4% 1.2% 2.6% 4.2% Transportation and 0.0% 2.4% 31.4% 37.8% 36.3% Warehousing Utilities 0.0% 0.0% 1.2% -8.8% -12.4% Wholesale Trade 0.0% -1.9% -15.4% -18.1% -20.9%
Region 3 Empirical Report 47
Table A7 – Cumulative Change in Employment in the Middle Peninsula PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 3.8% 7.1% 7.0% 12.9% Services Agriculture, Forestry, Fishing 0.0% -0.3% -0.3% -6.0% -9.0% and Hunting Arts, Entertainment, and 0.0% -3.7% -8.1% -32.0% -5.8% Recreation Construction 0.0% 7.0% 7.2% 9.6% 15.8% Educational Services 0.0% -3.7% -1.9% -9.3% -10.3% Finance and Insurance 0.0% -5.4% -7.6% -8.6% -8.3% Health Care and Social 0.0% 2.4% 4.0% 6.3% 5.5% Assistance Information 0.0% 7.6% 0.6% -4.7% -7.0% Manufacturing 0.0% -4.5% -2.7% -4.0% -11.6% Mining, Quarrying, and Oil 0.0% 6.0% 4.5% 1.5% 3.0% and Gas Extraction Other Services (except Public 0.0% 0.5% 3.6% 9.2% 18.1% Administration) Professional, Scientific, and 0.0% 7.2% 4.6% 0.2% 1.1% Technical Services Real Estate and Rental and 0.0% 0.4% -2.1% -15.3% -18.2% Leasing Retail Trade 0.0% 2.4% -1.6% 0.6% 2.2% Transportation and 0.0% 18.3% 131.9% 182.9% 190.1% Warehousing Utilities 0.0% 5.9% 7.4% 5.9% Wholesale Trade -1.1% 1.0% 3.0% 9.2% -5.7%
Region 3 Empirical Report 48
Table A8 – Cumulative Change in Employment in the Northern Neck PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 0.1% 4.8% 4.5% 5.2% Services Agriculture, Forestry, Fishing 0.0% 16.9% -1.2% 0.6% 25.4% and Hunting Arts, Entertainment, and 0.0% -1.4% 5.0% 6.4% -2.3% Recreation Construction 0.0% 2.5% 9.3% 13.9% 15.2% Educational Services 0.0% 2.3% 1.8% 1.2% 2.3% Finance and Insurance 0.0% -3.6% -6.6% -6.6% -7.5% Health Care and Social 0.0% -1.0% 0.4% 0.6% 4.9% Assistance Information 0.0% -2.9% -6.5% -12.2% -13.7% Manufacturing 0.0% 8.3% 7.6% 12.8% 9.1% Mining, Quarrying, and Oil
and Gas Extraction Other Services (except Public 0.0% 3.8% 6.3% 8.5% 13.6% Administration) Professional, Scientific, and 0.0% -10.7% -4.7% -17.9% -13.0% Technical Services Real Estate and Rental and 0.0% -3.9% 5.8% 0.0% 16.5% Leasing Retail Trade 0.0% 1.5% 2.7% 0.5% -4.2% Transportation and 0.0% -1.0% -2.5% 0.5% -2.5% Warehousing Utilities 0.0% 3.7% 4.9% 14.6% 13.4% Wholesale Trade 0.0% -3.0% 1.0% -6.9% -5.6%
Region 3 Empirical Report 49
ANNUAL WAGE CHANGE BY MAJOR INDUSTRY SECTOR AND PLANNING DISTRICT – 2014 TO 2018 Table A9 – Annual Change in Nominal Weekly Wages in GO Virginia Region 6 by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 1.9% 4.1% 3.0% 3.0% 2.5% Services Agriculture, Forestry, Fishing 6.5% 4.0% 7.0% 5.6% 18.0% and Hunting Arts, Entertainment, and 0.7% -1.3% 1.5% 3.6% 4.1% Recreation Construction 3.4% 3.1% 1.6% 8.1% 0.1% Educational Services 6.8% 6.1% 18.7% 2.8% -0.3% Finance and Insurance 3.1% 2.9% 0.7% 6.5% 6.0% Health Care and Social 0.7% 1.7% 0.6% 3.3% 2.1% Assistance Information 3.1% 0.0% 3.1% 0.7% 4.9% Manufacturing 6.5% 5.3% 1.9% -1.6% 4.7% Mining, Quarrying, and Oil 10.6% 5.8% 0.5% -2.1% -2.1% and Gas Extraction Other Services (except Public 1.5% 2.7% 0.9% 3.5% 1.3% Administration) Professional, Scientific, and 0.2% 1.6% -1.8% 3.2% 2.6% Technical Services Real Estate and Rental and 0.2% 2.9% -4.3% 7.0% 1.7% Leasing Retail Trade 2.4% 1.9% 1.8% 1.2% 1.3% Transportation and -0.3% -1.2% 10.7% 0.8% 3.4% Warehousing Utilities -2.1% 2.2% 4.5% 4.8% 7.0% Wholesale Trade 2.5% 3.8% -0.2% 5.4% 2.2%
Region 3 Empirical Report 50
Table A10 – Annual Change in Nominal Weekly Wages in the George Washington PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 2.1% 4.4% 2.9% 2.8% 2.1% Services Agriculture, Forestry, Fishing 6.7% 27.3% -1.6% 5.0% 2.5% and Hunting Arts, Entertainment, and -0.7% -0.3% 0.0% 4.4% 4.2% Recreation Construction 3.0% 2.5% 1.0% 9.3% -1.1% Educational Services 7.8% 9.0% 20.0% 2.4% 1.1% Finance and Insurance 3.0% 2.5% 0.5% 6.6% 6.2% Health Care and Social 0.6% 1.6% -0.3% 3.4% 1.9% Assistance Information 4.1% 0.1% 3.8% 2.7% 6.7% Manufacturing 4.9% 8.6% 2.0% -8.2% 2.7% Mining, Quarrying, and Oil 8.4% 7.6% 3.5% -5.8% -4.2% and Gas Extraction Other Services (except Public 1.3% 1.5% 0.2% 4.3% 1.2% Administration) Professional, Scientific, and -0.4% 2.1% -1.8% 2.9% 2.6% Technical Services Real Estate and Rental and 0.7% 2.0% -5.6% 6.7% 1.5% Leasing Retail Trade 2.2% 1.4% 4.0% 1.3% 0.9% Transportation and -0.9% -1.8% 6.3% 1.4% 4.4% Warehousing Utilities -0.6% 2.6% 4.7% 5.5% 4.0% Wholesale Trade 2.2% 3.8% 0.5% 6.3% 2.1%
Region 3 Empirical Report 51
Table A11 – Annual Change in Nominal Weekly Wages in the Middle Peninsula PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food -0.8% 3.6% 4.6% 2.9% 5.0% Services Agriculture, Forestry, Fishing 1.1% 1.5% 3.7% 3.6% 2.1% and Hunting Arts, Entertainment, and 5.5% -0.5% 3.6% 6.4% -2.3% Recreation Construction 5.3% 5.6% 2.4% 4.2% 4.2% Educational Services -7.8% -1.2% -1.8% -1.2% -8.8% Finance and Insurance 2.2% 1.7% 3.2% 2.7% 4.1% Health Care and Social 1.5% 0.4% 6.1% 5.4% 3.2% Assistance Information 8.2% 5.1% -0.6% -2.7% -4.8% Manufacturing 7.0% 3.9% -0.4% 2.7% 8.6% Mining, Quarrying, and Oil 15.3% 2.3% -5.2% 5.2% 2.1% and Gas Extraction Other Services (except Public 0.7% 7.1% 0.9% 1.9% -0.2% Administration) Professional, Scientific, and 14.5% -0.3% -3.7% 3.8% 1.9% Technical Services Real Estate and Rental and -3.3% 9.1% -3.4% 1.2% 8.5% Leasing Retail Trade 4.3% 4.3% -7.9% -0.6% 1.8% Transportation and 3.4% 3.3% 45.3% -3.4% -0.7% Warehousing Utilities 1.4% 2.8% 6.9% Wholesale Trade 1.3% 3.9% 1.8% 2.7% 3.5%
Region 3 Empirical Report 52
Table A12 – Annual Change in Nominal Weekly Wages in the Northern Neck PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 4.0% 1.9% 1.3% 4.7% 3.3% Services Agriculture, Forestry, Fishing 12.0% -6.2% 17.2% 9.6% 40.4% and Hunting Arts, Entertainment, and 6.4% 1.0% 4.3% -1.4% 7.4% Recreation Construction 0.4% 5.9% 4.8% 4.7% 6.3% Educational Services 7.4% -13.3% 13.5% 5.6% -11.1% Finance and Insurance 3.3% 9.0% 1.8% 7.1% 3.8% Health Care and Social -0.6% 5.7% 0.6% -2.1% 2.0% Assistance Information -5.5% 10.9% 7.9% -14.3% -4.6% Manufacturing 9.5% 2.4% 4.5% 6.5% 3.8% Mining, Quarrying, and Oil
and Gas Extraction Other Services (except Public 3.2% 3.8% 6.7% -1.4% 3.5% Administration) Professional, Scientific, and 6.7% -6.6% 0.8% -2.1% -2.9% Technical Services Real Estate and Rental and -5.2% -1.5% 9.6% 11.3% -6.5% Leasing Retail Trade 1.0% 2.2% 2.4% 4.4% 3.1% Transportation and 2.8% 4.3% -0.3% -2.2% 0.9% Warehousing Utilities 1.1% 2.3% 5.2% 3.2% 8.4% Wholesale Trade 3.5% 6.2% -0.5% 4.7% 1.0%
Region 3 Empirical Report 53
CUMULATIVE WAGE CHANGE BY MAJOR INDUSTRY SECTOR AND PLANNING DISTRICT – 2014 TO 2018 Table A13 – Cumulative Change in Nominal Weekly Wages in GO Virginia Region 6 by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 4.1% 7.2% 10.4% 13.2% Services Agriculture, Forestry, Fishing 0.0% 4.0% 11.3% 17.5% 38.6% and Hunting Arts, Entertainment, and 0.0% -1.3% 0.1% 3.8% 8.1% Recreation Construction 0.0% 3.1% 4.8% 13.3% 13.4% Educational Services 0.0% 6.1% 26.0% 29.5% 29.1% Finance and Insurance 0.0% 2.9% 3.7% 10.4% 17.0% Health Care and Social 0.0% 1.7% 2.3% 5.6% 7.9% Assistance Information 0.0% 0.0% 3.1% 3.8% 8.9% Manufacturing 0.0% 5.3% 7.3% 5.6% 10.6% Mining, Quarrying, and Oil 0.0% 5.8% 6.3% 4.2% 2.0% and Gas Extraction Other Services (except Public 0.0% 2.7% 3.5% 7.1% 8.5% Administration) Professional, Scientific, and 0.0% 1.6% -0.2% 3.0% 5.7% Technical Services Real Estate and Rental and 0.0% 2.9% -1.5% 5.4% 7.2% Leasing Retail Trade 0.0% 1.9% 3.8% 5.0% 6.4% Transportation and 0.0% -1.2% 9.4% 10.2% 14.0% Warehousing Utilities 0.0% 2.2% 6.8% 11.9% 19.8% Wholesale Trade 0.0% 3.8% 3.6% 9.2% 11.7%
Region 3 Empirical Report 54
Table A14 – Cumulative Change in Nominal Weekly Wages in the George Washington PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 4.4% 7.5% 10.5% 12.9% Services Agriculture, Forestry, Fishing 0.0% 27.3% 25.3% 31.5% 34.7% and Hunting Arts, Entertainment, and 0.0% -0.3% -0.3% 4.1% 8.4% Recreation Construction 0.0% 2.5% 3.5% 13.1% 11.9% Educational Services 0.0% 9.0% 30.8% 33.8% 35.3% Finance and Insurance 0.0% 2.5% 3.0% 9.8% 16.7% Health Care and Social 0.0% 1.6% 1.3% 4.8% 6.7% Assistance Information 0.0% 0.1% 3.9% 6.7% 13.8% Manufacturing 0.0% 8.6% 10.8% 1.7% 4.5% Mining, Quarrying, and Oil 0.0% 7.6% 11.3% 4.9% 0.5% and Gas Extraction Other Services (except Public 0.0% 1.5% 1.7% 6.0% 7.3% Administration) Professional, Scientific, and 0.0% 2.1% 0.3% 3.2% 5.8% Technical Services Real Estate and Rental and 0.0% 2.0% -3.7% 2.8% 4.4% Leasing Retail Trade 0.0% 1.4% 5.4% 6.8% 7.8% Transportation and 0.0% -1.8% 4.4% 5.8% 10.5% Warehousing Utilities 0.0% 2.6% 7.3% 13.3% 17.8% Wholesale Trade 0.0% 3.8% 4.3% 10.9% 13.2%
Region 3 Empirical Report 55
Table A15 – Cumulative Change in Nominal Weekly Wages in the Middle Peninsula PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 3.6% 8.3% 11.5% 17.1% Services Agriculture, Forestry, Fishing 0.0% 1.5% 5.3% 9.1% 11.3% and Hunting Arts, Entertainment, and 0.0% -0.5% 3.0% 9.6% 7.1% Recreation Construction 0.0% 5.6% 8.2% 12.8% 17.5% Educational Services 0.0% -1.2% -3.0% -4.1% -12.5% Finance and Insurance 0.0% 1.7% 4.9% 7.7% 12.1% Health Care and Social 0.0% 0.4% 6.5% 12.3% 15.9% Assistance Information 0.0% 5.1% 4.5% 1.6% -3.3% Manufacturing 0.0% 3.9% 3.5% 6.3% 15.5% Mining, Quarrying, and Oil 0.0% 2.3% -3.0% 2.1% 4.2% and Gas Extraction Other Services (except Public 0.0% 7.1% 8.0% 10.1% 9.9% Administration) Professional, Scientific, and 0.0% -0.3% -4.0% -0.3% 1.6% Technical Services Real Estate and Rental and 0.0% 9.1% 5.3% 6.6% 15.6% Leasing Retail Trade 0.0% 4.3% -3.9% -4.5% -2.7% Transportation and 0.0% 3.3% 50.1% 44.9% 43.9% Warehousing Utilities 0.0% 1.4% 4.3% 11.5% -100.0% Wholesale Trade 0.0% 3.9% 5.8% 8.6% 12.4%
Region 3 Empirical Report 56
Table A16 – Cumulative Change in Nominal Weekly Wages in the Northern Neck PDC by Major Industry Sector
Industry 2014 2015 2016 2017 2018 Accommodation and Food 0.0% 1.9% 3.2% 8.1% 11.7% Services Agriculture, Forestry, Fishing 0.0% -6.2% 9.9% 20.5% 69.1% and Hunting Arts, Entertainment, and 0.0% 1.0% 5.4% 4.0% 11.7% Recreation Construction 0.0% 5.9% 11.0% 16.3% 23.7% Educational Services 0.0% -13.3% -1.5% 4.0% -7.5% Finance and Insurance 0.0% 9.0% 11.0% 18.8% 23.4% Health Care and Social 0.0% 5.7% 6.3% 4.1% 6.2% Assistance Information 0.0% 10.9% 19.7% 2.6% -2.1% Manufacturing 0.0% 2.4% 6.9% 13.9% 18.2% Mining, Quarrying, and Oil
and Gas Extraction Other Services (except Public 0.0% 3.8% 10.7% 9.1% 12.9% Administration) Professional, Scientific, and 0.0% -6.6% -5.9% -7.9% -10.6% Technical Services Real Estate and Rental and 0.0% -1.5% 8.0% 20.3% 12.4% Leasing Retail Trade 0.0% 2.2% 4.6% 9.3% 12.7% Transportation and 0.0% 4.3% 4.0% 1.7% 2.6% Warehousing Utilities 0.0% 2.3% 7.6% 11.0% 20.3% Wholesale Trade 0.0% 6.2% 5.6% 10.5% 11.7%
Region 3 Empirical Report 57
Jennifer Morgan
From: Fletcher Mangum
Kate and Jennifer,
The edits we discussed have been made, with one exception, and in addition I have included a “what has changed” section in the Executive Summary that compares and contrasts this analysis with the 2017 analysis.
The one exception is extending the gap analysis to each of the identified clusters. We have compiled a list of NAICS codes, but since the gap analysis was never actually done on the final clusters in 2017, we must actually create it from scratch rather than update it. That is a three to four day process and there was not time to accomplish that between our call on the 19th and today. We will complete that as promised, but it will have to be next week.
Best regards, Fletcher
A. Fletcher Mangum, Ph.D. CEO and Founder Mangum Economics 4201 Dominion Boulevard, Suite 114 Glen Allen, Virginia 23060 804-346-8446
1
JULY 2019
GROWTH & DIVERSIFICATION PLAN UPDATE 2019 MARY BALL WASHINGTON REGIONAL COUNCIL GO VIRGINIA REGION 6
NEAL BARBER, PRESIDENT COMMUNITY FUTURES 804-761-0186 [email protected]
GO Virginia - Region 6 Mary Ball Washington Regional Council Growth and Diversification Plan Update 2019
This 2019 update of the Growth and Diversification Plan has been prepared by Neal Barber, President of Community Futures, for the Mary Ball Washington Regional Council, GO Virginia – Region 6.
GO Virginia Region 6 2019 Growth & Diversification Plan
Table of Contents
Executive Summary...... 1 Regional Economic Analysis ...... 10 Stakeholder Engagement ...... 10 Regional Economic Trends/Conditions ...... 13 Priority High Performance Industry Clusters ...... 17 Workforce Gaps Analysis ...... 19 Sites, Buildings, Prospect Recommendations and Prospect Visits Analysis ...... 23 Entrepreneurial Ecosystem ...... 24 Funded Projects...... 27 Investment Strategies and Recommendations ...... 31 Desired Outcomes ...... 31 Investment Strategies and Recommendations ...... 35 Measures of Success ...... 49 Budget Considerations/Funding Sources ...... 54 Project Pipeline Analysis ...... 57 Appendix A. Stakeholder Engagement ...... 62 Appendix B. Regional Entrepreneurial Assessment Project Summary...... 68 Ideation ...... 68 Commercial Viability ...... 69 Market Entry...... 70 Growth & Scalability ...... 71 Appendix C. Virginia Initiates Program Alignment ...... 75 Virginia Research Investment Committee (VRIC) ...... 75 Collaborative Economic Development Act ...... 78 State Council of Higher Education (SCHEV) - Credentialing Program ...... 79 Appendix D. Non-GO Virginia Programs ...... 82 Virginia Business Ready Sites Program ...... 82 Commonwealth Cyber Initiative ...... 84 Amazon HQ2 Tech Talent Pipeline Initiative ...... 86
GO Virginia Region 6 2019 Growth & Diversification Plan Title
Virginia Telecommunications Initiative ...... 89 Virginia FastForward Initiative ...... 90 Opportunity Zones ...... 91 Rural Coastal Virginia Community Enhancement Authority ...... 93 Appendix E. Sites, Buildings, Prospect Recommendations and Prospect Visits Analysis ..... 95 Sites ...... 95 Buildings ...... 97 Prospect Recommendations ...... 100 Prospect Visits ...... 104 Prospect Activity Related to Product Availability ...... 107 Conclusions and Findings on Sites, Buildings, Prospect Recommendations, and Prospect Visits ...... 109
GO Virginia Region 6 2019 Growth & Diversification Plan Title
GO Virginia - Region 6 Mary Ball Washington Regional Council Growth and Diversification Plan Update 2019 Executive Summary
Mary Ball Washington GO Virginia Region 6 is one of nine GO Virginia Regions across Virginia. Region 6 consists of the George Washington Regional Council (GWRC), Middle Peninsula Planning District Commission (MPPDC), and the Northern Neck Planning District Commission (NNPDC). The purpose of GO Virginia is to create more and higher paying jobs through incentivized collaboration, primarily from out-of-state revenue, which diversifies and strengthens regional economies. In 2017 the Mary Ball Washington Regional Council adopted a Growth and Diversification Plan that outlined a series of investment strategies to accelerate the creation of higher paying jobs in priority industrial clusters. The Virginia Growth and Opportunity Act require regional councils to review and amend the growth and diversification plan every two years. The Mary Ball Washington Regional Council has reviewed and updated the 2017 Growth and Diversification Plan in accordance with the guidelines adopted by the GO Virginia Board.
Economic Trends & Drivers. An empirical assessment of economic and labor market conditions by Mangum Economics yielded these principal findings. • The private sector accounts for a smaller proportion of total employment in Region 6 than is typical for Virginia – 76 percent in Region 6, 76 percent in the GWRC, 78 percent in the MPPDC, and 77 percent in the NNPDC vs. 82 percent in Virginia. • Employment in Region 6 grew at the statewide average, 7.4 percent, over the last five years – 8.1 percent in the GWRC, 5.8 percent in the MPPDC, and 3.6 percent in the NNPDC.
1
• Average weekly wages grew a little below the statewide average over the last five years – 9.8 percent in Region 6, 9.4 percent in the GWRC, 10.4 percent in the MPPDC, and 12.5 percent in the NNPDC vs. 10.1 percent in Virginia. • Average weekly wages in 2018 continue to be below the statewide average – $806 in Region 6, $840 in the GWRC, $682 in the MPPDC, and $713 in the NNPDC vs. $1,113 in Virginia. Wages declined slightly in the MPPDC and were level in the NNPDC since 2016. • The largest most recent year-over-year private employment increases occurred in Professional, Scientific, and Technical Services ( 739 jobs), Other Services ( 474 jobs), and Health Care and Social Assistance ( 438 jobs). While the largest year-over- year declines in employment occurred in Manufacturing ( 289 jobs), Wholesale Trade ( 132 jobs), and Construction ( 96 jobs). • Over a five-year period, the three industry sectors with the largest employment growth were: Accommodation and Food Services ( 1,600 jobs), Transportation and Warehousing ( 1,576 jobs), and Other Services ( 1,461 jobs). The three industry sectors with the largest employment losses were: Wholesale Trade ( 612 jobs), Information ( 407 jobs), and Utilities ( 28 jobs). • As of May 2019, unemployment stood at 3.0 percent in Region 6 • 3.0 percent in the GWRC, 2.8 percent in the MPPDC, and 3.4 percent in the NNPDC vs. 2.9 percent statewide.
Since the 2017 Growth and Diversification Plan was adopted the following are key changes in the regional economy. • In 2017 employment growth in Region 6 exceeded the statewide trend. Now, employment growth has fallen to the statewide trend and may be decelerating below it. • In 2017 employment growth in the PDC’s was accelerating and converging. Now it is decelerating and diverging. • In 2017 wage growth was exceeding the statewide trend. Now that gap has closed. • In 2017 Transportation and Warehousing; Administrative Support and Waste Management; and Construction led employment growth then. Now, Professional,
2
Scientific, and Technical Services; Other Services; and Health Care and Social Assistance lead employment growth. • Unemployment has continued to decline since 2017. • The regional economic driver industries in 2019 are similar to those identified in 2017 and support the priority industry clusters identified in 2017.
Priority Industry Clusters. The six Priority Industry Clusters remain as identified in the 2017 Plan with the slight modification of the Aquaculture, Seafood and Commercial Fishing cluster to capture a larger array of marine related businesses/industries. • Aquaculture/Seafood/Commercial Fishing/Marine Industries • Forestry/Wood Products and Paper • Manufacturing • Distribution/Logistics • Information/Data Centers • Professional, Scientific and Technical Services
Workforce Analysis. This analysis compared demand for trained occupational workers in the high-performance industry clusters with the pipeline of graduates coming out of regional training programs identifying potential gaps between the two. • Many of the identified gaps pertained to occupations that typically require a baccalaureate degree, and this is largely attributable to the fact that there is only one four-year degree granting post-secondary education institution in Region 6 – Mary Washington University. Graduates from higher education institutions outside of the region would actually fill many of the identified shortfalls. • The identified gaps, particularly in middle-skill occupations that require a less than a two-year, post-secondary certificate, include: o Automotive Service Technicians and Mechanics, o Bus and Truck Mechanics and Diesel Engine Specialists, o Dental Assistants, o Electrical Power-Line Installers and Repairers,
3
o Electricians, o Heating, Air Conditioning, and Refrigeration Mechanics, o Heavy and Tractor-Trailer Truck Drivers, o Industry and Machinery Mechanics, o Physical Therapist Assistants, and o Plumbers, Pipefitters, and Steamfitters. Approximately 60 percent of Region 6 workers commute out of the region each day for employment. Roughly 56 percent of the workforce in the Fredericksburg region out- commute, mostly to Northern Virginia. The Middle Peninsula has the largest percentage of out-commuting, 74 percent, of any region in the Commonwealth. The Northern Neck is not far behind with 66 percent of its workers out-commuting.
Sites and Buildings Analysis. The following are the primary findings and conclusions form the analysis of VEDP data on available sites and buildings for business expansion/location and VEDP prospect activity (site recommendations and prospect visits).
• Available sites and buildings are concentrated in the Fredericksburg sub-region. • There are only 2 certified sites in the region – both data center certified in Stafford County. • There are very few publicly owned/controlled sites in the region. • There is a limited selection of quality business sites meeting the industry standards for Manufacturing and Distribution/Logistics (priority industry clusters). • About 91 percent of the listed available office space is located in the Fredericksburg sub-region. • There is a limited selection of Class A office space available to support the professional, technical and scientific services priority industry cluster and these offices are concentrated in just two of localities. • Ninety percent of the VEDP site recommendations are in the Fredericksburg sub-region. • Almost three fourths of all site recommendations had manufacturing as a primary use.
4
• Fourteen percent of the site recommendations resulted in a decision for a Virginia location. • Sixty percent of the site recommendations never materialize because the prospect disengages. • Prospect visits mirror the trends of site recommendations in geographic distribution and primary use – concentration in the Fredericksburg sub-region and manufacturing as the dominant use. • Once a prospect visits the region, there is a one in three chance that it will choose a Virginia location. • There is a direct correlation between the availability of quality business sites and prospect activity from VEDP. • The greater the selection/distribution of prepared larger sites (above 50 acres) the greater the likelihood of prospect activity in the priority industry clusters, Manufacturing and Distribution/Logistics. • The greater selection/distribution of Class A office space, the greater the opportunity for expansion of the Professional, Technical and Scientific Services priority industry cluster.
Entrepreneurial Assessment. The Regional Entrepreneurial Assessment Project conducted by TEConomy in 2018 presents an analysis of the entrepreneurial ecosystem within the region and makes recommendations for activities that support five distinct program areas:
1) develop the entrepreneurial pipeline, 2) improve and expand high-growth startup programming, 3) improve and expand local-growth startup programming, 4) develop continuum of capital, and 5) focus on technology commercialization and industry engagement with regional R&D institutions. There was an identified need to expand entrepreneurial efforts both programmatically and geographically. Expansion of youth entrepreneurship programs, expanded
5
incubator/accelerator/co-working facilities, expanded SBDC services, additional business plan competitions and additional financial resources were among the many entrepreneurial services recommended by a regional entrepreneurship workgroup. There was also agreement that greater regional cooperation was needed to augment the delivery of entrepreneurship programs.
Investment Strategies and Recommendations. There were very minor changes recommended to the 2017 Vision, Goals and Objectives. Most of the suggested changes related to the strategies to guide the Mary Ball Washington Regional Council in the pursuit of the revised goals and objectives. These strategies were shaped by new state initiatives, additional empirical analysis, new policies of the GO Virginia Board, experience from funded projects, and progress made over the past two years.
The 24 recommended investment strategies are listed below within 6 category groupings (indicated by roman numerals).
I. Product (Sites and Buildings) Strategies: 1) Virginia Business Ready Sites Program – Increase the readiness rating of available business sites 2) Encourage Data Center Certification of Additional Sites 3) Development of Regional Business/Industrial Properties with Cost/Revenue Sharing Agreements a. Identify Regional Business/Industrial Sites b. Regional Industrial Facilities Authority c. Site Acquisition/Control d. Site Development 4) Speculative Office Building Development II. Workforce Development Strategies: 5) Realign Training and Education Programs to Meet Industry Requirements 6) Expand Work-Based Learning Programs 7) Educational Institution Partnerships with the Commonwealth Cyber Initiative
6
8) Occupational Career Paths for Priority Industry Cluster 9) Regional Workforce and Technical Centers Expansion III. Entrepreneurship Strategies: 10) Expand Youth Entrepreneurship Programs in K-12 and Community Colleges 11) Expand the Mary Washington Small Business Development Center Programs 12) Expand Innovation Centers Throughout the Region 13) Expand the Financing Resources Offered by the Rappahannock Economic Development Corporation 14) Create Opportunity Zone Funds 15) Conduct Business Plan Competitions 16) Expand Participating Intermediary Agreements IV. Business Scale-Up Strategies: 17) GENEDGE Technical Assistance 18) VEDP Export Assistance 19) Development of New Product Lines V. Broadband Infrastructure Strategies: 20) PamunkeyNet Implementation 21) Broadband Expansion though Public Private Partnerships VI. Water Based Economy Strategies: 22) Working Waterfront Development 23) Rural Virginia Coastal Community Enhancement Authority Implementation 24) Resiliency Innovation Center Establishment
Project Pipeline Analysis. - Both the state GO Virginia Board and Mary Ball Washington Regional Council recognize the challenges of applying for GO Virginia funding and have made policy changes that will increase the likelihood of more applications coming forward in the future. The state Board allows a portion of the per capita funding to be used as capacity building grants. The purpose of these grants is to undertake specific tasks that may be necessary to determine if a project is viable and provide necessary project
7
information for a GO Virginia grant. These capacity building grants have relaxed matching requirements.
The state board encourages the regions to become more proactive in marketing the GO Virginia program and assisting applicants in structuring proposals. Region 6 has instituted procedures that will assist applicants in preparing applications such as asking for a simple letter of intent (LOI) to begin the discussion of program policies between the applicant and the staff of the regional council. These early discussions help determine if the proposed project can realistically be a candidate for funding and the steps needed to prepare a competitive application.
The Region 6 Regional Council has recently instituted several policy changes that should increase the pipeline of projects over the next year. At the May 2019 meeting of the Council it approved three pipeline acceleration grants to each of the regional economic development organizations (REDO), Fredericksburg Regional Alliance, The Middle Peninsula Alliance and the Northern Neck Chesapeake Bay Partnership. These grants have as deliverables four letters of intent and two applications from each sub-region within the next year. Each application identified ideas or concepts for a number of projects that have the potential of becoming project applications.
Region 6 has had only part-time staff resources to devote to GO Virginia matters. The Regional Council filled an additional full-time position as of June 2019. This additional staff resource will allow the Regional Council to be more proactive in its approach to marketing the GO Virginia program and help shape the strategies into fundable projects.
In addition to the actions taken by the Region 6 Council, it is recommended that the Council take the following steps to further accelerate the transition from regional development strategies into funded projects:
• Use the flexibility granted by the state Board to fund a coordination function for entrepreneurship initiatives. The Mary Washington University Small Business Development Center (SBDC) is particularly suited and would likely be the most logical
8
organization to undertake this coordination function given their programmatic and geographic coverage over the region. • The Regional Council should adopt an affirmative policy related to the use of the capacity building grants. An affirmative statement by the Council identifying high priority strategies/concepts contained in this Plan that require further investigation would encourage potential applicants to seek financial and technical assistance from the Region 6 Council and staff. • One of the largest impediments to regional business/industrial site development is a clear understanding of how revenue sharing arrangements operate in the context of a Regional Industrial Facilities Authority (RIFA). It is recommended that the Regional Council facilitate a forum(s) for local elected officials on the principles of economic development revenue/cost sharing and RIFA structures.
9
Regional Economic Analysis
STAKEHOLDER ENGAGEMENT
The process of stakeholder engagement involved a series of stakeholder meetings that were held from May 15th to June 21st, 2019. Meetings were held with the chief administrative officers and Planning District Commission staffs of each of the three sub- regions, George Washington Region, Middle Peninsula, and Northern Neck. Meetings were held with the local economic development directors and regional economic development organizations in the Fredericksburg Regional Alliance and Middle Peninsula Alliance regions. Two additional meetings were held related to entrepreneurship and workforce development. The participants in the entrepreneurship and workforce development sessions were a combination of private sector, public sector, non-profit sector and institutions across the region. Over 60 individuals participated in the stakeholder discussion sessions.
A number of common themes emerged from the sessions:
Regional Economy Unchanged - The regional economy has not had much change since the Growth and Diversification Plan was prepared in 2017. The region is growing with the majority of that growth occurring in the northern portion of the region. Growth is also occurring in select areas of the region but not uniformly across the rural areas.
Out-Commuting Challenge – 60 percent of the workforce commutes out of the region daily to work. This situation is by far the largest economic development challenge facing the region. Growing employment within the region or providing ways to allow those commuters to work remotely are strategies to stem out-commuting.
Workforce Scarcity – Employers large and small are having a hard time finding workers to fill positions. Many employers are resorting to non-traditional measures to fill the vacancies.
10
Priority Sectors OK – The six priority industrial sectors identified in the 2017 Growth and Diversification Plan were still valid in 2019. There were several comments that the Seafood, Fishing and Aquaculture cluster should be expanded to capture a larger array of marine related businesses/industries. Several stakeholders mentioned that the healthcare and tourism are very important industry clusters to the region but since GO Virginia does not place a priority on those sectors the consensus was to retain the six clusters from the 2017 Plan.
Broadband – The lack of broadband service in the rural areas is still a major impediment to economic development. The current efforts to expand broadband service should continue to be a high priority and supported.
Limited Industrial Sites and Buildings – There is a lack of quality and variety of sites and buildings to support business expansion. The vast majority of the sites that are available in the region are concentrated in the northern portion of the region. Even then there are virtually no business sites that have a VEDP Business Site Readiness rating above a 3 on a five-point scale.
Entrepreneurial Program Expansion – There was broad consensus that entrepreneurial programs, assistance, facilities and capital access needed to be expanded throughout the region. Expansion of youth entrepreneurship programs, expanded incubator/accelerator/co-working facilities, expanded SBDC services, additional business plan competitions and additional financial resources were among the many entrepreneurial services recommended for the region. There was agreement that greater regional cooperation was needed to augment the delivery of entrepreneurial programs in the region.
Commercialization of Research - The advancement of commercialization of research at the Dahlgren Naval Surface Warfare Center, VIMS and other research facilities in eastern Virginia were important strategies for consideration.
11
Downtown Revitalization – A number of the downtowns in the region have embarked upon revitalization efforts. These efforts have stimulated not only the renovation of downtown properties but also the stimulation of new business activity in these commercial hubs. Efforts should be made to support these programs and expand them to other communities within the region.
Misalignment of Workforce Preparation – The education and workforce development programs in the region are not producing the quality or the skill sets needed by the employers in the region. The education and training providers need to adjust their program offerings to be more reflective of the occupations needed by regional employers.
Work- Based Learning – There needs to be a stronger linkage between employers and educational institutions in the region with an emphasis on work-based learning experiences. Such programs as apprenticeships, internships, career and technical education programs, etc. should be expanded throughout the region.
Greater Regional Cooperation- The local and regional governments and institutions all need to work more collaboratively to achieve economic progress. Establishing one or more Regional Industrial Facilities Authorities (RIFA) in the region to develop industrial sites and buildings was recommended. The establishment of a coordination function for entrepreneurship programs and workforce development programs were also recommended.
Industrial Hemp – Industrial hemp offers a potential for a significant new agricultural commodity. The potential types and uses of industrial hemp are not well known or understood by the farmers in the region. There is a need to conduct some research on the types of hemp that could be grown in the region, the various uses and markets for the hemp and how best to expedite the cultivation of the crop by area growers. Industrial hemp is a potential crop not only for region 6 but most of the rural areas of the state. A joint crop and market research project spanning several GO Virginia regions should be considered.
12
Opportunity Zones – The resent designation of 8 Opportunity Zones in the region offers an opportunity to increase private investment in these areas. The tax advantages afforded to private investors willing to invest in real estate and business in the zones should over time stimulate revitalization. There is the potential to coordinate GO Virginia investment with private Opportunity Zone Fund investments.
REGIONAL ECONOMIC TRENDS/CONDITIONS
This summary provides an overview of the empirical assessment conducted my Mangum Economics of the economic and labor market conditions within GO Virginia Region 6 in June of 2019. The full report is available from the George Washington Regional Commission. The report updates the empirical analysis that was conducted in 2017 as the basis for the Growth and Diversification Plan. The principal findings from that assessment are as follows:
Regional Economy
In recent years, employment and wage growth in GO Virginia Region 6 has been largely consistent with statewide trends. However, there are significant differences in the performance and composition of the economies of the three Planning Districts (PDCs) that comprise Region 6 – George Washington, Middle Peninsula, and Northern Neck.
The private sector accounts for a smaller proportion of total employment in Region 6 than is typical for Virginia. In 2018, private sector employment accounted for 76 percent of total employment in Region 6 as a whole, 76 percent in the George Washington PDC, 78 percent in the Middle Peninsula PDC, and 77 percent in the Northern Neck PDC as compared to 82 percent statewide in Virginia.
Region-wide, total private employment growth in Region 6 was identical to that of the state as a whole over the last five years – 7.4 percent in Region 6 as a whole, 8.1 percent in the George Washington PDC, 5.8 percent in the Middle Peninsula PDC, and 3.6 percent in the Northern Neck PDC as compared to 7.4 percent statewide in Virginia.
13
Region-wide, private sector average weekly wage growth in Region 6 grew was a little below the statewide average over the last five years – 9.8 percent in Region 6 as a whole, 9.4 percent in the George Washington PDC, 10.4 percent in the Middle Peninsula PDC, and 12.5 percent in the Northern Neck PDC as compared to 10.1 percent statewide in Virginia.
Private sector average weekly wages in Region 6 are below the statewide average. In 2018, private sector average weekly wages were $806 in Region 6 as a whole, $840 in the George Washington PDC, $682 in the Middle Peninsula PDC, and $713 in the Northern Neck PDC as compared to $1,113 statewide in Virginia.
Over the one year period from 2017 to 2018, the three industry sectors in Region 6 with the largest employment growth were: 1) Professional, Scientific, and Technical Services (up 739 jobs), 2) Other Services (up 474 jobs), and 3) Health Care and Social Assistance (up 438 jobs). While the three industry sectors with the largest employment losses were: 1) Manufacturing (down 289 jobs), 2) Wholesale Trade (down 132 jobs), and 3) Construction (down 96 jobs).
Over the five-year period from 2013 to 2018, the three industry sectors in Region 6 with the largest employment growth were: 1) Accommodation and Food Services (up 1,600 jobs), 2) Transportation and Warehousing (up 1,576 jobs), and 3) Other Services (up 1,461 jobs). While the three industry sectors with the largest employment losses were: 1) Wholesale Trade (down 612 jobs), 2) Information (down 407 jobs), and 3) Utilities (down 28 jobs).
Economic Drivers
GO Virginia Region 6 is home to a large and diverse number of high-performing industries. We assessed the relative economic performance of specific industries within Region 6 using a Composite Economic Performance Index that took into account each industry’s relative employment footprint, short-term and long-term employment growth, short-term and long-term wage growth, industry wage as a proportion of the average wage for the region, proportion of industry output exported out of Region 6, and employment multiplier.
14
That analysis identified 82 industries within Region 6 that exhibited a Composite Economic Performance Index that was above the median for the region and 41 industries that performed in the upper quartile.
Since the 2017 Growth and Diversification Plan was adopted the following are key changes in the regional economy:
• In 2017 Employment growth in Region 6 exceeded the statewide trend. Now, employment growth has fallen to the statewide trend and may be decelerating below it. • Employment growth in the PDC’s was accelerating and converging. Now it is decelerating and diverging. • In 2017 wage growth was exceeding the statewide trend. Now that gap has closed. • In 2017 Transportation and Warehousing; Administrative Support and Waste Management; and Construction led employment growth then. • Now, Professional, Scientific, and Technical Services; Other Services; and Health Care and Social Assistance lead employment growth. • The regional economic driver industries in 2019 are similar to those identified in 2017 and support the clusters identified two years ago.
Workforce Gaps
Our gap analysis of potential shortfalls in the pipeline of completers graduating from regional post-secondary education programs in Region 6 relative to the occupation-driven demand for trained workers from those programs showed that many of the identified gaps pertained to occupations that typically require a baccalaureate degree, and this is largely attributable to the fact that there is only one four-year degree granting post-secondary education institution in Region 6 – Mary Washington University.
However, in some instances, particularly in middle-skill occupations that require a less than a two-year, post-secondary certificate, there were identified gaps:
• Automotive Service Technicians and Mechanics,
15
• Bus and Truck Mechanics and Diesel Engine Specialists, • Dental Assistants, • Electrical Power-Line Installers and Repairers, • Electricians, • Heating, Air Conditioning, and Refrigeration Mechanics, • Heavy and Tractor-Trailer Truck Drivers, • Industry and Machinery Mechanics, • Physical Therapist Assistants, and • Plumbers, Pipefitters, and Steamfitters
Forward-Looking Data
The analysis of forward-looking data looked at business start-up and scale-up activity drawn from the heavily from the TEConomy Partners report, Regional Entrepreneurial Assessment Project and a separate analysis of VEDP sites and buildings data as compared to VEDP prospect recommendation/visitation data. The full analysis of the business start-up and scale-up activity is contained in the Empirical Assessment report prepared by Mangum Economics. The full analysis of sites/buildings related to prospect activity is contained in Appendix B.
The TEConomy analysis of the entrepreneurial activity showed that:
• The share of the working-age population with at least a bachelor’s degree in Region 6 grew by 17 percent between 2012 and 2017, which was significantly faster than the 10 percent growth rate for the state as a whole or the 12 percent growth rate for the entire United States. • The rate of new business formation in Region 6 is very close to the state average – 8 percent in 2017 as compared to 9 percent statewide. • Start-up activity differs across Region 6. The area covered by the George Washington Regional Commission has a high concentration of startup employment in Research and Development, Engineering and Technical Services, and Manufacturing. Both the Middle
16
Peninsula and Northern Neck PDCs have high concentrations of startup employment in Agriculture, Food Processing, Natural Resources, and Finished Products. • Most patents issued in Region 6 are to government organizations.
PRIORITY HIGH PERFORMANCE INDUSTRY CLUSTERS
The 2017 Region 6 Growth and Diversification Plan analyzed the industry base within the region using an eight-factor Economic Performance Index. That process identified 16 high- performance industry clusters in the Mary Ball Washington Region: • Agriculture (including Aquaculture and Forestry) • Education • Finance and Insurance • Information • Manufacturing of Computer and Electronic Equipment • Manufacturing of Fabricated Metal and Machinery Products • Manufacturing of Food and Beverage Products (including Seafood • Manufacturing of Miscellaneous Products • Manufacturing of Plastics, Rubber, and Nonmetallic Mineral Products • Manufacturing of Wood Products and Paper • Mining and Quarrying • Professional, Scientific, and Technical Services and Management of Companies • Tourism • Transportation and Warehousing • Utilities • Wholesale Trade
These 16 high performance industry clusters were then consolidated into 6 Priority Industry Clusters:
• Aquaculture/Seafood/Commercial Fishing • Forestry/Wood Products and Paper
17
• Manufacturing • Distribution/Logistics • Information/Data Centers • Professional, Scientific and Technical Services
This Plan update again analyzed industrial performance using the eight-factor Economic Performance Index. Table 1 illustrates those industries that are in the 90th percentile using the Index. Industries within the Forestry/Wood Products and Paper, Manufacturing and Distribution/Logistics Priority Industry Clusters comprise half of the 90th percentile industries. Additional analysis of the industry sectors is contained in the Empirical Analysis prepared by Mangum Economics.
Table 1. Industries performing at the 90th percentile and above in Region 6* Industry P Index Percentile Remediation and Other Waste Management Services 125.5 100 Specialized Freight Trucking 121.7 99 Architectural, Engineering, and Related Services 121.3 99 Sawmills and Wood Preservation 120.7 98 Charter Bus Industry 117.7 98 Oilseed and Grain Farming 112.1 97 Independent Artists, Writers, and Performers 111.7 96 Other Professional, Scientific, and Technical Services 111.7 96 Residential Building Construction 110.8 95 RV (Recreational Vehicle) Parks and Recreational Camps 110.4 95 Support Activities for Road Transportation 109.6 94 Other Financial Investment Activities 109.5 93 Gasoline Stations 107.5 93 Other Heavy and Civil Engineering Construction 107.3 92 Couriers and Express Delivery Services 106.7 91 Lumber and Other Construction Materials Merchant Wholesalers 106.1 91 Management, Scientific, and Technical Consulting Services 105.2 90 Land Subdivision 104.3 90 * Green - Forestry, Wood Products and Paper Industry Cluster * Orange - Distribution and Logistics Industry Cluster * Yellow - Professional, Scientific and Technical Services Industry Cluster
18
Note that the Professional, Scientific and Technical Industry Cluster has rebounded from the federal government sequester that dampened the employment in that cluster in 2017. This sector has shown marked improvement since 2017 particularly in the Fredericksburg area.
The Empirical Assessment conducted by Mangum Economics revealed that the regional economic driver industries in 2019 are similar to those identified in 2017 and support the priority industry clusters identified in the 2017 Growth and Diversification Plan.
During the stakeholder engagement process there was general agreement that the six Priority High Performance Industry Clusters should remain the same with the addition of marine related industries to the aquaculture/seafood/commercial fishing cluster. Marine related industries use many of the same support services and suppliers and are directly related to the many of the functions of the aquaculture, seafood and commercial fishing businesses. Based upon this feedback the following are recommended as the Priority Industry Clusters for the 2019 Growth and Diversification Plan Update:
• Aquaculture/Seafood/Commercial Fishing/Marine Industries • Forestry/Wood Products and Paper • Manufacturing • Distribution/Logistics • Information/Data Centers • Professional, Scientific and Technical Services
WORKFORCE GAPS ANALYSIS
The workforce gaps analysis was conducted by Mangum Economics as a component of the Empirical Assessment that is available through the George Washington Regional Commission. The analysis compared the occupation-driven demand for trained workers in GO Virginia Region 6 to the pipeline of completers graduating from regional post- secondary education programs, identifying potential gaps between the two.
19
The estimate the occupation-driven demand for trained workers in Region 6 was derived from the most recent sub-state occupational employment projections from the Virginia Employment Commission. According to those projections, between 2014 and 2024 Region 6 will experience approximately 5,980 job openings each year.
The 2017-18 completions data from the U.S. Department of Education’s IPEDS Data Center was used to estimate the regional supply of completers from education and training programs.
In general, the Mary Ball Washington Region has a sufficient available regional labor pool to support the high-performance industry clusters identified in the cluster analysis. However, potential shortfalls exist in some middle skill occupations.
The analysis of regional occupational employment showed that the available regional labor pool exceeded current employment in each of the identified high-performance industry clusters. However, there were two cases where that margin was noticeably narrower.
In the Professional, Scientific, Technical Services, and Management of Companies cluster, there were limitations in the regional labor pool available to certain industries within the cluster. Specifically, the Custom Computers Programming Services, Computer System Design Services, and Other Computer Related Services industries.
In the Transportation and Warehousing industry cluster, there were limitations in the regional labor pool available to certain industries within the cluster. Specifically, the Truck Transportation industry.
Many of the gaps identified pertain to occupations that typically require a baccalaureate degree. The primary reason for these gaps is there is only one four-year degree granting post-secondary education institution in Region 6 – University of Mary Washington. In all likelihood, graduates from higher education institutions that are outside of the region would actually fill many of these identified shortfalls.
20
There are gaps, particularly in “middle-skill” occupations, that require a two-year post- secondary certificate or less. Those occupations are:
• Automotive Service Technicians and Mechanics • Bus and Truck Mechanics and Diesel Engine Specialists • Dental Assistants • Electrical Power-Line Installers and Repairers • Electricians • Heating, Air Conditioning, and Refrigeration Mechanics • Heavy and Tractor-Trailer Truck Drivers • Industry and Machinery Mechanics • Physical Therapist Assistants • Plumbers, Pipefitters, and Steamfitters
Mary Washington University, even though a liberal arts university, has stepped forward to assist in educating workers in the high-demand cyber security industry. Mary Washington University was granted funding from GO Virginia to institute a cyber security certification program – Certified Information Systems Security Professional.
Germanna Community College applied for GO Virginia funding of an expanded apprenticeship program serving the Region 6 localities within its service area. The Region 6 Council approved the application, but the State GO Virginia Board had questions related to the application and did not take action to approve the application. Germanna Community College should be encouraged to revise the application and resubmit it to GO Virginia.
The stakeholder work group on workforce development issues recommended that there be a stronger emphasis on work-based learning experiences starting with programs in the local school divisions and continuing through the community college and university systems. Programs such as apprenticeships, internships, career and technical education and credentialing are all based on work-based learning experiences. The exposure to in-
21
demand career options should start in middle school and continue with work-based skills development in high school and continue on in higher education institutions.
Because of the very low unemployment, most all employers in the region are having difficulty filling vacant positions. Many employers have resorted to a variety of novel techniques to recruit employees even lowering entrance standards and recruiting non- traditional workers.
If the region is to be able to expand the priority industry clusters, an aggressive effort will need to be made to demonstrate that there is an adequate supply of qualified workers to fill positions within those industries. One of the central questions that employers ask when considering expanding is, “Do you have the workers necessary to support my business?”
Region 6 has a very large proportion of its workers that commute out of the region each day for employment – approximately 60 percent. Roughly 56 percent of the workforce in the Fredericksburg region out-commute, mostly to Northern Virginia. The Middle Peninsula has the largest percentage of out-commuting, 74 percent, of any region in the Commonwealth. The Northern Neck is not far behind with 66 percent of its workers out- commuting.
Table 2. Region 6 Commuting - 2014 Percent Out- Region Live and Work in Area Out-Commuters Total Workers Commuters GWRC 62,201 78,012 140,213 55.64% Middle Peninsula 11,825 33,902 45,727 74.14% Northern Neck 7,718 14,817 22,535 65.75%
Stemming the flow of out-commuters form the region and encouraging those workers to work close to home is the biggest economic development challenge facing the region. Working remotely, enticing out-commuters to accept local employment or encouraging the out-commuters to establish their own businesses are the three main strategies that will reduce out-commuting.
22
The George Washington Regional Commission was awarded a capacity building grant from the Regional Council to prepare a regional economic development plan. As a part of the grant is an update to a commuter study that was conducted by Mary Washington University several years ago. This study will provide greater insights into the characteristics of the out-commuters. Hopefully, this information will allow for more targeted strategies to attract those out-commuters to work within the Region.
SITES, BUILDINGS, PROSPECT RECOMMENDATIONS AND PROSPECT VISITS ANALYSIS
The purpose of this analysis is to study the availability of business real estate, “product”, (sites and buildings) and prospect activity as reported by Virginia Economic Development Partnership (VEDP). The analysis presents data at the GO Virginia regional level, economic development region and locality level. The consultants were able to obtain a database from VEDP that contains the details of prospect recommendations and prospect visits for the years 2014 to 2018. In addition, data related to available sites and buildings was taken from the VEDP VirginiaScan website in May of 2019. The data for some of localities was not available in these databases and is noted in the relevant sections of this analysis.
The following are the primary findings and conclusions form the analysis of VEDP data on available sites and buildings for business expansion/location and VEDP prospect activity, site recommendations and prospect visits.
• Available sites and buildings are concentrated in the Fredericksburg sub-region. • There are only 2 certified sites in the region – both data center certified in Stafford County. • There are very few publicly owned/controlled sites in the region. • The Manufacturing and Distribution/Logistics (priority industry clusters) typically require larger sites with utility service (water, sewer and gas) – there is a limited selection of quality business sites meeting these industry standards. • Almost 91 percent of the available listed office space is located in the Fredericksburg sub-region.
23
• Professional, Technical and Scientific Services (priority industry cluster) businesses typically require quality office space – there is a limited selection of Class A office space available in the region and those offices are concentrated in just two of localities in the Fredericksburg area. • Ninety percent of the VEDP site recommendations are in the Fredericksburg sub-region. • Almost three fourths of all site recommendations had manufacturing as a primary use. • Fourteen percent of the site recommendations resulted in a decision for a Virginia location. Sixty percent of the site recommendations never materialize because the prospect disengages. • Prospect visits mirror the trends of site recommendations in geographic distribution and primary use – Fredericksburg sub-region concentration and manufacturing use dominant. • Once a prospect visits the region, there is a one in three chance that it chooses a Virginia location. • There is a direct correlation between the availability of quality business sites and prospect activity from VEDP. • The greater the selection/distribution of prepared larger sites (above 50 acres) the greater the likelihood of prospect activity in the priority industry clusters, manufacturing and distribution/logistics. • The greater selection/distribution of Class A office space the greater the opportunity for expansion of the professional, technical and scientific services priority industry cluster.
ENTREPRENEURIAL ECOSYSTEM
The Regional Entrepreneurial Assessment Project conducted by TEConomy in 2018 presents an analysis of the entrepreneurial ecosystem within the region and makes some recommendations for activities that support five distinct program areas; 1) develop entrepreneurial pipeline, 2) improve and expand “high-growth” startup programming, 3) improve and expand “local-growth” startup programming, 4) develop continuum of capital, and 5) focus on technology commercialization and industry engagement with regional R&D institutions. A complete summary of the report is contained in Appendix B.
24
This analysis was supplemented by a stakeholder work session that brought together a range of entrepreneurial support organizations, business capital providers and private businesses to address how to strengthen the entrepreneurial ecosystem. The work session reviewed the Regional Entrepreneurial Assessment Project findings and recommendation along with the entrepreneurial recommendations of the 2017 Growth and Diversification Plan. A more complete discussion of the work session’s results can be found in Appendix A.
The broad consensus among the work session participants was that entrepreneurial programs, assistance, facilities and access to capital needed to be expanded throughout the region. The entrepreneurial expansion needed to be both programmatically and geographically since there are significant gaps in types of services available and access to those services. Expansion of youth entrepreneurship programs, expanded incubator/accelerator/co-working facilities, expanded SBDC services, additional business plan competitions and additional financial resources were among the many entrepreneurial services recommended for the region. There was agreement that greater regional cooperation was needed to augment the delivery of entrepreneurial programs in the region.
It is recommended that the region take advantage on the GO Virginia Board’s policy to allow for expenditure of the per capita funds to support the development of a detailed plan for the expansion of entrepreneurial programs/services across the region. The Mary Washington Small Business Development Center is likely the best organization to prepare the plan since it provides the broadest array of entrepreneurial services, has the greatest geographic coverage and had long standing relationships with other entrepreneurial service providers.
25
Table 3 table lists the consolidated strategies/actions recommended by the TEConomy report and 2017 Growth and Diversification Plan. The TEConomy report lists a larger number of actions but there is considerable overlap between the two documents.
Table 3. Entrepreneurial Strategies Growth and TEConomy Strategy Action Diversification Report Plan 2017 Entrepreneurial Pipeline 1) Expand youth entrepreneurship programs in schools X X 2) Establish student Internships with start-up companies X 3) Entrepreneurship events in schools X "High Growth" Startup Programs 4) Identify "high growth" start-up companies X 5) Fill resource gaps X X 6) Expand "incubator/accelerator" facilities X 7) Expand mentorship programs X 8) Increase angel investor programs X 9) Expand networking opportunities X "Local Growth" Programs 10) Expand peer-to-peer networks X X 11) Host additional networking events X 12) Expand SBDC network of services X 13) Aspiring entrepreneurial referral service X 14) Expand GENEDGE and export programs X Capital Access 15) Link entrepreneurs to micro loan programs X 16) Link successful startups to existing micro loan X programs 17) Feature financial resources at networking events X Technology Commercialization 18) Create technology councils X 19) Establish Entrepreneurship programs at research X X institutions 20) Engage entrepreneurial researchers in technology X councils 21) Make technology commercialization a part of "high X X growth" initiative
26
FUNDED PROJECTS
The Mary Ball Washington Regional Council has approved projects that address the investment strategies contained in the 2017 Growth and Diversification Plan and are aligned with the funding priorities of the GO Virginia Board. The following is a listing of projects that have been recommended/funded in Region 6 and the investment strategy they address.
Broadband Infrastructure – A high priority of the Growth and Diversification Plan is the expansion of high-speed Internet service for business expansion in underserved areas of the region. • Pamunkey Net is a project sponsored by the Middle Peninsula Alliance to develop a business plan for an Internet provider that would be an affiliate organization to the Pamunkey Indian Nation located in King William County. The project has most of the regions localities as participating partners. The project documents the business case and process for serving the underserved areas of the region. Implementation funding is expected to come from non-GO Virginia sources.
Industrial Sites and Buildings – The Growth and Diversification Plan identified a deficiency in the array of industrial sites and building appropriately located and with the prerequisite infrastructure. VEDP is in the process of conducting a statewide assessment of select industrial sites and rate those sites against their 5 tier Business Ready Sites Program criteria. • Northern Neck Site, Building and Infrastructure – The Northern Neck Planning District Commission was awarded a capacity building grant to conduct assessments of industrial sites based upon the 5 tier VEDP Business Ready Site criteria, review the water and sewer service serving commercial areas and evaluate the potential of a regional industrial/business site. • Middle Peninsula Business Site Readiness – The Middle Peninsula Alliance was awarded a capacity building grant to conduct assessments of industrial sites based upon the 5 tier VEDP Business Ready Site criteria. The site assessments will be in addition to the sites that VEDP is planning to evaluate this fall. An assessment of select
27
waterfront sites potential owned by the Middle Peninsula Public Access Authority was also included in the application. • Westmoreland Flex Building – Westmoreland County was awarded a capacity building grant to investigate the feasibility of developing a publicly-owned flex office building on a parcel in the Town of Montross.
Workforce Development – The Growth and Diversification Plan identified workforce gaps in the delivery of education/training needed to fill projected occupations in the high- performance industry clusters. The institutions of higher education, Mary Washington University, Germanna Community College and Rappahannock Community College have all been partners to workforce development project proposals to address the identified training needs. • Cyber Security Certification Program – The University of Mary Washington was awarded a grant to implement a training program leading to Certified Information Systems Security Professional (CISSP). The CISSP certification is a high-demand occupational certification in the rapidly expanding cyber security industry. • Apprenticeship Network – Germanna Community College applied to expand their apprenticeship program in the Fredericksburg area. The Regional Council approved the application and forwarded it on to the GO Virginia Board. While the GO Virginia Board was supportive of expanding apprenticeship programs it had concerns about some of the provisions in the application and has not acted on the application. • Welder Training – Westmoreland County in partnership with Rappahannock Community College (RCC) was awarded a grant to establish a welder training facility and program in a renovated building in Montross. The training program was tailored to provide skilled welders to Carry-On Trailer and other employers in the region. The RCC training has produced welders not only for Carry-On but for several employers in the area and RCC is considering expanding the type of training offered. Resiliency – The eastern portion of Region 6 is at high risk of sea level rise, increased flooding and damage from extreme weather patterns. Other regions and similar low-lying areas around the world are facing similar threats. The Virginia Institute of Marine Science and numerous institutions in Coastal Virginia are developing innovative solutions to
28
mitigate these conditions. Many of these innovations have the potential to be business led solutions that can be used across the planet. • Virginia Sea Grant Resiliency Planning – The Virginia Sea Grant Program at VIMS was awarded a capacity building grant to consult with researchers, private sector experts and resiliency experts from around the country to determine those resiliency practices that have the greatest potential for commercialization and deployment in rural coastal environments similar to the eastern portion of Region 6.
Regional Economic Development Plan – The George Washington Regional Commission is the only sub-region that does not have an adopted regional economic development plan outlining the strategies for expanding the Fredericksburg area economy. In addition, the region lacks quantitative information on the most significant issue facing the region, workers leaving the region to work in northern Virginia. • Good Jobs Here – The George Washington Regional Commission was awarded a capacity building grant to develop a regional economic development plan in partnership with the Fredericksburg Regional Alliance. As a part of that effort is an out- commuter study is being conducted by the University of Mary Washington to update the commuter study conducted several years ago. This analysis will provide insights into the characteristics of the commuting population and will help in developing strategies to stem the tide of out-commuting.
Project Pipeline – The Regional Council has only had a few projects request grant funding over the last two years. While there are a number of concepts for project proposals these concepts are not at a stage where they are ready to begin the application process for GO Virginia grant funding. In order to accelerate the process of converting a potential concept into a fundable application the Regional Council solicited proposals from consultants to work on potential project concepts developing them to a stage where “letters-of-intent” are submitted and GO Virginia funding applications filed. • Regional Economic Development Organization Grants – The three regional economic development organizations, Fredericksburg Regional Alliance, Middle Peninsula Alliance and Northern Neck Chesapeake Bay Region Partnership, have each
29
been awarded grants to work with potential applicants to submit at least 4 letters-of- intent and 2 project applications over the next year from each sub-region.
30
Investment Strategies and Recommendations
DESIRED OUTCOMES
The vision established for the 2017 Growth and Diversification Plan is a statement that expresses the characteristics of what the region desires to become. The vision statement is aspirational and becomes the basis for establishing goals and objectives for a prosperous future and guides the development of strategies for increasing the rate of growth of higher- paying jobs across the region. The modifications to the vision are highlighted in blue.
Vision 2027
The continued growth and expanded employment base in the Mary Ball Washington Region has resulted in the region being designated a Metropolitan Statistical Area by the US Bureau of the Census. The Region has been able to leverage this designation, its unique location (between our nation’s Capital, the Virginia State Capital and the Port of Hampton Roads) and the presence of numerous military and security installations to having one of the highest concentrations of professional service firms in the nation. While the region is known for professional service firms supporting defense, security and marine interests it has been able to expand other high-wage sectors such as data centers and advanced manufacturing. These businesses pay some of the highest wages in the Commonwealth and have resulted in stemming the out-commuting to neighboring areas. Regional businesses have been able to commercialize cutting-edge technologies and processes developed for military or security use and pioneered by Virginia’s Institute of Marine Science. The region’s educational and workforce development institutions have been able to continually adjust their programs to meet the ever-changing needs for advanced skills-based jobs throughout the region. While most of the growth has occurred in the Fredericksburg area, along the I-95 corridor, the rural areas of the Northern Neck and Middle Peninsula have benefited from the diversification, specialization and modernization of their natural resource-based industries. The deployment of a high-speed broadband network across the region has supported the creation of numerous small technical and professional businesses
31
throughout the region. The region’s trove of national historical sites and abundant coastal amenities continues to support an ever-expanding tourism industry.
Goals and Objectives
The following set of goals was included in the 2017 Growth and Diversification Plan to provide direction necessary to achieve the Vision 2027 for the region. These goals are the desired outcomes/results needed to fulfill the vision and establish the direction for the regional economic development efforts well into the future. These goals are the foundation for investment of GO Virginia resources in projects throughout the region. Specific objectives have been established for each goal. These objectives establish measures of achievement in accomplishing the goals. The goals were modified slightly to reflect changes over the last two years. The modifications are highlighted in blue.
Goal 1: Accelerate the creation and expansion of businesses in identified high performance industry clusters throughout the region including: • Aquaculture/Seafood/Commercial Fishing/Marine Industries, • Forestry/Wood Products and Paper, • Manufacturing, • Distribution/Logistics, • Information/Data Centers and • Professional, Scientific and Technical Service Objectives: • Professional Services Cluster – Add 10 new firms annually – Increase employment 2 percent or 200 jobs annually • Distribution and Logistics Cluster – Add 2 firms annually – Increase employment by 2 percent or 150 jobs annually • Information/Data Centers Cluster– Add 1 firm annually – Increase employment by 2 percent or 10 jobs annually • Manufacturing Cluster – Add 1 firm annually – Increase employment by 50 jobs annually
32
Goal 2: Steadily increase the average wages of workers to above the State’s average. Objectives: • Add 600 new higher-wage workers to the region’s economy annually. • At least 60 percent of the new employment added to the economy will be “higher” wage jobs.
Goal 3: Expand, diversify and modernize the high-performance natural resource- based industries throughout the region. Objectives: • Seafood/Aquaculture/Commercial Fishing/Marine Industries Cluster – Increase employment by 5 percent or 40 employees annually – Stimulate new private investment of $2 million annually • Forestry, Wood Products and Paper Cluster – Increase employment by 3 percent or 30 employees annually – Stimulate new private investment of $4 million annually
Goal 4: Provide an adequate supply of appropriately trained and educated workers for the employers in the identified high-performance industry clusters. Objectives: • Biannually conduct a five-year projection of the annual anticipated supply gap for occupations in the high-performance industry clusters. • Develop or modify the training and education programs to meet the occupational gaps. • Recruit workers in those select occupations where training programs within the region are not able to fill the gaps. • Continually retrain workers in the priority high performance industry clusters to meet modern day training and education requirements.
33
Goal 5: Reduce the number and percentage of works commuting to higher-paying jobs in neighboring metropolitan areas. Objectives: • Reduce the approximately 115,000 out-commuters from the region by 10,000 over the next 10 years. • Reduce the approximately 60 percent of the workers commuting out of the region by 5 percent over the next 10 years. • Provide telework and co-workspace opportunities at numerous locations throughout the region.
Goal 6: Provide reliable and affordable high-speed broadband services to all areas of the region meeting the needs of modern high-performance industry sector employers. Objectives: • Establish a broadband Internet provider that will provide high-speed Internet service to underserved areas of the region. • Reduce the underserved broadband customer base by 5 percent annually. • Continually upgrade the existing broadband service to the most modern standards of the target industry clusters.
Goal 7: Increase tourism expenditures and employment above the State average annual increase. Objectives: • Increase tourism expenditures by 3 percent annually over the next 5 years. • Increase tourism employment by 3 percent annually over the next 5 years. • Create 5 new businesses in tourism or tourism related businesses annually. • Generate 100 new higher-paying jobs in tourism or tourism related businesses annually.
34
INVESTMENT STRATEGIES AND RECOMMENDATIONS
The following narrative describes a series of strategies to guide the Mary Ball Washington Regional Council in the pursuit of the slightly revised goals and objectives. These strategies build upon the strategies outlined in the 2017 Growth and Diversification Plan, new state Initiatives and experience over the past two years. If these strategies are implemented with proper funding, they should achieve the goals and objectives outlined in this Plan and GO Virginia. These strategies/recommendations will serve as guidance to potential project sponsors in the development of proposals for funding. These recommendations will also serve as a guide in the evaluation and review of funding requests to the Mary Ball Washington Regional Council.
The strategy recommendations provided in this section are presented to strengthen each of the following six categories of strategies.
1) Product (Sites and Buildings), 2) Workforce Development, 3) Entrepreneurship, 4) Business Scale-Up, 5) Broadband Infrastructure, and 6) Water-Based Economy.
Product (Sites and Buildings)
The Businesses, large or small, require suitable facilities to conduct their business. If a suitable site or building meeting the requirements of a priority industry sector business, it will be forced to locate elsewhere or operate in substandard facilities. Each identified priority industry cluster typically has specific requirements related to location; transportation access, available utilities, parcel size, building type/size, etc. As an example, the site requirements for a large manufacturer are much different than the requirements of a small professional services business. It is imperative that a region have an adequate supply of various types, sizes and locations of sites and buildings meeting the location
35
requirements of new and existing businesses in the priority industry clusters. These sites and buildings must be able to meet minimum quality standards, utilities, location, access, physical characteristics, etc. of the priority industry cluster and should be geographically dispersed throughout the region.
Because of the costs of development of industrial parks and the regional impact of these facilities many regions/localities are joining together to share the costs and benefits of the development of regional industrial parks.
Strategies:
1. Virginia Business Ready Sites Program – Increase the readiness rating of available business sites – VEDP is in the process of assessing many of the industrial sites in Region 6 against the 5-tier Business Ready Classification System. The Middle Peninsula Alliance and Northern Neck PDC have been awarded capacity building grants to assess many of the remaining sites in those regions. The Fredericksburg Regional Alliance (FRA) in cooperation with their local economic development offices has conducted site audits on several sites within their region. None of the sites that have been assessed have rated above a 3 on the 5-tier scale. It is recommended that the more marketable sites in each sub-region be brought up to “Tier 5 Business Ready” level. 2. Encourage Data Center Certification by Dominion Energy of additional sites – There are 2 Dominion certified data center sites located in Stafford County Data Center Site at Quantico and Quantico Corporate Center at Stafford. It is recommended that Dominion Energy designate additional sites throughout the FRA region as certified data centers. 3. Encourage the development of regional business/industrial properties with cost/ revenue sharing agreements - The FRA area has identified several industrial sites that have the potential to be regional industrial sites. The Middle Peninsula Alliance and the Northern Neck Chesapeake Bay partnership are now in the process of assessing potential sites within their sub-regions as potential regional industrial sites. Once these assessments have been complete each sub-region should select one or more sites for development by a regional organization such as a Regional Industrial Facilities
36
Authority (RIFA). The following are recommended steps in the process of establishing regional industrial sites throughout the region. a. Identify regional business/industrial sites – Current efforts are under way in each of the sub-regions to identify the most appropriate sites for a regional industrial park. b. Regional Industrial Facilities Authority - Typically, businesses in the Manufacturing, Logistics/Distribution and Information/Data Center clusters require fairly large “shovel ready” sites that allow room for expansion. Most of the developable business/industrial sites in the region are concentrated in the northern portion of the region, FRA. The quality/suitability of these available sites varies from greenfield sites, without water and sewer, to those that have full complement of utilities. GO Virginia has established a priority for funding the development of regional industrial sites. There is only one industrial site in the region that has a regional organization and revenue sharing agreement, West Point Regional Airport. Even this site is limited in size and lacks the necessary infrastructure to support additional development. One of the first steps in the development of a regional industrial site is the creation of a regional entity to develop an industrial site with a revenue sharing agreement such as a Regional Industrial Facilities Authority (RIFA). Each sub-region, Fredericksburg area, Middle Peninsula and Northern Neck, are encouraged to establish a RIFA to assist with the development of one or more large industrial sites within that sub- region. c. Site Acquisition/Control – There are few “publicly-owned” sites in the region that can support manufacturing, logistics/distribution and data center development. If Region 6 is to be competitive with other regions across the Commonwealth it will have to increase the supply of quality industrial sites that have public site control through local Economic Development Authorities or regional organizations. The current efforts to evaluate the existing inventory of industrial sites based upon the VEDP 5-tier Business Ready Sites Program criteria will identify those sites that have the greatest potential for development and the cost of that development. Each sub-region should proceed with gaining
37
site control, option to purchase, acquisition, etc., over the most promising of the regional industrial sites. d. Site Development – Once the sub-regions have gained site control of the most promising regional industrial sites they can then precede with the development of the sites. Initially, a number of engineering, environmental and planning studies would need to determine the specific design and cost factors for each regional industrial site. Once all of the design and cost parameters have been determined the physical development of the sites can move forward. 4. Speculative Office building - Cooperation agreement exploration - Westmoreland and others There has been a demonstrated interest from individuals and small firms that wish to start or grow their own professional service business. The success of Eagle Works in Fredericksburg has demonstrated the potential for growing small businesses in the professional services and technology sectors. The experience of these facilities indicates that, multi-tenant office space that provides offices as small as 200 sq. ft. with a complement of amenities and services would accelerate the growth of these small businesses. Because of the sensitivity of their work and security issues, offices configured with privacy with doors and special security features are preferred. It is recommended that the inventory of office buildings be developed throughout the region that offers Class “A” and small offices for lease, with a complement of amenities and services for the tenants. These facilities would complement a network of telework centers, incubators or accelerators.
Workforce Development
Sixty percent of the region’s workforce commutes out of the region every day to go to work. A study by the University of Mary Washington indicates that the vast majority of those commuters are employed in occupations directly related to the identified growth sectors in the region. The challenge for the region is to develop strategies that will allow these commuters to work closer to home. The lower wage rates paid in the region are a deterrent to luring these commuters to work in the region illustrating the need for higher wage
38
employment opportunities. Studies indicate that these commutes may be willing to take a 15 percent to 20 percent reduction in pay to have a richer quality of life with less commuting.
Several participants in the stakeholder meetings indicated that there is a mismatch between the skills required by employers and the training and education received by the local institutions. Students also did not have a firm grasp of the world of work and the requirements of the workplace. Employers indicate that the youth coming out of our school systems today had insufficient exposure to the world of work and are unprepared for the demands of the work environment. Greater engagement and exposure of students with businesses during the academic year would assist in orienting students to the expectations of the work environment.
Indications are that most all employers in the region are having difficulty hiring workers. Some of the common reasons given are the inability to pass drug tests, the lack of “soft skills” (work habits, appearance, communication skills, etc.) and the lack of technical skills.
The region has only one four-year institution of higher education, the University of Mary Washington. The University of Mary Washington is a liberal arts university with a limited compliment of degrees in scientific and technical occupations. Thus, the demand for many of the higher-level occupations that require a four-year degree must be met through recruitment form outside the region. The two community colleges in the region, Germanna and Rappahannock Community Colleges, provide a range of course offerings that are more aligned to the middle-skill occupations of the identified priority industry clusters. These middle-skill occupations require training that is greater than the high school level, but below the level of a four-year college degree.
The workforce analysis indicates that there may be a need to increase the annual number of completers from several technical certificate programs to meet current and future demand levels. Among those, are programs associated with occupations, Industrial Machine Mechanics, Electricians, Bus and Truck Mechanics, Plumbers, Pipefitters, Steamfitters and others. There was also stakeholder feedback indicating that there are
39
specific industries that are in need of specialized or tailored training programs to meet specific training requirements. The region should ensure that training programs for these unique needs are being met.
Strategies:
5. Realign training and education programs to meet industry requirements – It is a continual challenge to address the ever shifting and increasing skills/occupational needs of employers in the region. The education and training institutions within the region are encouraged to maintain a dialogue with employers in the priority industry clusters to determine the their most needed training and educational requirements. As these needs and requirements are identified changes in training/education programs will need to be modified to address them. 6. Expand Work-Based Learning Programs – Several of the stakeholder participants indicated that more work-based learning options were needed to address needs of employers and help retain/keep valuable workers in the region. Such programs as internships, apprenticeships, coop programs all provide work-based educational experiences. Exposure to career options in the priority industrial clusters should begin in middle school and continue with educational and training opportunities in high school. It is recommended that education institutions expand work-based learning programs and career pathway programs as part of their educational offerings. 7. Regional Educational Institutions Partner with the Commonwealth Cyber Initiative (CCI) – The CCI offers a great opportunity to for local students to be trained in the high paying and rapidly expanding cyber industry. As the initiative is launched the educational institutions in the region are encouraged to establish formal partnerships with the “node” universities serving the region. 8. Priority Industry Cluster Occupational Career Paths – The ability of the region to meet the projected need for skilled workers in the priority industry clusters depends upon a system of education and training starting in middle school with exposure to in- demand occupations and progressing into high school and higher education with tailored skills development and training. The initial tasks will be to identify those high-
40
demand occupations/careers within the priority industry clusters that match the capacities of the Region’s education/training providers. Once the occupations have been selected, curriculums can be developed and educational/training roles among the various educational institutions assigned. It is recommended that Region 6 establish a Workforce Development Workgroup to begin the process of identifying the “in- demand” occupations and career path curricula. 9. Regional Workforce and Technical Centers Expansion – The region has several facilities that are devoted to providing specific occupational training, The Northern Neck Technical Center, FredCAT, Rappahannock and Germanna Community Colleges Workforce Development Centers, local school division’s career and technical education programs, etc. As the ‘in-demand” occupations and careers are identified there will likely be a need for new or expanded facilities and equipment to support these training programs. The regional welder training facility in Montross is an example of specific industry needs being met though expanded program offerings, new equipment and a new facility to house the training. It is recommended that the Region support the development of needed facilities and equipment as occupational training programs are identified.
Entrepreneurship
Support facilities and services that help businesses grow are critical in accelerating the development of fledgling businesses and helping mature industries modernize, particularly in the priority industry clusters. 88.1 percent of all employers in Region 6 had fewer than 20 employees according to Virginia Employment Commission data for the 4th Quarter of 2018. These statistics illustrate the importance of assisting small businesses growth in Region 6. While most of Region 6’s economy is underpinned by small business development the region lacks a culture of entrepreneurship. Often the youth believe that they need to go out of the region to get an education and find a high wage job in a metropolitan area. Efforts are needed to strengthen the entrepreneurial environment to allow companies to emerge, grow and flourish.
41
Strategies:
10. Expand Youth Entrepreneurship Programs in K-12 and Community Colleges – Establishing an entrepreneurial culture in the region starts with instilling entrepreneurship principles at an early age. The University of Mary Washington Small Business Development Center has worked with three of the local school divisions on the Northern Neck and Middle Peninsula to establish youth entrepreneurship programs in the high schools that instill these entrepreneurial fundamentals. These efforts should be expanded to include addition school divisions, vocational and technical training facilities and the community colleges. 11. Expand the Mary Washington Small Business Development Center Programs – Region 6 has several institutions that support entrepreneurship and small business development, among them: the Fredericksburg Regional Alliance, Middle Peninsula Regional Alliance, Northern Neck-Chesapeake Bay Region Partnership, Northern Neck Tourism Council, REDCO, University of Mary Washington Small Business Development Center, University of Mary Washington Office of Economic Development, University of Mary Washington and EagleWorks Business Incubation Center. The University of Mary Washington Small Business Development Center has two offices serving the region, Fredericksburg and Warsaw. Much of the Middle Peninsula is either underserved or not served by the existing small business development center network. The University of Mary Washington, its SBDC and affiliated organizations provide the most comprehensive array of business development services. These services are in high demand and are not evenly available across the region. It is recommended that the University of Mary Washington expand its SBDC services programmatically and geographically to better serve the business community of the region. 12. Expand "Innovation Centers" Throughout the Region – The University of Mary Washington EagleWorks Business Incubation Center and the Northern Neck Enterprise Center provide incubation/acceleration and co-working facilities for start-up and small businesses. These facilities are critical in accelerating the growth of small growing companies throughout the region. The success of these facilities illustrates the demand for expansion of similar facilities in other areas of the region.
42
13. Expand the Financing Resources Offered by the Rappahannock Economic Development Corporation (REDCO) – Since 1983, REDCO has been committed to sustaining the growth, development and expansion of small business throughout Virginia. As a non-profit commercial lender, REDCO is a certified Small Business Administration 504 Loan Program lender. REDCO’s program provides commercial real estate and long-term equipment financing to small businesses, offering low down payments and very favorable 20-year fixed rates to help your business grow. REDCO should be encouraged to expand its financial offerings and services to include a suite of capital products and services from micro-loan products to access to equity capital. 14. Create "Opportunity Zone Funds" – The recently designated eight Opportunity Zones in the region has the promise of generating additional private sector investment in these areas. The federal legislation provides for the creation of Opportunity Zone Funds that receive special capital gains tax treatment if the capital from those funds is invested in the Zones for extended time periods. Revitalization of the Opportunity Zones can only occur and tax benefits flow if Opportunity Funds are created and investments from these funds made for projects in the Zones. It is recommended that efforts be made to establish local Opportunity Funds to help finance projects in the eight Opportunity Zones. 15. Conduct Business Plan Competitions – Business plan competitions and “shark tank” type programs have proven highly successful in helping to launch or accelerate businesses that have significant growth potential. While these programs infuse equity into the winner’s pockets, they also identify potential companies that may not be the winner but offer significant growth potential. These competitions force all competitors to generate business plans and refine concepts for new businesses that can be supported by existing forms of business capital thus the competitions result in many new businesses being launched. It is recommended that organizations throughout the region sponsor business plan competitions or similar programs targeted at businesses in the priority growth clusters. 16. Expand Participating Intermediary Agreements (PIA) – The numerous research facilities in the Region 6 and in neighboring areas; Naval Surface Warfare Center, Quantico, FBI Training Facility, VIMS, NASA Langley, all offer opportunities for
43
commercialization of the research conducted at these facilities. Typically, there are two types of research possibilities, military and non-military. Military research commercialization is often referred to as “Military 2 Market” programs and are facilitated by a partnership with a non-profit or university intermediary. These intermediaries facilitate the transition of military research into commercial applications. These partnerships are designated “Partnership Intermediary Agreements or PIA”. There are private companies located in Northern Virginia that have expertise in the commercialization of federal government research, but those firms have not yet established a foothold in this region. The Fredericksburg Regional Alliance has recently established a PIA with the Naval Surface Warfare Center at Dahlgren. It is recommended that the PIA relationships and efforts that have been established with Dahlgren be expanded. VIMS and NASA Langley also offer non-military research commercialization opportunities. It is recommended that the Middle Peninsula Alliance or similar economic development organization establish a PIA type of agreement with VIMS and NASA Langley to further the commercialization of research from these institutions.
Business Scale-Up
Existing industries in the region have the potential for expansion through process improvements (introduction of automation and technology), market augmentation and increasing exports. These services have been carried out by a variety of state organizations; GENEDGE for industrial process improvements, Virginia Tourism Corporation for expanded oyster markets, VEDP’s International Trade Office for export assistance. A number of local and regional economic development programs have also instituted programs that augment these types of assistance programs and expand existing businesses in their region. Additional assistance is needed to encourage existing businesses in the priority industry clusters to “scale-up”.
44
Strategies:
17. GENEDGE Technical Assistance – The industries in the priority industrial sectors have the ability to develop new product lines, to increase exports, expand markets and improve their internal processes. GENEDGE was created to assist individual manufactures improve their operations. While primarily serving manufactures GENEDGE services are available to a broader cross section of existing businesses. It is recommended that GENEDGE businesses services be expanded within the region to “scale up” businesses in the priority industry clusters to serve expanded markets. 18. VEDP Export Assistance – There are numerous businesses within the priority industry clusters that either current export or have the potential to export products or services to foreign countries. VEDP provides various types of assistance to Virginia businesses to allow them to export their products or services overseas or expand to additional overseas markets. It is recommended that an aggressive effort be made to identify those businesses that have increased export potential and link them to VEDP export representatives. 19. New Product Lines – Industrial hemp has been identified as a product that may have tremendous potential as an alternate crop for farmers in the region. In addition, Industrial hemp potentially could be processed in the region. The harvesting of Phragmites from salt marshes may have the potential as a soil additive. In addition, over the last couple of years several opportunities have emerged in the forestry, wood products and paper industry cluster, the most promising include pellets and other energy products, thermally modified wood products and cross-laminated timbers. Other priority industry clusters have identified similar emerging products or services that have the potential for rapid economic expansion. It is recommended that efforts be made to work with the individual businesses within the priority industry clusters to evaluate expansion potential into these product lines.
45
Broadband Infrastructure
Stakeholders continue to rank issue of broadband availability as a significant barrier for the expansion of small businesses, particularly professional services and technology businesses. Throughout the region, in the sparsely populated areas, broadband service is insufficient to support a small professional services business. If a business in these sparsely populated areas of the region is able to obtain broadband service, it is usually unaffordable or unreliable.
In the more densely populated areas broadband service is readily available but the existing services may not be able to support the ever-increasing demands of modern technology- based businesses.
The Regional Council approved a capacity building grant to the Middle Peninsula Alliance to develop a business plan for a broadband Internet service as an affiliate organization to be run by the Pamunkey Indian nation called PamunkeyNet. Most of the region’s localities are participating partners to the grant. The grant will evaluate the organizational and financing structures necessary to implement broadband service to the underserved areas of the region building off of the King and Queen County model of a rural Internet provider.
Strategies:
20. PamunkeyNet Implementation – Once the business plan for PamunkeyNet is developed, all efforts should be made to provide the financial and technical support necessary to launch this important venture. 21. Broadband Expansion – In addition to the PamunkeyNet initiative, there continues to be efforts in each of the sub-regions in conjunction with private broadband Internet providers to expand broadband service to the community. It is recommended that these efforts receive additional support as needed.
46
Water Based Economy
Aquaculture, seafood processing, and commercial fishing are the foundations of the Northern Neck and Middle Peninsula economy. These industries are comprised of small independent watermen as well as the state’s largest fishing operation, Omega Protein. This industry cluster has been traditionally under-represented in state employment statistics. However, the over 9,000 commercial fishing and fish processing licenses issued by the Virginia Marine Resources Commission (VMRC) demonstrate the importance of this cluster to the regional economy. A vast network of marine industries from boat building, boat repair and maintenance to businesses like West Marine support the primary industries.
Historically, this industry cluster has suffered from a steady decline in the natural fish and shellfish stock, particularly the oyster population. Other commercial species have been subject to regulatory limits on harvests to protect them from overharvesting. However, the recent introduction of aquaculture practices and disease resistant strains of oysters have resulted in resurgence in this industry cluster. With these changes in production techniques and an ongoing expansion of both the domestic and international markets for oysters, the industry has the potential for significant growth in the future.
The expansion of oyster aquaculture in the Middle Peninsula and Northern Neck is likely to continue. In addition, there is a possibility for the development of scallop aquaculture in those localities close to the Chesapeake Bay. Also, new techniques of harvesting of “blue catfish” being pioneered by VIMS may open up this fishery for commercial fishermen. New uses of the menhaden products produced by Omega Protein offer addition “value added” possibilities for this fishery. Finally, there is a possibility that the export of seafood to countries in Central and South America may provide additional new markets for the area’s seafood.
The issues of sea level rise, land subsidence and coastal resiliency require that regional economic development strategies consider a variety of strategies that are broader than the narrow issues just facing the aquaculture/seafood/commercial fishing priority industry cluster. The survival of the aquaculture/seafood/commercial fishing priority industry
47
cluster depends on addressing resiliency issues broadly as well as those issues related directly to the businesses in this cluster. As an example, if a waterman cannot navigate a channel because of increased sedimentation he will not be able to get his catch to market. While channel dredging allows the waterman to access his dock it also provides access for sport fishermen and recreational boaters.
The threats from sea level rise, incompatible land uses and inadequate planning for the continuation of the industry cluster are major obstacles to the expansion of this cluster. These challenges also provided opportunities for business development that can be exported to other coastal areas facing similar issues around the world.
Strategies:
22. Working Waterfront Development – Waterfront locations that have housed commercial fishing and marine related activity have diminished in number over the years as a result of the shrinking fishing and seafood industry. Today, the remaining working waterfront locations are under threat from adjacent residential uses, rising seas and increased State and federal regulatory actions. If the aquaculture/seafood/commercial fishing/marine trades industry cluster is to grow the existing working waterfronts will need to be preserved and developed to accommodate aquaculture and other marine industries. Additional areas along the shoreline should be designated and zoned appropriately for marine related activity. 23. Rural Virginia Coastal Community Enhancement Authority – The General Assembly enacted enabling legislation authorizing the creation of the Rural Virginia Coastal Community Authority (RVCCEA). RVCCEA covers the Middle Peninsula, Northern Neck and Eastern Shore of Virginia. RVCCEA has yet to be established but there are efforts underway to create the Authority in the fall of 2019. This Authority can be instrumental in securing funding for critical rural coastal issues specifically related to the Aquaculture/Seafood/Commercial Fishing/Marine Industries industry cluster. The Regional Council should take efforts to support the creation and functioning of this important regional authority.
48
24. Resiliency Innovation – The threats from rising seas and extreme weather patterns to our shorelines and coastal areas are having and will continue to have a major impact on the region’s economy both in the near-term and in the long-term. These threats are not unique to Virginia but are being felt nationally and globally. Both public and private efforts are being marshaled to address these threats and numerous actions will be necessary throughout coastal areas to make them more resilient. Just as we have learned from the resiliency efforts made in other areas of the country and around the world, the resiliency strategies developed for Region 6 have the potential to be exported to other coastal areas. Resiliency is on track to becoming multi-billion-dollar industry sector. Innovative business opportunities abound and some of the most promising for Region 6 rural coastal areas include; 1) elevated individual waste treatment systems, 2) shoreline and near shoreline natural resiliency measures, 3) dredging of small navigation channels and 4) unique oyster reef construction techniques. The Virginia Sea Grant Program at VIMS through a GO Virginia grant is developing some specific resiliency approaches for Region 6. The region should actively promote the creation of a resiliency innovation center in conjunction with VIMS that can incubate these promising opportunities into solid business ventures.
MEASURES OF SUCCESS
The following are proposed revised performance measures from the 2017 Growth and Diversification Plan. It is difficult to project the impact of the proposed investment strategies on these performance measures since the levels of investment in the strategies may not be sufficient to improve the performance and macro-economic factors will likely have a much larger impact than any GO Virginia actions. The following are proposed performance measures for the 2019 Growth and Diversification Plan:
• Year-over-year growth in number of enterprises, employment, and wages in the priority industry clusters: o Aquaculture, Seafood, and Commercial Fishing, o Distribution and Logistics o Forestry, Wood Products, and Wood Pulp
49
o Information/Data Centers o Manufacturing o Professional Technical and Scientific Services • Sub-regional analysis comparison of year-over-year growth in number of enterprises, employment, and wages in the priority industry clusters • Entrepreneurial Dynamics in Priority Industry Sectors o Job distribution by age of firm o Job creation by age of firm o Business formation rates of start-ups o Survival rates of startup companies o “Net” employment growth by industry classification o High-growth startups compared to all startups o Geographic distribution of startups • Proportion of region residents that live and work within the region • Regional workforce gaps in education and training programs serving middle-skill occupations • Regional broadband deployment
Table 4 shows the proposed suggested measures for each of the investment strategies for the first 2-year period, the 3 to 5-year time period and the 6 to 10-year time period:
Table 4. Measures of Success for Strategies by Time Period Strategy Years 1-2 Years 3-5 Years 6-10 Sites and Buildings 1. Virginia Business 2 sites increased at 3 sites increased at 3 sites reach Tier 5 Ready Site Program least 1 Tier level least 1 Tier level level 2. Data Center 1 site certified 2 sites certified 1 site certified Certification 3. Regional Business/Industrial Park a. Site Identification 1 regional site identified in each sub- region
50
b. RIFA 1 RIFA established 1 RIFA established 1 RIFA established c. Site Acquisition 1 site under option to 2 sites purchased and 1 site purchased purchase 1 site under option to purchase d. Site Development PER, environmental PER, environmental PER, environmental and master plan and master plan and master plan complete, 1 site complete - 2 sites, complete - 1 site, Phase Phase I construction I construction complete complete – 1 site – 2 sites, Phase II and III construction complete – 1 site 4. Speculative Building Westmoreland Flex Flex Building 2 speculative office Building application construction complete, buildings complete approved 2 capacity building feasibility studies complete Workforce Development 5. Training Program Regional workforce 3 workforce Workforce development Realignment training/education development initiatives initiatives in all K-12 workgroup implemented; 3 systems and higher established; 3- additional workforce education institutions workforce initiatives developed development initiative developed 6. Work-Based Germanna Community Apprenticeship Work-based learning Learning College Program implemented programs Apprenticeship in Rappahannock implemented/expanded Program implemented; Community College, in 5 school divisions Work-based learning Work-based learning programs programs implemented implemented in 3 high in 5 high schools and schools both community colleges 7. CCI Initiative 3 Cooperation CCI programs in all of agreements signed the local school between the divisions and higher community colleges, education institutions University of Mary Washington and the CCI “Node”, 3 Pilot programs implemented 8. Career Pathways 2 critical occupational 2 critical occupational 3 critical occupational career pathways career pathways career pathways implemented, 3 critical implemented, 4 critical
51
identified, and occupational career occupational career curriculums developed pathways identified, pathways identified, and and curriculums curriculums developed developed 9. Regional 2 capacity building 2 workforce training workforce training Workforce/Technical grants awarded to facilities expansions facility expansion under Centers Expansion determine feasibility of under construction, construction expanding/renovating Capacity building grant workforce training awarded to determine facilities feasibility of expanding/renovating workforce training facility Entrepreneurship 10. Youth 3 school divisions 5 school divisions 5 school divisions Entrepreneurship implement youth implement youth implement youth entrepreneurship entrepreneurship entrepreneurship programs programs, Community programs, University of colleges implement Mary Washington youth entrepreneurship implements youth programs entrepreneurship program 11. SBDC Expansion Entrepreneurship SBDC services planning grant expanded awarded to Mary Washington SBDC 12. Innovation Centers 1 incubator/ 2 incubators/ 3 incubators/ accelerator/co-working accelerators/co- accelerators/co-working facility constructed; 2 working facilities facilities feasibility studies constructed; 3 constructed/expanded completed feasibility studies completed 13. REDCO Capital access study 2 capital access funds 2 capital access funds completed; capital established established access fund created 14. Opportunity Zone 3 Zone funds 5 Zone funds Funds established established 15. Business Plan 3 business plan 5 business plan 8 business plan Competition competitions held competitions held competitions held 16. PIA Agreements PAI agreement PAI agreements implemented with implemented with VIMS Naval Surface Warfare and NASA Langley Center Business Scale-Ups
52
17. GENEDGE 4 businesses enrolled 6 businesses enrolled 8 businesses enrolled Assistance 18. Export Assistance 4 businesses enrolled 6 businesses enrolled 8 businesses enrolled 19. New Product 2 capacity building 2 product prototypes 3 product prototypes Development grants awarded for funded; 3 capacity funded; 4 capacity product feasibility building grants building grants awarded awarded for product for product feasibility feasibility Broadband Deployment 20. PamunkeyNet Corporation Phase II to IV All participating Implementation established, Phase I implemented localities have implemented broadband service 21. Broadband Public Private PPP established with 2 PPP established with 3 Expansion Partnership (PPP) additional providers additional providers established and and implemented funded Water-Based Economy 22. Working Selection of priority 2 working waterfront 4 working waterfront Waterfronts “at-risk” working improvement projects projects waterfronts in NN and funded, Assessment of funded/implemented MP and assessment improvements needed of improvements for 4 working waterfront needed projects 23. Rural Virginia RVCCEA created and Coastal Community staffed Enhancement Authority (RVCCEA) 24. Resiliency Feasibility study RIC created, 2 product 4 product prototypes Innovation Center completed on RIC; 2 prototypes developed/tested; 4 (RIC) feasibility studies developed/tested, 2 feasibility studies completed for feasibility studies completed on resiliency resiliency related completed on resiliency products products products
53
BUDGET CONSIDERATIONS/FUNDING SOURCES
The GO Virginia program requires that most project applications have matching resources that equal the amount of GO Virginia resources allocated to the project. Of this dollar for dollar match, 20 percent or $50,000, whichever is greater, must come from local governmental resources. The local governmental resources can be local appropriations, in- kind resources, property value or other tangible resources contributed to the project. The GO Virginia matching resources cannot be from state appropriated funds based on the philosophy that state dollars should not be used to match state dollars.
The potential array of matching funds typically includes resources from, Federal government, local government including political subdivisions, foundations, private sector and special funding sources.
An example of a special funding source might be the Opportunity Zone Funds that will be established to support the revitalization of the designated Opportunity Zones in the region.
There are typically four types of foundations that support community efforts, community foundations, hospital foundations, family/personal foundations and corporate foundations. All of these are potential sources for matching funds to GO Virginia resources. One restriction to accessing foundation resources is their requirement that funding go to not- for-profit organizations. Typically, foundations do not fund government sector activities but do fund non-profit groups that serve public purposes. A couple of examples of community foundations in the region include, the Community Foundation of the Rappahannock River Region, The Colonial Beach Foundation, River Counties Community Foundation, Mathews Community Foundation and the Gloucester Community Foundation. Most large corporations have foundations affiliated with their corporate structure. An example of this type of foundation would be the Geico Foundation. Most national or multi- national corporations are willing to invest in communities where they have a major facility.
54
The various programs of the Federal government provide tremendous opportunity to match GO Virginia funding on a specific project. Some of the more popular Federal resources commonly used in the region include, Community Development Block Grants, Rural Development funding from USDA, Economic Development Administration funding from the US Department of Commerce and US Department of Labor programs.
The private sector also offers opportunities for financial support of GO Virginia initiatives. The utilities, Dominion Virginia Energy, Old Dominion Electric Cooperative and its member cooperatives, Mid-Atlantic Broadband, etc., have historically supported economic development programs regionally and statewide. There are a variety of private sector sources of capital that could potentially be tapped as match for GO Virginia resources, but they would be specifically structured since most private sector resources expect a return on their investment.
Last, but not least, are local governmental resources that can be used to match GO Virginia funding. As stated earlier, GO Virginia policies generally require that there be local governmental resource committed to the project from at least two local partners. These local contributions can come from not only the local governments, towns, cities and counties, but can come from political subdivisions, PDC’s, EDA’s, Housing Authorities, School divisions, etc. and other public entities. The match provided can be contributions of value in addition to cash, including the value of, real estate, equipment, services and in-kind contributions.
Specific source(s) of matching funds for potential GO Virginia projects are difficult to identify without knowing what the potential projects might be. If the Regional Council adopts the recommendations in the Pipeline Analysis section of this report, potential projects will be known earlier in the funding process and the potential partner matching resources more easily identified.
55
Table 5 provides a listing of potential funding sources for projects under each major investment category. The type of project being proposed and the project sponsor will determine the eligibility for funding from each source.
Table 5. Potential Funding Sources for Projects Projects Potential Funding Sources Sites and Buildings Strategies 1. Virginia Business Ready Site • VEDP – Business Ready Sites Program Program • DHCD – Industrial Revitalization Fund • USDA – Rural Development 2. Data Center Certification • VDOT – Industrial Access Road Program 3. Regional Business/Industrial Park • EDA • Local Government 4. Speculative Building • Private developer Workforce Development Strategies 5. Training Program Realignment • VEDP – Workforce Services 6. Work-Based learning • Virginia Community Colleges 7. CCI Initiative • CCI Initiative 8. Career Pathways • Bay Consortium 9. Regional Workforce/Technical • EDA Centers Expansion • Community Foundations • (SCHEV) - Credentialing Program • Fast Forward Initiative • Local Government • Private employers Entrepreneurship Strategies 10. Youth Entrepreneurship • VEDP – International Trade 11. SBDC Expansion • GENEDGE 12. Innovation Centers • CIT 13. REDCO • SBDC 14. Opportunity Zone Funds • SBA 15. Business Plan Competition • DHCD – Community Business Launch, Building 16. PIA Agreements Entrepreneurial Communities, CBDG Planning Grants • USDA – Rural Development • Kaufman Foundation • Local Government • Local School Divisions • Community Foundations
56
Business Scale-Up Strategies 17. GENEDGE Assistance • VEDP – International Trade 18. Export Assistance • GENEDGE 19. New Product Development • CIT • SBDC • Local Government • Local Businesses Broadband Deployment 20. PamunkeyNet Implementation • Federal Tribal Grants 21. Broadband Expansion • USDA • DHCD – Virginia Telecommunications Initiative • Private Telecommunications Providers • Local Government Water-Based Economy 22. Working Waterfronts • Virginia Sea Grant Program 23. Rural Virginia Coastal Community • Virginia Coastal Program Enhancement Authority (RVCCEA) • Local Government 24. Resiliency Innovation Center (RIC) • CIT
PROJECT PIPELINE ANALYSIS
The GO Virginia program was started approximately three years ago with the regional Growth and Diversification Plans being completed in 2017. Once these plans were adopted by each regional council and approved by the state GO Virginia Board, the regional councils began soliciting applications for funding. It soon became clear that there were few projects that met the GO Virginia guidelines and priorities. Some of the early applications that were submitted exhausted the pipeline of projects that met all the GO Virginia parameters and were mature enough to receive funding.
Over the last two years the regional councils have come to realize that the GO Virginia guidelines, program requirements and priorities severely limit the type and number of potential project applications that can be expected from a region. Here are some of the characteristics of the GO Virginia program that has limited participation and funding of applications for regional economic expansion:
57
• At least a 50 percent match of non-state resources, • At least 20 percent of the match or $50,000, whichever is more, must come from local governmental resources, • At least two governmental partners as a part of the project, • Result in “higher” paying jobs, • A positive impact on “traded” sector businesses, • A positive return-on-investment for GO Virginia resources to the project within three years of project completion, • Support the expansion of target industry clusters, and • Implement the strategies of the regional Growth and Diversification Plan.
In addition to these requirements above there are certain policies of the state GO Virginia Board that further limit or dissuade applicants from applying. Some of these policies include:
• Specific priority for funding regional business site development, workforce development, and entrepreneurship programs, • Discouraging projects related to tourism and health care, • Not providing funding to other state initiatives, such as broadband connectivity to under-served communities, • Application approval by both the regional councils and the state GO Virginia Board, • Direct measurable outcomes, • Matching funds must be firmly committed prior to grant award, • Projects must have a demonstrated and documented need, • Receive a positive application review by subject matter experts, • Demonstrate that they will be sustainable after GO Virginia funding expires, and • Strict limits on multi-year funding commitments.
All of these requirements and characteristics are laudable, understandable, and in the public interest. However, they also severely limit the potential pool of project applications for GO Virginia funding.
58
If above characteristics were not enough to limit or discourage projects coming forward, the following characteristics of existing regional collaboration further limit applicants form applying for GO Virginia funding:
• For many of the GO Virginia funding priorities, it is the first time that the key public and private stakeholders have come together to discuss collaboration on a specific regional initiative or project concept. • There are no local or region funding streams dedicated to match the GO Virginia mission. • There are very limited discretionary funds available through regional organizations that can be tapped to match GO Virginia funds. • There are few regional organizations that have missions that are directly aligned with the GO Virginia mission. • While the Growth and Diversification Plans identify strategies for regional growth, there has been few resources allocated to developing these concepts into fundable projects. • There have been few strong advocates for regional collaboration based on the GO Virginia philosophy/approach. • There have been limited staff resources available to assist potential applicants in structuring proposals for funding. • Potential applicants view the program as very narrow in scope and difficult to meet all the grogram requirements. • And, potential applicants are reluctant to invest the extended time necessary to prepare a fundable application.
Both the state GO Virginia Board and the Regional Councils have recognized the challenges in applying for GO Virginia funding and have made some policy changes that will increase the likelihood that more applications will come forward in the future. The state Board has allowed a portion of the per capita funding to the regions to be used as capacity building grants. The purpose of these grants is to undertake specific tasks that may be necessary to determine if a project is viable and provide necessary project information. Grants could be
59
for any variety of tasks from developing a business plan for a regional broadband network to preliminary engineering report on the development of a regional facility. These capacity building grants have had relaxed matching requirements. The state board has encouraged the regions to become more proactive in marketing the GO Virginia program and assisting applicants in structuring proposals. Some regions have instituted procedures that will assist applicants in preparing their application such as asking for a simple letter of intent to begin the discussion of program policies between the applicant and the staff of the regional council. These early discussions can help determine early if the proposed project can realistically be a candidate for funding and what are some of the steps that will be needed to prepare a competitive application.
The Region 6 Regional Council has recently instituted several policy changes that should increase the pipeline of projects over the next year. At the May 2019 meeting of the Council, three pipeline acceleration grants were approved for each of the regional economic development organizations (REDO): Fredericksburg Regional Alliance, The Middle Peninsula Alliance, and the Northern Neck Chesapeake Bay Partnership. These grants are intended to support three deliverables, four letters of intent from each sub-region, and two applications within the next year. These organizations have unique organizational relationships that span the private and public sectors. Building upon these relationships it is expected that the partnerships necessary for project implementation can be forged. Each application identified ideas or concepts for several projects that have the potential of becoming project applications. These grants will provide the resources to the REDO staff to shape these project ideas into letter-of-intents from applicants and then hopefully into applications.
Region 6 has had only part-time staff resources to devote to GO Virginia matters. The Regional Council added resources to this year’s budget to add a full-time staff. That position as filled as of June 2019. This additional staff resource will allow the Regional Council to be more proactive in its approach to marketing the GO Virginia program and help shape development strategies into fundable projects.
60
In addition to the actions taken by the Region 6 Council, it is recommended that the Council take the following steps to further accelerate the transition from regional development strategies into funded projects:
• Use the flexibility granted by the state Board to fund a coordination function for entrepreneurship initiatives. The Mary Washington University Small Business Development Center (SBDC) is particularly suited and would likely be the most logical organization to undertake this coordination function given their programmatic and geographic coverage over the region. One of the purposes of the grant should be the exploration of expansion of SBDC services and those of EagleWorks both programmatically and geographically. The Rappahannock Economic Development Corporation (REDCO) also is particularly well suited to address the capital needs of businesses in the region. • The Regional Council should adopt an affirmative policy related to the use of the capacity building grants. An affirmative statement by the Council identifying high priority strategies/concepts contained in this Plan that require further investigation would encourage potential applicants to seek financial and technical assistance from the Region 6 Council and staff. This proposed policy statement is not meant to dissuade any applicant from applying for a capacity building grant but only encourage organizations to pursue the development of promising ideas into projects. • One of the largest impediments to regional business/industrial site development is a clear understanding of how revenue sharing arrangements operate in the context of a regional economic development organization, Regional Industrial Facilities Authority (RIFA). It is recommended that the Regional Council facilitate a forum(s) for local elected officials on the principles of economic development revenue/cost sharing and RIFA structures. Until the local elected officials can move past the initial reaction of “I’m not giving them our tax dollars,” there is not likely to be any willingness to enter into a formal regional site development arrangement regardless what the benefits may be.
61
Appendices
Appendix A. Stakeholder Engagement
The process of stakeholder engagement involved a series of stakeholder meetings that were held from May 15th to June 21st, 2019. Meetings were held with the chief administrative officers and Planning District Commission staffs of each of the three sub- regions, George Washington Region, Middle Peninsula, and Northern Neck. Meetings were held with the local economic development directors and regional economic development organizations in the Fredericksburg Regional Alliance and Middle Peninsula Alliance regions. Two additional meetings were held related to entrepreneurship and workforce development. The participants in the entrepreneurship and workforce development sessions were a combination of private sector, public sector, non-profit sector, and institutions across the region. Over 60 individuals participated in the stakeholder discussion sessions. Several common themes emerged from the sessions:
• Regional Economy Unchanged - The regional economy has not had much change since the Growth and Diversification Plan was prepared in 2017. The region is growing with the majority of the growth occurring in the northern portion of the region. Growth is also occurring in select other areas of the region but not uniformly in the rural areas. • Out-Commuting Challenge – Over half of the workforce commutes out of the region daily to work. This situation is by far the largest economic development challenge facing the region. Growing employment within the region or providing ways to allow those commuters to work remotely are the ways to stem the out-commuting. • Workforce Scarcity – Employers large and small are having a hard time finding workers to fill positions. Many employers are resorting to non-traditional measures to fill the vacancies. • Priority Sectors OK – The six priority industrial sectors identified in the 2017 Growth and Diversification Plan were still valid in 2019. There were several comments that the Seafood, Fishing and Aquaculture cluster should be expanded to capture a larger array of marine related businesses/industries. Several stakeholders mentioned that the
62
healthcare and tourism are very important industry clusters to the region but since GO Virginia does not place a priority on those sectors the consensus was to retain the six clusters. • Broadband – The lack of broadband service in the rural areas is still a major impediment to economic development. The current efforts to expand broadband service should continue to be a high priority and supported. • Limited Industrial Sites and Buildings – There is a lack of quality and variety of sites and buildings to support business expansion. The vast majority of the sites that are available in the region are concentrated in the northern portion of the region. Even in then there are virtually no business sites that have a VEDP Business Site Readiness rating above a “3” on a five-point scale. • Entrepreneurial Program Expansion – There was broad consensus that entrepreneurial programs, assistance, facilities and capital access needed to be expanded throughout the region. Expansion of youth entrepreneurship programs, expanded incubator/accelerator/co-working facilities, expanded SBDC services, additional business plan competitions and additional financial resources were among the many entrepreneurial services recommended for the region. There was agreement that greater regional cooperation was needed to augment the delivery of entrepreneurial programs in the region. • Commercialization of Research - The advancement of commercialization of research at the Dahlgren Naval Surface Warfare Center, VIMS and other research facilities in eastern Virginia were important strategies for consideration. • Downtown Revitalization – A number of the downtowns in the region have embarked upon revitalization efforts. These efforts have stimulated not only the renovation of downtown properties but also the stimulation of new business activity in these commercial hubs. Efforts should be made to support these programs and expand them to other communities within the region. • Misalignment of Workforce Preparation – The education and workforce development programs in the region are not producing the quality or the skill sets needed by the employers in the region. The education and training providers need to
63
adjust their program offerings to be more reflective of the occupations needed by regional employers. • Work- Based Learning – There needs to be a stronger linkage between employers and educational institutions in the region with an emphasis on work-based learning experiences. Such programs as apprenticeships, internships, career and technical education programs, etc. should be expanded throughout the region. • Greater Regional Cooperation- The local and regional governments and institutions all need to work more collaboratively to achieve economic progress. Establishing one or more Regional Industrial Facilities Authorities (RIFA) in the region to develop industrial sites and buildings was recommended. The establishment of a coordination function for entrepreneurship programs and workforce development programs were also recommended. • Industrial Hemp – Industrial hemp offers a potential for a significant new agricultural commodity. The potential types and uses of industrial hemp are not well known or understood by the farmers in the region. There is a need to conduct some research on the types of hemp that could be grown in the region, the various uses and markets for the hemp and how best to expedite the cultivation of the crop by area growers. Industrial hemp is a potential crop not only for region 6 but most of the rural areas of the state. A joint crop and market research project spanning several GO Virginia regions should be considered. • Opportunity Zones – The present designation of 8 Opportunity Zones in the region offers an opportunity to increase private investment in these areas. The tax advantages afforded to private investors willing to invest in real estate and business in the zones should over time stimulate revitalization. There is the potential to marry up GO Virginia investment with private Opportunity Zone Funds. The following is a summary of each of the stakeholder meetings and the issues and key discussion points.
FRA Pros Meeting – May 15, 2019 Key points from the discussion: • Confirmed that the 6 target industry clusters are good.
64
• Workforce issues are the greatest concern of most all employers – not just Tech workers but health care and tradesmen. • Commuting still the big nut to crack – how do we attract the workers to the region and how can we keep them closer to home. • The NOVA workforce development initiative funded by GO VA may be a model – Cyber and technology workers, universities, Community Colleges and 3 school divisions. • Need to look at Southern VA Model workforce initiative. • Need to dovetail with the Amazon initiatives. • SCHEV – may have an initiative that we need to pair up with. • The GO Virginia Cyber initiative needs to be fleshed out. • Defense IT workforce needs require more attention – continuum K-12 to higher education. • Telework may offer potential for easing commuting problems – co-working space options have had limited success. • There is an opportunity for remote work if region could supply Department of Defense (DOD) secure space. • Need for DOD specialized infrastructure to support satellite defense contractor operations. • Need more emphasis on entrepreneurship strategies. • Need to expand “Eagle Works” – more incubator/accelerator type facilities/programs. • FRA now has a participation agreement with Dahlgren and working through the issues of licensing of patents to businesses – researchers do not wish to operate a business – a broker function is needed.
Meeting with Juanita Cawley and Larkin Garbee – May 23, 2019 This was an entrepreneurship discussion held at the West Point Exchange. Key points from the discussion: • The West Point area has very few resources that support entrepreneurs. • Collaboration is needed across the region to increase access to resources.
65
• West Point Schools has assigned a staff person to further entrepreneurship in their school program. The Meadow Academy of Entrepreneurship may be a model for this. • A mobile “fab lab” could be established to be used by several school divisions. Tennessee is a model of this. • The community lacks an entrepreneurial culture. • There needs to be a technical assistance provider present in the area to support entrepreneurs. • There needs to be a resource directory/referral for entrepreneurs to be able to access and know who to contact. • There needs to be a program to fill gaps in resources for entrepreneurs. • The region should establish an angel investor network like the Bon Secours model in Richmond. • The region could establish a virtual mentorship program for entrepreneurs. • Entrepreneurs need incentives for investment – business plan competition, real property improvement matching grants, etc. • The “pop-up storefront” model could be used to encourage entrepreneurs to get started and test concepts. • The tribes need to be involved. • Tourism should be considered as a target industry for entrepreneurial activity.
Middle Peninsula Local Economic Development Officials – May 23, 2019 Eight local economic development officials attended. Key points from the discussion: • Target Industry Clusters should reflect a broader range of marine and water dependent related businesses. • Workforce is a major issue for all industries. • Need to coordinate with VEDP on their “Adventure Manufacturing” Initiative. • The hospitality industry should have a more prominent position in the GO Virginia program efforts. • Broadband continues to be a major issue for businesses in the region – If you do not have adequate access, then businesses cannot operate.
66
• Lack of adequate sites and buildings limits business expansion opportunities. • Entrepreneurship programs and resources are scarce throughout the region. • The school systems need to place greater emphasis on entrepreneurship opportunities. • A workforce training center at central garage could serve the upper Middle Peninsula and portions Hanover County. • The proposed incubator/co-working space at Shacklefords offers an opportunity to expand entrepreneurship programming region wide.
67
Appendix B. Regional Entrepreneurial Assessment Project Summary
The purpose of the Regional Entrepreneurial Assessment Project prepared by TEConomy Partners was to provide an assessment of entrepreneurial development and identify potential actions in GO Virginia Region 6 – the Mary Ball Washington Region.
TEConomy Partners, LLC was engaged by the GO Virginia Statewide Board to provide each GO Virginia region an assessment of its entrepreneurial development position, facilitate a situational assessment of the region’s entrepreneurial ecosystem, and help identify priority actions to help strengthen the ecosystem.
The report assessed the various stages of business growth, the activity in those stages and the support services available to grow businesses in each stage. Here is a summary of the findings of the analysis for the four stages: Ideation, Commercial Viability, Market Entry, and Growth and Scalability.
IDEATION
Overall Assessment: The overall level of startup activity is like the state average, but uneven across the region. There is a good deal of community interest in entrepreneurship, startup activity, and commercialization. Institutions of higher education are leading the initiatives to develop the entrepreneurial pipeline and provide support to entrepreneurs. There are many other actors playing formal and informal roles to connect and support founders.
Strengths and Opportunities:
• Growing population and growth in educated workforce. Growth in Region 6’s working- age population (5 percent) over the past 5 years outpaced that of VA (1 percent) and the U.S. (3 percent), driven by in-migration, including foreign migration, bringing new ideas and dynamism to the region. The share of the working-age population with a
68
bachelor’s degree or higher (24 percent) grew 17 percent over the last 5 years compared to VA (10 percent growth) and the U.S. (12 percent). • Programs to improve entrepreneurial pipeline. UMW’s StartUp program provides experiential startup training to high school, community college, and UMW students. • Convening spaces. UMW EagleWorks Incubator and Germanna’s FredCAT provide mix of office space, prototyping space, and programming for entrepreneurs and startups. • Diversity in type of startup activity. Startup activity is occurring across many different industries, e.g., business services, R&D, engineering & technical services, manufacturing, transportation, health care services, natural resources & finished products, etc.
Gaps and Weaknesses:
• Need more attention, assessment, and industry engagement with R&D institutions, e.g., NSWC Dahlgren, VIMS, etc., around commercialization.
COMMERCIAL VIABILITY
Overall Assessment: Local growth and high-growth companies are being launched in sectors aligned to regional industry strengths. However, the 10-year survival rate of trade sector companies (26.5 percent) is lower than the state average (31.4 percent). This survival rate is the share of 2007 new companies still in business in 2017.
Strengths and Opportunities:
• Concentration of employment in startup companies aligns to industry strengths. The GWRC has a high concentration of startup employment in R&D, Engineering, & Technical Services and Manufacturing. The Northern Neck and Middle Peninsula have high concentrations of startup employment in Agriculture & Food Processing and Natural Resources & Finished Products. Health Services and Life Sciences startups also have high employment concentrations in the Middle Peninsula, while the Northern Neck has a high concentration in Manufacturing. • UMW EagleWorks Incubator and the UMW Center for Economic Development provide a range of mentoring, business services, and programs to support startup companies and
69
their founders. CEW is working with the statewide SBDC-affiliated, GMU Innovation Commercialization Assistance Program to provide lean startup training. • Looking more narrowly at startups based on technology commercialization, Region 6 has performed well on one measure, SBIR success. On a per capita basis, Region 6 small companies outperform the national average (Region 6 averages $11 SBIR dollars per person compared to $8 nationally), but they lag the state average ($15). There is strong defense contractor representation in Region 6 and Virginia among SBIR awardees.
Gaps and Weaknesses:
• Traded sector 10-year startup survival rate (26.5 percent) lower than the state average (31.4 percent). This survival rate is for the share of 2007 new traded sector companies still in business in 2017. • Uneven level of economic development and entrepreneurial development across the Region can impact diversity of startup activity and trajectory of startup companies. • SBIR awards are highly concentrated. Three companies accounted for three-quarters of total SBIR dollars from 2010-2017, and none were startups (less than 10 years old).
MARKET ENTRY
Overall Assessment: Region 6’s new business formation rate tracks the state average fairly closely (e.g., both above 9 percent in 2015; 8 percent vs 9 percent state average in 2017), although startup activity is uneven across Region 6.
Strengths and Opportunities:
• Relatively high startup activity. Region 6’s new business formation rate tracks the state average fairly closely (e.g., both above 9 percent in 2015; 8 percent vs 9 percent state average in 2017). • Diversity in type of startup activity. Traded sector startup activity is occurring across many different industries, e.g., business services, R&D, engineering & technical services, manufacturing, transportation, health care services, natural resources & finished products, etc.
70
• Startup support. Startup support comes from UMW Center for Economic Development programs (including BlueEagle Incubator), main street associations and others. • Assessment needed. More assessment is needed, but initial interviews with stakeholder and BlueEagle Incubator suggest that startups self-finance the launch of traded sector services companies and build with customer revenue and government contracts. It is unknown how manufacturing, agricultural, and other product companies finance new product launch. • Capital Access. Continuum of capital exists with new micro loan programs, SBA loans, SBIR funding, some local angel investors, and VC funds in Richmond, Northern Virginia, and Hampton Roads. UMW Center for Economic Development can direct startups to these sources.
Gaps and Weaknesses:
• Network Gaps. Currently, the UMW Center for Economic Development is the most visible and main point of contact for startups seeking mentoring, capital, or other assistance. CED’s ability to scale to meet increasing demand is constrained.
GROWTH & SCALABILITY
Overall Assessment: Region 6 has a lower share of traded sector employment in startups 0- 5 years (6.6 percent vs 7.1 percent) and a higher share of employment in startups 6-10 years (8.8 percent vs 7.3 percent) compared to the state average. Region 6 had eight Inc 5000 companies that is lower than other mid-sized regions (peers have universities with Colleges of Engineering). There is an opportunity to increase traded sector startup activity and growth with more industry engagement and mentoring around existing startup programs.
Strengths and Opportunities:
• Higher share of traded sector employment in startups 6-10 years compared to state average. In Region 6, 8.8 percent of traded sector employment was in startups, 6-10 years of age, as compared to 7.3 percent at the state level.
71
• Moderate number of Inc. 5000 companies for a region without a College of Engineering. Compared to other mid-sized regions, such as Dayton, OH; Greenville, SC; and Raleigh, NC, the number of Inc. 5000-ranked companies (high three-year average revenue growth) was lower in Region 6 (8 companies compared to 13 in the benchmark region in 2017). However, Region 6 lacks a university with a College of Engineering. • High-growth business support. A couple of programs, such as the SBDC-affiliated, GMU Innovation Commercialization Assistance Program and BlueEagle Incubator are focused on supporting high-growth potential companies.
Gaps and Weaknesses:
• Share of traded sector employment in startups 0-5 years of age lower than state average. In Region 6, 6.6 percent of traded sector employment was in startups, 0-5 years of age, compared to 7.1 percent at the state level. • High-growth companies concentrated in traded industry sectors tied to Federal government contracting. From 2007-17, Business Services (77 high-growth companies) was the most represented, followed by IT Services (26 companies), R&D, Engineering, and Technical Services (23 companies), and Transportation & Logistics (22 companies). • Reported venture capital activity is minimal. Only 12 deals reported by PitchBook from 2010-2017. Six deals were in one smart grid company. However, venture capital is only one type of capital in the capital continuum.
Based upon the above assessments, the analysis recommends actions in five program areas. The following is the recommended program areas and actions listed for each area:
• Develop entrepreneurial pipeline.
o Improve and expand “high-growth” startup programming. o Improve and expand “local-growth” startup programming. o Develop a continuum of capital.
72
• Improve and expand “high-growth” startup programming.
o Define “high-growth” startup and identify the required resources for this group of companies (which will differ from “local-growth” companies). o Build on existing programs by expanding the number of mentors and involving angels. o Expand regional, state, and national networks and networking events.
• Improve and expand “local-growth” startup programming.
o Deepen and expand peer-to-peer networks and programming to build community. Existing examples include Main Street organizations, CEW veteran-owned businesses network, and women-owned businesses network. o Host meetups, workshops, and events at different regional venues to highlight resources and cross-fertilize networks. o Identify where to send people who have a business concept, do not prioritize a company with initial customers against a high-growth potential company trying to scale.
• Develop a continuum of capital.
o Leverage organizations working with “local growth” companies to direct good deal flow toward micro loans programs. o Use CEOs of successful startups as review committee for micro loans—these reviewers could be future investors in private fund (must mitigate conflict of interest). o Engage financial advisors in networking events, host talks by CEOs of high-growth companies and by representatives of angel groups who can speak to lessons learned and impact of starting their funds.
73
• Focus on technology commercialization and industry engagement with regional R&D institutions.
o Encourage the formation of technology councils through outreach to both companies and research institutions (NSWC Dahlgren, W&M VIMS, Langley, UMW). o Bring regional startup programming to research institutions and engage entrepreneurial researchers in technology-based startup networking events. o Make technology commercialization part of the “high-growth” startups strategic initiative.
74
Appendix C. Virginia Initiates Program Alignment
The following is a description of the following three key state initiatives and a brief discussion of how these initiatives can be leveraged though Region 6 institutions.
• Virginia Research Investment Committee, • Collaborative Economic Development Act, and • State Council of Higher Education Credentialing Program.
VIRGINIA RESEARCH INVESTMENT COMMITTEE (VRIC)
The premier initiative of VRIC is the implementation of the Commonwealth Cyber Initiative (CCI). VRIC in partnership with VA Tech and the other three “Node” universities are just in the initial stages of moving forward with a major statewide initiative to position Virginia as a world leader in cyber security. All of the Region 6’s education institutions stand ready to partner with the CCI Node universities to bring cyber security education, training and research to the students throughout the region.
The following description of the CCI program provides a more complete overview of the status of the Initiative.
The CCI is a $25-million effort funded in the 2018-20 Virginia budget. It calls on higher education institutions and industry to build an ecosystem of cyber-related research, education, and engagement. The goal is to position Virginia as a world leader where cyber security meets data analytics, machine learning, and autonomous systems.
CCI will consist of a hub in Northern Virginia anchored by Virginia Tech and four regional nodes across the Commonwealth; each led by an institution of higher education (Virginia Tech, Virginia Commonwealth University, George Mason University and Old Dominion University). Regional nodes will be vibrant centers of research, learning, and innovation tailored to their local ecosystem. VRIC certified the regional nodes in May.
75
CCI’s network engages 320 faculty members across 39 higher education institutions, as well as 65 private companies, four federal partners, and 45 other regional partners. CCI will provide the connective platform necessary for both programs and people to work together to position Virginia as a leader where cyber security meets data analytics, machine learning, and autonomous systems.
Each node will engage the educational institutions in their region in an education, training and research tailored specifically to that region. The focus areas for each node have yet to be finalized and the institutional arrangements with other educational and institutional partners have yet to be developed.
VRIC contracted with TEConomy to produce an Assessment of Virginia’s Research Assets: Strategic Directions to Advance Innovation-Led Growth and High-Quality Job Creation across the Commonwealth. This analysis, completed in December of 2018, had numerous recommendations to accelerate the commercialization of research from Virginia’s universities, federal laboratories, and private corporations. Most of the recommendations were related to restructuring programs and activities statewide. One of the recommendations, identified as “Enhanced Action 4: Create a network of Virginia Regional Innovation Partnerships,” is particularly relevant to GO Virginia regions. The following text from the TEConomy report more completely describes the recommended actions to implement Enhanced Action 4 of the report.
Strategy Four: Shore up Virginia’s regionally based innovation capacities to generate more start-ups and advance high-growth companies
Baseline Action for VRIC to Consider - Enhanced Action for the Commonwealth to Consider - Baseline funding resources to address this strategic need separately from support for statewide development.
Enhanced Action 4: Create a network of Virginia Regional Innovation Partnerships - The annual level of activities generated from the baseline actions informed by best practice examples is expected to be significant, including the following:
76
• Increased industry-university translational and applied research collaborations in the strategic growth opportunity areas, including as follows: o 30 to 45 individual Virginia company applied research projects with one or more universities o 15 collaborative translational research projects, each involving one or more universities with multiple companies o Facilitation of industry engagement and high-touch customer-oriented services through a network of university site miners to work with companies • Improved university capacity to commercialize their research discoveries, including as follows: o 20 proof-of-concept projects with strong industry mentorship leading to 5 to 6 new start-ups annually o Streamlined university technology transfer and commercialization practices that place an emphasis on value creation through new start-ups and licensing to Virginia companies o Increased capacity through collaborative efforts across universities to share access to market and technical experts and entrepreneurial training.
Beyond the activities generated from putting VRIF’s resources to work, several key outcome-oriented measures are suggested to track the direct contributions of the baseline actions, including the following:
• Industry R&D levels generated • Licensing of university technologies to Virginia companies • Milestones reached in licensing of university technologies to Virginia companies • Number of new start-ups • Follow-on funding to new start-ups • Evidence of rising valuations in new start-ups • New sales growth by existing and start-up companies assisted • Industry rating on quality of services provided.
The Institute of Marine Science at is well suited to become a regional innovation partner once VRIC implements the recommendations. The Institute is already engaged in research to address the economic conditions in the region. The Fredericksburg Regional Alliance (FRA) has recently been designated a PIA, Participating Intermediary Agreement, organization with the US Naval Surface Warfare Center at Dahlgren. This designation will allow FRA access patients, researchers and facilitate the licensing of the research to companies wishing to commercialize that research.
77
COLLABORATIVE ECONOMIC DEVELOPMENT ACT
The Collaborative Economic Development Act was created by Virginia’s General Assembly in 2016 as a part of the GO Virginia legislative package. The Act calls for the creation of the Virginia Collaborative Economic Development Performance Grant Fund (CED Fund) that will provide grants to at least two or more Virginia localities that collaborate in joint economic development initiatives that result in the location or expansion of a certified company within their respective jurisdictions. The GO Virginia State Board, in conjunction with the Virginia Economic Development Partnership and the Department of Housing and Community Development, will administer grants that are awarded from this fund.
The Collaborative Economic Development Grants are unique in that, for the first time in Virginia’s history, participating localities can recover up to 45 percent of the total amount of personal income tax withheld from employees holding new jobs at the certified company for a period of 6 years.
A certified company, as mentioned above, means a Virginia employer that has been certified by the Virginia Economic Development Partnership to have:
1. Created or caused to be created at least 200 net new jobs in the participating localities with average salaries at least equal to the average wage in those localities and 2. Made a Capital Investment of at least $25 million.
If, however, the Board makes a written finding of significant fiscal distress or extraordinary economic opportunity in the participating localities, the Board may lower the job creation and capital investment requirements to not fewer than 25 net new jobs and not less than $1 million of capital investment.
Region 6 localities will need to establish regional collaborative agreements for business location throughout the region. The only regional revenue sharing agreement is on property surrounding the West Point Regional Airport. The fiscal and economic conditions in many of the Region 6’s localities should make them eligible for the lower qualification
78
thresholds for business job creation and investment if they could meet the Participating Localities requirement.
STATE COUNCIL OF HIGHER EDUCATION (SCHEV) - CREDENTIALING PROGRAM
During the 2016 session, the General Assembly passed HB 66 that established the New Economy Workforce Grant Program. This grant program, the first of its kind, provides a pay-for-performance model for funding noncredit workforce training that leads to a credential in a high demand field. The program also includes requirements for students to complete the program in order to avoid paying additional costs. Here is a summary of the major key components of the program:
• Funds may be provided to eligible institutions for non-credit training that leads to a workforce credential in a high demand field.
• Eligible institutions include community colleges, higher education centers and Richard Bland College.
• Non-credit training programs should align with the high demand fields set by the Virginia Board for Workforce Development.
• Students are required to pay one-third of the total cost of the program upon enrollment. Students may use third party funds, such as noncredit financial aid, training vouchers or employer payment to cover this cost.
• If the student completes the training, then the state provides one-third of the cost of the program, up to $1,500 to institution. If the student does not complete the program, then the student is required to pay this portion of the total cost.
• If the student satisfactorily completes the workforce credential after completing the training, then the institution receives the remaining one-third of the cost of the program up to $1,500. The combined maximum award to an institution is $3,000 for completion of training and a credential.
• Institutions must provide student-level data to SCHEV to receive funding.
79
• SCHEV is responsible for administering the program, conducting periodic assessment of the program, collecting student data, and making final decisions on disputes between eligible institutions and grant recipient.
The following major occupation groups are included in the Demand Occupations List for the 2018- 2019 fiscal year. These are approved high-demand occupations.
• Computer and Mathematical Occupations • Architecture and Engineering Occupations • Life, Physical, and Social Science Occupations • Education, Training, and Library Occupations • Healthcare Practitioners and Technical Occupations • Healthcare Support Occupations • Office and Administrative Support Occupations • Construction and Extraction Occupations • Installation, Maintenance, and Repair Occupations • Production Occupations • Transportation and Material Moving Occupations
All Community colleges across Virginia and the Southern Virginia Higher Education Center currently offer programs aligned with the high-demand occupations.
Most of the Demand Occupations
• Computer and Mathematical, • Architecture and Engineering, • Life, Physical, Social Science, • Education and Training, • Office and Administrative Support, • Installation and Maintenance, • Production, and • Transportation and Material Moving Occupations
80
are all directly related to Region 6’s six priority industry sectors:
• Seafood, Fishing and Aquaculture, • Forestry, Wood Products and Paper, • Manufacturing, • Professional, Technical and Scientific Services, • Distribution and Logistics, and • Information/Data Centers.
The recently funded Rappahannock Community College welder workforce development and the University of Mary Washington cyber security certification training will be implementing career development in two of these occupations. The New Economy Workforce Credential Grants will be a tremendous financial benefit to those students participating in the training programs of the Germanna and Rappahannock Community Colleges.
81
Appendix D. Non-GO Virginia Programs
The following description of non-Go Virginia initiatives and programs offer opportunities for collaborations with GO Virginia projects and may be resources to implement the goals and strategies of the regional Growth and Diversification Plans. The following initiatives/programs are described in this section:
• Virginia Business Ready Sites Program, • Commonwealth Cyber Initiative, • Amazon HQ2 Tech Talent Pipeline Initiative, • Virginia Telecommunications Initiative, • Virginia FastForward Initiative, • Opportunity Zones, and • Rural Coastal Virginia Community Enhancement Authority.
VIRGINIA BUSINESS READY SITES PROGRAM
Virginia Business Ready Sites Program (VBRSP) is a discretionary program to promote development and characterization of sites to enhance the Commonwealth’s infrastructure and promote the Commonwealth’s competitive business environment. The program’s goal is to identify, assess, and improve the readiness of potential industrial sites.
A team of state, regional, and local stakeholders including Virginia Economic Development Partnership (VEDP), Virginia Department of Environmental Quality (DEQ), railroad representatives, utility representatives, civil engineers, and other government, business, and industry representatives developed VBRSP.
VBRSP has 5 Site Characterization Tier Levels:
• Tier 1: Site under (a) public ownership, (b) public/private ownership, or (c) private ownership with such private owner(s) agreeable to marketing the site for economic development purposes and to allowing access to the property for site assessment and marketing purposes, but at no established sales price. The Comprehensive plan reflects
82
site as appropriate for industrial or commercial development and use, but site is not zoned as such. Site has minimal or no infrastructure. Minimal or no due diligence has been performed. • Tier 2: Site under (a) public ownership, (b) public/private ownership, or (c) private ownership with an option agreement or other documentation of a commitment by the private owner(s) to a competitive sales price, to permit access to the site for site assessment, construction, and marketing, and to market the site for industrial or commercial economic development purposes. The Comprehensive Plan reflects site intended for industrial or commercial development and use, but site is not zoned as such and a rezoning hearing needs to be scheduled. Site has minimal or no infrastructure. Minimal or no due diligence has been performed. • Tier 3: Site is zoned for industrial or commercial development and use. Site has minimal or no infrastructure. Due diligence including, among other things, a wetlands survey with Army Corps of Engineers approval within the last five years, geotechnical borings, boundary and topographical survey, cultural resources review, an Endangered Species review, and a Phase I Environmental Site Assessment, has been completed. Estimated costs of development have been quantified. • Tier 4: All infrastructures are in place or will be deliverable within 12 months. All permit issues have been identified and quantified. • Tier 5: All permits are in place and the site is ready for a site disturbance permit from the locality in which the site is located.
VEDP is in the process of assessing the inventory of sites across the Commonwealth according to the VBRSP. VEDP has contracted with four professional engineering firms to conduct this initial assessment. The desk audits will begin the summer of 2019 with a status report available in the fall of 2019.
VEDP provides a limited number of grants annually for sites greater than 100 acres for site characterization. These grants are considered on a competitive basis and made at the discretion of a committee of the VBRSP Working Group members. Site Characterization
83
Grants are available to reimburse for retaining a Site Development Professional for Site Characterization and receiving a designated Site Characterization Tier Level.
To be eligible for a Site Characterization Grant, an eligible applicant must have had the Site Characterization made no earlier than one year prior to the application for a Site Characterization Grant or have the Site Characterization completed no later than 90 days after a Site Characterization Grant has been awarded.
The maximum Site Characterization Grant awarded to an applicant is 50 percent of the cost of site assessment, up to $5,000. A local match of at least 100 percent is required. An applicant further is responsible for covering any remaining amount of the cost of Site Characterization.
COMMONWEALTH CYBER INITIATIVE
The Commonwealth Cyber Initiative (CCI) is a $25-million effort funded in the 2018-20 Virginia budget. It calls on higher education institutions and industry to build an ecosystem of cyber-related research, education, and engagement. The goal is to position Virginia as a world leader where cybersecurity meets data analytics, machine learning, and autonomous systems.
The Commonwealth Cyber is collaboration between the State Council of Higher Education of Virginia (SCHEV) and the Virginia Research Investment Committee. The CCI initiative is established to serve as an engine for research, innovation, and commercialization of cybersecurity technologies, and address the Commonwealth's need for growth of advanced and professional degrees within the cyber workforce.
The initiative calls for a primary hub to be located in Northern Virginia and a network of spoke sites across the commonwealth with collaborating universities in Virginia. Virginia Tech will lead the initiative because of its strengths in science and engineering, existing expertise in cybersecurity research and education, and its significant research presence in Northern Virginia.
84
CCI proposes to have four anchor research institutions, Nodes, of higher education across Virginia (VA Tech, VCU, ODU and GMU) to coordinate the cyber research, development and workforce advancement. In collaboration with public institutions in the Commonwealth, Virginia Tech will serve as the anchor institution in Northern Virginia and coordinate the activities of the Hub. The Hub will coordinate a Network of Regional Nodes.
The activities of CCI include:
• Cyberphysical System Security (CPSS) Research: CPS and the “Internet of things” promise to enhance the quality of life in many ways but require advances in security and trust to ensure robust, safe, and widespread adoption and impact. This includes world-class research teams at the Hub and across the Network focused on the next- generation communication technologies that will support the Internet of things, as well as machine learning and artificial intelligence for cybersecurity. Through a Network- wide research alliance, the team will partner with and host CCI-aligned researchers from institutions across the Commonwealth, bolstering CCI Network ties and enhancing synergies across the Nodes. • Entrepreneurial Ecosystem: The CCI Network is committed to ensuring that research outcomes make their way to market quickly and effectively. CCI investments will grow and diversify the Virginia cyber economy Commonwealth-wide by promoting the commercialization of CPSS products and launching cyber-focused startups. The CCI Hub will support entrepreneurship across the Network by providing access to venture capital and supporting startups. CCI will support technology de-risking through approaches like proof-of-concept grants. In addition, Nodes will promote CPSS research and entrepreneurship in their regional ecosystems. • Co-Op 2.0 Portal: To ensure that Virginia students are fully prepared to enter the innovation workforce upon graduation, the CCI Network will promote and support opportunities for long-term and year-round experiential learning in ways that do not prolong student time to-degree. These longer-term relationships increase value for both stakeholder groups. CCI will support the distance learning, flexible educational schedules, and industry partnerships required to establish and scale these experiences
85
across the Commonwealth. CCI funding will be made available for matching industry investment in student stipends.
The 2018-2020 Virginia State Budget invests $25 million in CCI. This appropriation includes $10 million to scale the initiative and recruit faculty both the Hub and Node sites. An additional $10 million is provided to establish the Hub, including research faculty, entrepreneurship programs, and student internships. Finally, $5 million is available for renovations, space enhancements, and equipment.
CCI’s success will be measured by well-defined output indicators. CCI will also produce real outcomes for the Commonwealth, such as student employment in cyber fields in Virginia industry, patent licensing, and venture capital invested in spin-offs.
To achieve these outcomes, CCI recommends an additional $40 million in funds to further scale the Hub, pilot new programs to scale degree production, and recruit scholars and researchers across the Commonwealth. The CCI Network should be sustained by a $28 million annual investment in research and educational faculty support, CoOp 2.0 support, and other Network programs. These funds will be leveraged to grow a combination of philanthropy, industry investment, and sponsored research programs totaling over $20 million for the initial investments and growing to $35 million annually at steady state.
AMAZON HQ2 TECH TALENT PIPELINE INITIATIVE
The centerpiece of Virginia’s proposal for HQ2 was a performance-based, statewide investment in computer science and related programs to more than double Virginia’s tech- talent pipeline, which will benefit tech employers across the Commonwealth.
• Vision - To strengthen the tech-talent pipeline across Virginia, the Commonwealth will make performance-based investments in public higher education institutions statewide. The effort will produce 25,000 to 35,000 additional degrees in computer science and related fields – roughly split between bachelor’s degrees and master’s degrees – over the next two decades, in excess of current rates. Existing degree production levels will more than double as a result.
86
• Program Design - Subject to performance-based agreements to be negotiated with each public community college, four-year college, and university across Virginia that wish to participate, state funding will be provided to recruit faculty, address capital needs, and provide ongoing enrollment support necessary to more than double existing levels of degree production in computer science and closely related fields. The overall program includes five components: 1) K-12 tech-talent pipeline initiative; 2) A Community College program; 3) Bachelor’s-level education; 4) Master’s-level education; and 5) Tech internship program for higher education students.
1) Strengthening the K-12 Tech-Talent Pipeline Statewide - Building the tech-talent pipeline starts with a public K-12 system that includes an integrated STEM and computer science curriculum at every grade for every student. Virginia led the nation by adopting computer science standards across the K-12 continuum, and the Commonwealth is continuing to equip teachers to implement them effectively. However, in order to meet the growing needs of Amazon and other high-tech employers, additional investments are needed to bring high-quality STEM and computer science teaching and learning to scale. Therefore, over the next 20 years, Virginia will invest $25 million statewide in new funding in the K-12 STEM and computer science experience for students and teachers. This investment will enable the Commonwealth to provide ongoing professional development to current and future teachers; create, curate, and disseminate high-quality curriculum and resources; support summer and after-school programming for students; and facilitate meaningful career exposure and work-based learning opportunities in high demand fields. 2) Statewide Community College Tech-Talent Education - Community colleges across Virginia play an essential role in preparing students for technology jobs, including both degree and certificate programs that lead directly to well- compensated IT positions as well as transfer programs that enable completion of
87
bachelor’s degrees in computer science and related fields at a reduced cost compared to attending only a four-year institution. State leaders will collaborate with the Virginia Community College System (VCCS) and community college leaders to craft performance-based community college tech talent programs that will complement the bachelor’s and master’s level tech-talent education programs described below. 3) Statewide Bachelor’s-Level Tech-Talent Education - With General Assembly approval, the Commonwealth will establish a performance-based tech-talent investment fund through which 7 higher education institutions across Virginia can receive startup funds for faculty recruitment, state capital investment (where required), and enrollment funding necessary to expand the number of bachelor’s degrees they confer annually in computer science and closely related fields (e.g., computer engineering). Participating institutions will enter into memorandums of understanding (MOUs) that detail their plans for growth, state funding commitments, annual reporting requirements, and future funding parameters associated with performance. The total new state investment to grow bachelor’s- level tech-talent education will be determined in part by how much of the growth in computer science and related fields is associated with an overall increase in college graduates and how much relates to a shift in the degree-field mix that may occur at some institutions. The bachelor’s-level tech talent education program will represent the largest state investment of the five components. 4) Master’s-Level Tech-Talent Education in Northern Virginia. The Commonwealth also plans investments of up to $375 million for academic space and operational support to increase master’s degree production in computer science and related fields in Northern Virginia over the next 20 years. These performance-based, master’s-degree level investments will be provided on a dollar-for-dollar matching basis for philanthropic funds raised by George Mason University for its Arlington campus and Virginia Tech University for a new graduate level Innovation Campus expected to be located in Alexandria. Master’s degrees offer advanced, ongoing professional development; dramatically reduce the total cost for additional
88
credentials; can be produced more quickly than bachelor’s degrees; and lend themselves to customization. 5) Tech Internship Program for Higher Education Students. The State Council of Higher Education for Virginia (SCHEV) will develop a higher education program to ensure that all students in baccalaureate programs in computer science and related fields have access to high-quality work-based learning, such as internships, apprenticeships, research experiences, and cooperative education programs. The Commonwealth will invest at least $25 million in this program over the next 20 years. To ensure efficiency and consistency in meeting the needs of students and businesses, the General Assembly may choose a single entity to oversee the allocation of funds dedicated to the program.
VIRGINIA TELECOMMUNICATIONS INITIATIVE
The Virginia Telecommunication Initiative (VATI) provides grants to extend broadband service to currently underserved areas in the Commonwealth. VATI prepares communities to build, utilize, and capitalize on telecommunications infrastructure with the goal of creating strong, competitive communities. Consistent with the enabling legislation, DHCD was appropriated $4 million in FY 2019 to be awarded eligible applicants, subsidizing the construction costs and providing last-mile services to these underserved areas of the state. The FY 2020 state appropriation is for $19 million.
A unit of local government must submit applications with a private-sector provider(s) as a co-applicant. Units of government include towns, cities, counties, economic and industrial development authorities, broadband or wireless authorities, planning district commissions, etc.
The Virginia Department of Housing and Community Development will host two input sessions to discuss the proposed FY2020 Virginia Telecommunication Initiative guidelines and criteria.
89
VIRGINIA FASTFORWARD INITIATIVE
FastForward is a short-term workforce credential program to train Virginians for top, in- demand jobs through the Virginia Community College system. Most programs take between six and 12 weeks and are built so students can get their education while they work.
FastForward offers credential training programs to prepare Virginians for 40 high-demand careers. The FastForward training programs to date have a completion rate of more than 90 percent. FastForward credentials are offered in the following industry sectors; Logistics and Transportation, Healthcare, Welding and Manufacturing, Skilled Trades, Information Technology, Business and Customer Service, and Education.
The New Economy Workforce Grant Program was implemented as the Virginia FastForward program. During the 2016 session, the General Assembly passed HB 66 which established the New Economy Workforce Grant Program. This grant program, the first of its kind, provides a pay-for-performance model for funding noncredit workforce training that leads to a credential in a high demand field. The program also includes requirements for students to complete the program in order to avoid paying additional costs. A summary of the major key components of the program is included below:
• Funds may be provided to eligible institutions for non-credit training that leads to a workforce credential in a high demand field
• Eligible institutions include community colleges, higher education centers and Richard Bland College
• Non-credit training programs should align with the high demand fields set by the Virginia Board for Workforce Development
• Students are required to pay one-third of the total cost of the program upon enrollment. Students may use third party funds, such as noncredit financial aid, training vouchers or employer payment to cover this cost.
• If the student completes the training, then the state provides one-third of the cost of the program, up to $1,500 to institution. If the student does not complete the program, then the student is required to pay this portion of the total cost
90
• If the student satisfactorily completes the workforce credential after completing the training, then the institution receives the remaining one-third of the cost of the program up to $1,500. The combined maximum award to an institution is $3,000 for completion of training and a credential
• Institutions must provide student-level data to SCHEV to receive funding
• SCHEV is responsible for administering the program, conducting periodic assessment of the program, collecting student data, and making final decisions on disputes between eligible institutions and grant recipient.
The results of the program by industry are 32 percent of credentials were earned in skilled trades, 24 percent were earned in logistics and transportation, 20 percent in welding and manufacturing, 15 percent in health care, and 9 percent in education, business and information technology. The majority of FastForward graduates experience a 25 percent to 50 percent wage gain after attaining their credential. In addition, 90 percent of Virginians working with FastForward credentials reported having employer-sponsored health care, 75 percent receive paid sick leave, 85 percent get paid vacation time, 88 percent report better work schedules, and 82 percent are working in their preferred field.
FastForward also contributes significantly to Virginia’s overall economy. Based on an analysis of 2,500 available wage records, FastForward graduates earned more than $81 million dollars last year, a nearly $15 million increase over their earnings prior to participating in the program. This results in estimated annual income taxes of $4,004,027 paid by FastForward graduates, according to Virginia Community Colleges.
OPPORTUNITY ZONES
Opportunity Zones are economically distressed communities, designated by states and territories and certified by the U.S. Treasury Department, in which certain investments are eligible for preferential capital gains tax treatment. The tax incentive is designed to spur economic development and job creation in distressed communities by providing these tax benefits to investors. Effective June 14, 2018, Treasury certified Opportunity Zones in all states, territories and the District of Columbia. Opportunity Zone designations will remain
91
in effect until December 31, 2028. Two-hundred and twelve Opportunity Zones have been designated in Virginia.
Investments in Opportunity Zones are made through a qualified Opportunity Fund. A qualified Opportunity Fund is any investment vehicle organized as a corporation or partnership with the specific purpose of investing in Opportunity Zone assets. The fund must hold at least 90 percent of its assets in qualifying Opportunity Zones property. Any taxpaying individual or entity can create an Opportunity Fund, through a self-certification process by submitting a form with the taxpayer's federal income tax return. Opportunity Funds can invest in any qualified Opportunity Zone property, including stocks, partnership interest or business property (so long as property use commences with the fund, or if the fund makes significant improvements to the qualifying property).
There are three primarily benefits available to investors that invest into an Opportunity Fund, with increasing benefits the longer the investment is held in the Fund:
• Deferral of capital gains taxes. An investor that re-invests capital gains (within six months or realizing the gains) into an Opportunity Fund can defer paying federal taxes on those realized gains until as late as December 31, 2026.
• Reduction of capital gains taxes. Investors that hold the investment in the Opportunity Fund for at least five years can reduce their tax bill on the deferred capital gains by 10 percent. This reduction increases to 15 percent for investors that hold the investments in the Opportunity Fund for at least seven years.
• Elimination of taxes on future gains. Investors that hold the investment in the Opportunity Fund for at least ten years will not be required to pay federal capital gains taxes on any gains realized from the investment in the Opportunity Fund.
Virginia Community Capital, with leadership from LOCUS Impact Investing and in partnership with the Virginia Department of Housing and Community Development and the Virginia Housing Development Authority, will develop an online marketplace to help educate stakeholders on the program, share project ideas and pipeline, and connect
92
investors to businesses and property in Virginia’s Opportunity Zones. The Virginia Opportunity Zone Marketplace is expected to be launched in the fall of 2019.
There are eight designated Opportunity Zones in the Mary Ball Washington Region in the following localities; Fredericksburg City, Caroline, Spotsylvania, Essex, Gloucester, King and Queen, Lancaster and Richmond Counties.
RURAL COASTAL VIRGINIA COMMUNITY ENHANCEMENT AUTHORITY
The Rural Coastal Virginia Community Enhancement Authority was established in 2017 by acts of the Virginia General Assembly and covers the 12 rural counties of the Northern Neck, Middle Peninsula, and Accomack-Northampton planning districts: Accomack, Essex, Gloucester, King and Queen, King William, Lancaster, Mathews, Middlesex, Northampton, Northumberland, Richmond, and Westmoreland. The Authority is created for the purpose of serving as a regional economic development body. The Board of the Rural Coastal Virginia Community Enhancement Authority consists of up to 15 members as follows: one member of each of the 12 counties' governing bodies, three at-large members appointed by the Governor and the Secretary of Commerce and Trade or his designee. The counties and the planning district commissions that make up the Authority provide staffing and support to the Authority.
The Authority is established to:
• Assist the region in obtaining necessary job training or employment-related education, leadership and civic development, and business development, especially entrepreneurship for the coastal region, • Fund demonstration projects, and conduct research, evaluations, and assessments of the coastal region's assets and needs, and • Provide special assistance to distressed and underdeveloped counties within the coastal region. Agencies of the Commonwealth shall review grant program eligibility requirements, and amend such requirements as appropriate, for purposes of recognizing the unique
93
socioeconomic and demographic challenges faced by rural coastal localities and the inability to qualify for financial assistance.
The Authority may seek and approve loans and solicit donations, grants, and any other funding from the Commonwealth, the federal government, and regional, local government, and private entities to carry out its purposes, powers, and duties. At present the Authority has yet to be organized but efforts are underway to have it organized by the fall of 2019. To date, the Authority has yet to have a funding source to support its functions.
94
Appendix E. Sites, Buildings, Prospect Recommendations and Prospect Visits Analysis
The purpose of this analysis is to study the availability of business real estate, “product” (meaning sites and buildings) and prospect activity as reported by Virginia Economic Development Partnership (VEDP). The analysis presents data at the GO Virginia regional level, economic development region and locality level. The consultants were able to obtain a database from VEDP that contains the details of prospect recommendations and prospect visits for the years 2014 to 2018. In addition, the data related to available sites and buildings was taken from the VEDP VirginiaScan website in May of 2019. The data for some of localities was not available in these databases and is noted in the relevant sections of this analysis.
SITES
This analysis looked at the total distribution of available business sites across the region and the utility and size characteristics of those sites. There are a total of 149 business sites listed on VEDP VirginiaScan website for the localities in Region 6. There was not any data listed for Northumberland, Mathews, Middlesex or Westmoreland Counties. It is assumed that these localities do not have business sites that meet the VEDP requirements for inclusion in the database. Of the 149 sites 114 (76.5 percent) were in the Fredericksburg sub-region. 33 sites (22.1 percent) were in the Middle Peninsula and 2 sites (1.3 percent) in the Northern Neck. Spotsylvania (38 - 25.5 percent) Stafford (35 – 23.5 percent) and Caroline (21 – 21.5 percent) had the majority, 70.5 percent, of the sites within the region.
The same distribution pattern is present for those sites with utilities (water and sewer) available. Of the 92 sites with water and sewer 84 are in the Fredericksburg sub-region (91.3 percent). Six are in the Middle peninsula and only 2 are in the Northern Neck. 56 sites have natural gas available to the sites and all are in the Fredericksburg sub-region.
95
Most manufacturing and distribution/logistics businesses require larger sites, typically above 50 acres. Again, almost all the larger sites greater than 50 acres, 56 (93.5 percent), are located in the Fredericksburg sub-region. There are 2 certified sites for data centers; both are in Stafford County.
Appendix E. Table 1 provides a detailed listing of business sites and their characteristics by individual locality in Region 6.
Appendix E. Table 1. Site Inventory - Mary Ball Washington Region Sites Size - Acres with W & S Locality Total Total 25 ac. + 50 ac. + 100 ac. + 250 ac. + Gas Caroline 32 18 10 6 4 3 12 Fredericksburg 6 5 4 3 1 0 3 King George 3 1 1 0 0 0 0 Spotsylvania 38 27 12 7 4 4 21 Stafford 35 33 19 13 7 2 20 Fredericksburg Region 114 84 46 29 16 9 56
Essex 11 1 1 1 0 0 0 Gloucester 15 3 0 0 0 0 0 King and Queen 2 0 0 0 0 0 0 King William 5 2 0 0 0 0 0 Mathews * * * * * * * Middlesex * * * * * * * Middle Peninsula 33 6 1 1 0 0 0
Lancaster 1 1 1 1 1 0 0 Northumberland * * * * * * * Richmond 1 1 1 0 0 0 0 Westmoreland * * * * * * * Northern Neck 2 2 2 1 0 0 0
Region 6 Total 149 92 49 31 16 9 56 * No Data Available
96
BUILDINGS
This analysis looked at the distribution of available industrial, flex and office buildings across the region according to tenancy, size and other characteristics. Industrial and flex buildings were analyzed separately form office buildings. There was not any building data listed for eight localities, King and Queen, King William, Lancaster, Northumberland, Mathews, Middlesex, Richmond or Westmoreland Counties. In addition, Caroline County did not have industrial or flex buildings listed, and King George did not have any office buildings listed. It is assumed that these localities do not have buildings that meet the VEDP requirements for inclusion in the database.
There are a total of 44 industrial and flex buildings listed on VEDP VirginiaScan website for the localities in Region 6. Of the 44 buildings 41 (93.1 percent) were in the Fredericksburg sub-region. The remainder 3 buildings (6.9 percent) were in the Middle Peninsula. Spotsylvania (29 – 65.9 percent) and Stafford (10 – 22.7 percent) had the majority, 86.6 percent, of the industrial and flex buildings within the region.
A vast majority of the Industrial/flex buildings, 41 (93.1 percent), are for lease and 14 are for sale. 14 of the buildings are considered flex buildings and there are not any publicly owned shell buildings in the region. 42 of the industrial/flex buildings are served by natural gas and 27 have ceilings heights over 20 ft. with only 4 buildings with ceiling heights greater than 30 ft.
Most of the industrial/flex buildings are greater than 10,000 sq. ft., 38 (86.3 percent). Only 11 of the buildings are greater than 50,000 sq. ft. with two greater than 100,000 sq. ft.
97
Appendix E. Table 2 provides a detail on the distribution of industrial/flex buildings throughout the region.
Appendix E. Table 2. GO VA Region 6 Building Inventory, Industrial and Flex Buildings Size - Sq. Ft. with W & S Ceiling Height For Locality Total Lease Flex 10K 50K 100K 250K Gas 20 ft. Sale 30 ft. + + + + + + Caroline 0 0 0 0 0 0 0 0 0 0 0 Fredericksburg 1 0 1 0 1 1 0 0 1 1 0 King George 1 0 1 0 1 1 0 0 0 1 0 Spotsylvania 29 8 26 9 22 7 1 0 24 17 3 Stafford 10 4 10 5 6 1 1 1 7 5 1 Fredericksburg Region 41 12 38 14 30 10 2 1 42 27 4
Essex 2 2 2 2 2 0 0 0 0 0 0 Gloucester 1 0 1 1 0 0 0 0 0 0 0 King and Queen 0 0 0 0 0 0 0 0 0 0 0 King William 0 0 0 0 0 0 0 0 0 0 0 Mathews 0 0 0 0 0 0 0 0 0 0 0 Middlesex 0 0 0 0 0 0 0 0 0 0 0 Middle Peninsula 3 2 3 3 2 0 0 0 0 0 0
Lancaster 0 0 0 0 0 0 0 0 0 0 0 Northumberland 0 0 0 0 0 0 0 0 0 0 0 Richmond 0 0 0 0 0 0 0 0 0 0 0 Westmoreland 0 0 0 0 0 0 0 0 0 0 0 Northern Neck 0 0 0 0 0 0 0 0 0 0 0
Region 6 Total 44 14 41 17 32 10 2 1 42 27 4
98
Appendix E. Table 3 lists an inventory and characteristics of 53 office buildings listed on the VEDP website. All but five of the buildings, 90.6 percent, are located in the Fredericksburg sub-region. The Northern Neck did not have any office buildings listed. Only two localities, Spotsylvania and Stafford Counties, had Class A office buildings available and these 7 represented 13.2 percent of all of the office buildings.
Appendix E. Table 3. Region 6 - Office Building Inventory For Class Locality Total Lease Size - Sq. Ft. Sale A 5,000- 10,000- 20,000- 50,000+ 10,000 20,000 50,000 Caroline 1 0 1 0 1 0 0 0 Fredericksburg 5 0 5 2 3 2 1 0 King George 0 0 0 0 0 0 0 0 Spotsylvania 22 7 22 2 18 12 3 1 Stafford 20 6 20 3 18 11 5 0 Fredericksburg Region 48 13 48 7 40 24 9 1
Essex 2 2 2 0 2 2 0 0 Gloucester 3 0 3 0 3 1 0 0 King and Queen 0 0 0 0 0 0 0 0 King William 0 0 0 0 0 0 0 0 Mathews 0 0 0 0 0 0 0 0 Middlesex 0 0 0 0 0 0 0 0
Middle Peninsula 5 2 5 0 5 3 0 0
Lancaster 0 0 0 0 0 0 0 0 Northumberland 0 0 0 0 0 0 0 0 Richmond 0 0 0 0 0 0 0 0 Westmoreland 0 0 0 0 0 0 0 0 Northern Neck 0 0 0 0 0 0 0 0
Region 6 Total 53 15 53 7 45 27 9 1
99
PROSPECT RECOMMENDATIONS
The analysis of the prospect recommendations is centered on the number, the type and the distribution of site recommendations from VEDP project managers over a five-year period from 2014 to 2018. Often the recommendations of VEDP represent the majority of prospect leads that rural localities receive during any calendar year. If a locality has manufacturing as a target industry, VEDP is an essential partner in expanding a locality’s or regions manufacturing base. Often site location consultants and major manufactures work though states’ economic development organizations. VEDP is the primary marketing and project management organization for out-of-state business locations.
The Mary Ball Washington Region had 243 site recommendations from VEDP for the five- years between 2014 and 2018. Almost 90 percent of the recommendations were for sites in the Fredericks region. The remaining 10 percent of the recommendations were split 7.4 percent to the Middle Peninsula and 2.5 percent in the Northern Neck. Sites in Spotsylvania, Caroline and Stafford Counties were recommended at the highest rate over the past five years at 71 (29.1 percent), 49 (20.2 percent) and 44 (18.1 percent) respectively.
100
Appendix E. Table 4 illustrates the distribution of the VEDP site recommendation in Region 6.
Appendix E. Table 4. Region 6 - VEDP Recommended Locations 2014 -2018 Recommendations Locality Total Sub Region Region 3
Caroline 49 22.5% 20.2% Fredericksburg 26 11.9% 10.7% King George 28 12.8% 11.5% Spotsylvania 71 32.6% 29.2% Stafford 44 20.2% 18.1% Fredericksburg Region 218 100.0% 89.7%
Essex 1 5.6% 0.4% Gloucester 3 16.7% 1.2% King and Queen 3 16.7% 1.2% King William 8 44.4% 3.3% Mathews 1 5.6% 0.4% Middlesex 2 11.1% 0.8% Middle Peninsula 18 100.0% 7.4%
Lancaster 1 16.7% 0.4% Northumberland * * * Richmond 3 50.0% 1.2% Westmoreland 2 33.3% 0.8% Northern Neck 6 100.0% 2.5%
Region 6 Total 243 * No Data Available for Northumberland County
The vast number of site location recommendations is related to manufacturing use. Often a prospect will have several components/uses of their proposed facility. For example, a manufacturing prospect may have a warehouse/distribution (W&D) use, be the proposed headquarters, have staff offices, and have a research and development (R&D) function. In this case all of these uses would be listed in the VEDP file. One-hundred seventy-nine of 243, or 73.7 percent, of the recommendations were related to a manufacturing use. This understates manufacturing as the major use of the proposed facility since other uses are often is related to manufacturing. Often the other uses, W&D, office, headquarters and R&D
101
are combined with a primary manufacturing function. Typically, service use is not combined with manufacturing. Service uses only represent 12.3 percent of prospect recommendations.
Appendix E. Table 5. Region 6 – VEDP Recommended Locations 2014 -2018 Facility Type Locality Total Mfg. W&D Office Hqtrs. Service R&D Caroline 49 30 15 7 7 5 4 Fredericksburg 26 21 6 3 4 6 1 King George 28 23 13 3 4 4 2 Spotsylvania 71 53 22 14 5 7 2 Stafford 44 30 10 9 3 5 3 Fredericksburg Region 218 157 66 36 23 27 12
Essex 1 1 0 0 0 0 0 Gloucester 3 3 1 1 2 0 0 King and Queen 3 3 1 0 1 2 0 King William 8 8 2 0 2 1 0 Mathews 1 0 1 0 0 0 0 Middlesex 2 2 0 1 0 0 1 Middle Peninsula 18 17 5 2 5 3 1
Lancaster 1 0 0 1 0 0 0 Northumberland * * * * * * * Richmond 3 3 1 1 0 0 0 Westmoreland 2 2 1 0 1 0 0 Northern Neck 5 5 1 2 1 0 0
Region 6 Total 243 179 72 40 29 30 13 * No Data Available for Northumberland County
Based on the site recommendations what has been the success of prospects choosing Virginia? Appendix E. Table 6 illustrates the status or prospects over the five years 2014 through 2018. Most prospects disengage with VEDP, 60 percent of the time. This could be for a variety of reasons: they choose not to pursue the project, they choose to expand at an existing facility, or they delay their plans for expansion to an uncertain date, etc. Business prospects do not always share the reasons for disengagement. Fourteen percent of the site recommendations choose a Virginia site for their expansion. The figures in Appendix E.
102
Table 6 reflect a win/location for Virginia not necessarily a win for the individual locality. From the known data, prospects choose another state 12 percent of the total number of site recommendations. Fourteen percent of the total site recommendations were still active in 2019.
Appendix E. Table 6. Region 6 - VEDP Recommended Locations 2014 -2018 Stage Locality Total Won Lost Disengaged Active Caroline 49 6 8 27 8 Fredericksburg 26 6 3 13 4 King George 28 5 3 15 5 Spotsylvania 71 7 8 47 9 Stafford 44 8 5 27 4 Fredericksburg Region 218 32 27 129 30
Essex 1 0 6 1 0 Gloucester 3 0 0 3 0 King and Queen 3 0 0 3 1 King William 8 0 2 5 1 Mathews 1 1 0 0 0 Middlesex 2 0 0 2 0 Middle Peninsula 18 1 2 13 3
Lancaster 1 0 0 1 0 Northumberland * * * * * Richmond 3 1 1 1 0 Westmoreland 2 0 0 1 1 Northern Neck 5 1 1 3 1
Region 6 Total 243 34 30 145 34 * No Data Available for Northumberland County
The number of site recommendations made over the five years ranged from a high of 76 in 2018 to a low of 29 in 2014. The Fredericksburg sub-region had the largest number of recommendations each year and the annual distribution of recommendations among the Fredericksburg localities varied considerably across the five years. In the Middle Peninsula,
103
2018 was a banner year with over half of the recommendations for the 5-year period coming in that year.
Appendix E. Table 7. Region 6 - VEDP Recommended Locations 2014 - 2018 Locality Total 2014 2015 2016 2017 2018 Caroline 49 4 8 9 8 20 Fredericksburg 26 3 6 4 3 10 King George 28 5 7 4 6 6 Spotsylvania 71 8 18 18 9 18 Stafford 44 8 13 9 5 9 Fredericksburg Region 218 28 53 43 31 64
Essex 1 0 0 0 0 1 Gloucester 3 0 0 1 0 2 King and Queen 3 0 1 1 0 1 King William 8 0 2 0 2 4 Mathews 1 0 0 0 0 1 Middlesex 2 0 1 0 0 1 Middle Peninsula 18 0 4 2 2 10
Lancaster 1 1 0 0 0 0 Northumberland * * * * * * Richmond 3 0 0 0 2 1 Westmoreland 2 0 0 0 1 1 Northern Neck 5 1 0 0 3 2
Region 6 Total 243 29 57 45 36 76 * No Data Available for Northumberland County
PROSPECT VISITS
The same patterns emerge when reviewing the prospect visits data as was present when analyzing the site recommendation data. Logic indicates the larger number of recommendations a locality receives the greater the likelihood that a locality will receive a prospect visit. The Fredericksburg sub-region received 36 out of 47 (76.6 percent) of the region’s prospect visits over the five-year period versus 89.7 percent of the site recommendations. Caroline, Stafford and Spotsylvania Counties had the largest number of prospect visits at 10, 10 and 7 respectively. The Middle Peninsula received 7 visits (14.9 percent) and the Northern Neck received 4 visits (8.5 percent).
104
Manufacturing prospects again dominated the prospect visits, 29 out of a total of 47 (61.7 percent). The Fredericksburg region had 19 manufactures visit the region or 52.8 percent of the total. All but one of the prospect visits to the Middle Peninsula and Northern Neck were manufactures.
Appendix E. Table 8. Region 6 - VEDP Prospect Visits 2014 -2018 PROSPECT VISITS Locality Sub Total Region 3 Mfg. Sub Region Region 3 Region Caroline 10 27.8% 21.3% 6 31.6% 20.7% Fredericksburg 5 13.9% 10.6% 1 5.3% 3.4% King George 4 11.1% 8.5% 2 10.5% 6.9% Spotsylvania 7 19.4% 14.9% 7 36.8% 24.1% Stafford 10 27.8% 21.3% 3 15.8% 10.3% Fredericksburg Region 36 100.0% 76.6% 19 100.0% 65.5%
Essex 0 0.0% 0.0% 0 0.0% 0.0% Gloucester 4 57.1% 8.5% 4 57.1% 13.8% King and Queen 1 14.3% 2.1% 1 14.3% 3.4% King William 1 14.3% 2.1% 1 14.3% 3.4% Mathews 0 0.0% 0.0% 0 0.0% 0.0% Middlesex 1 14.3% 2.1% 1 14.3% 3.4% Middle Peninsula 7 100.0% 14.9% 7 100.0% 24.1%
Lancaster 0 0.0% 0.0% 0 0.0% 0.0% Northumberland * * * * * * Richmond 3 75.0% 6.4% 2 66.7% 6.9% Westmoreland 1 25.0% 2.1% 1 33.3% 3.4% Northern Neck 4 100.0% 8.5% 3 100.0% 10.3%
Region 6 Total 47 29 * No Data Available for Northumberland County
Based on prospect visits, how many prospects choose Virginia? Appendix E. Table 9 illustrates the status or prospects over the five years 2014 through 2018. Almost half (49 percent) of prospects disengage with VEDP. This could be for a variety of reasons. For example, they choose not to pursue the project, they choose to expand at an existing facility, or they delay their plans for expansion to an uncertain date. Business prospects do
105
not always share the reasons for disengagement. As illustrated by the data, if a prospect visits a Virginia site there is a one in three chance that they will locate in Virginia. Thirty-six percent of the prospects that visited the region selected a Virginia location for their expansion. Appendix E. Table 9 reflects a win/location for Virginia not necessarily a win for the individual locality. From the known data, 11 percent of the prospects chose another state after making a visit. Four percent of the prospects that made a visit were still active in 2019.
Appendix E. Table 9. Region 6 - VEDP Prospect Visits 2014 -2018 Stage Locality Won Lost Disengaged Active Caroline 3 1 5 1 Fredericksburg 1 1 3 0 King George 3 0 1 0 Spotsylvania 2 0 5 0 Stafford 4 2 4 0 Fredericksburg Region 13 4 18 1
Essex 0 0 0 0 Gloucester 1 0 3 0 King and Queen 1 0 0 0 King William 1 0 0 0 Mathews 0 0 0 0 Middlesex 0 0 1 0 Middle Peninsula 3 0 4 0
Lancaster 0 0 0 0 Northumberland 0 0 0 0 Richmond 0 1 1 1 Westmoreland 1 0 0 0 Northern Neck 1 1 1 1
Region 6 Total 17 5 23 2
The number of prospect visits over the past five years ranged from a high of 16 in 2016 to a low of 5 in 2017. The Fredericksburg sub-region again had the largest number of visits each year and the annual distribution of recommendations among the Fredericksburg sub-
106
region localities varied considerably across the five years except for Stafford that had 2 visits each year. For the Middle Peninsula, 2016 was a banner year, with slightly less than half of the total number of visits in the 5-year period occurring that year. Appendix E. Table 10 lists the number prospect visits by year for each locality in the region.
Appendix E. Table 10. Region 6 - VEDP Prospect Visits 2014 -2018 Prospect Visit Date Locality 2014 2015 2016 2017 2018
Caroline 3 2 4 0 1 Fredericksburg 1 1 2 1 0 King George 1 2 1 0 0 Spotsylvania 1 2 4 0 0 Stafford 2 2 2 2 2 Fredericksburg Region 8 9 13 3 3
Essex 0 0 0 0 0 Gloucester 0 0 3 1 0 King and Queen 0 0 0 0 1 King William 1 0 0 0 0 Mathews 0 0 0 0 0 Middlesex 0 1 0 0 0 Middle Peninsula 1 1 3 1 1
Lancaster 0 0 0 0 0 Northumberland * * * * * Richmond 0 1 0 1 1 Westmoreland 0 0 0 0 1 Northern Neck 0 1 0 1 2
Region 6 Total 9 11 16 5 6 * No Data Available for Northumberland County
PROSPECT ACTIVITY RELATED TO PRODUCT AVAILABILITY
The central question for the Mary Ball Washington Regional Council is the relationship between the availability prepared sites for business expansion/location and actual prospect activity. Appendix E. Table 11 compares the availability of sites throughout the
107
region to site recommendations by VEDP and prospect visits to the locality. The data illustrates a direct correlation between the total number of prepared sites and prospect activity. Those localities that have prepared sites (served by water, sewer and gas) get recommended more frequently and receive the greater number of prospect visits.
Appendix E. Table 11. Region 6 - VEDP Recommended Sites/Prospect Visits 2014 -2018 Sites Recommendations Prospect Visits
50 Locality Total W&S Acres + Total Mfg. Total Mfg. /W&S Caroline 21.5% 19.6% 19.4% 20.2% 16.8% 21.3% 20.7% Fredericksburg 4.0% 5.4% 9.7% 10.7% 11.7% 10.6% 3.4% King George 2.0% 1.1% 0.0% 11.6% 12.8% 8.5% 6.9% Spotsylvania 25.5% 29.3% 22.6% 29.3% 29.6% 14.9% 24.1% Stafford 23.5% 35.9% 41.9% 18.2% 16.8% 21.3% 10.3% Fredericksburg 76.5% 91.3% 93.5% 90.0% 87.7% 76.6% 65.5% Region
Essex 7.4% 1.1% 3.2% 0.4% 0.6% 0.0% 0.0% Gloucester 10.1% 3.3% 0.0% 1.2% 1,7% 8.5% 13.8% King and Queen 1.3% 0.0% 0.0% 1.2% 1,7% 2.1% 2.4% King William 3.4% 2.2% 0.0% 3.3% 4.5% 2.1% 3.4% Mathews 0.0% 0.0% 0.0% 0.4% 0.0% 0.0% 0.0% Middlesex 0.0% 0.0% 0.0% 0.8% 1.1% 2.1% 3.4% Middle 22.1% 6.5% 3.2% 7.3% 9.5% 14.9% 24.1% Peninsula
Lancaster 0.7% 1.1% 3.2% 0.4% 0.0% 0.0% 0.0% Northumberland * * * * * * * Richmond 0.7% 1.1% 0.0% 1.2% 1.7% 6.4% 6.9% Westmoreland 0.0% 0.0% 0.0% 0.8% 1.1% 2.1% 3.4% Northern Neck 1.3% 2.2% 3.2% 2.4% 2.8% 8.5% 10.3%
Region 6 Total # 149 92 31 242 179 47 29 * No Data Available for Northumberland County
108
CONCLUSIONS AND FINDINGS ON SITES, BUILDINGS, PROSPECT RECOMMENDATIONS, AND PROSPECT VISITS
The following are the primary findings and conclusions form an analysis of VEDP data on available sites and buildings for business expansion/location and VEDP prospect activity, site recommendations and prospect visits.
• Available sites and buildings are concentrated in the Fredericksburg sub-region. • There are only 2 certified sites in the region – both data center certified in Stafford County. • There are very few publicly owned/controlled sites in the region. • Manufacturing and Distribution/Logistics businesses (priority industry clusters) typically require larger sites with utility service (water, sewer, and gas). There is a limited selection of quality business sites meeting these industry standards. • About 91 percent of the available listed office space is located in the Fredericksburg sub-region. • Professional, Technical and Scientific Services businesses (priority industry cluster) typically require quality office space – there is a limited selection of Class A office space available in the region and it is concentrated in just two of localities. • Ninety percent of the VEDP site recommendations are in the Fredericksburg sub-region. • Almost three-fourths of all site recommendations had manufacturing as a primary use. • Fourteen percent of the site recommendations resulted in a decision for a Virginia location. Sixty percent of the site recommendations never materialize because the prospect disengages. • Prospect visits mirror the trends of site recommendations in geographic distribution and primary use – Fredericksburg sub-region concentration and manufacturing use dominance. • Once a prospect visits the region, there is a one in three chance that it will choose a Virginia location. • There is a direct correlation between the availability of quality business sites and prospect activity from VEDP.
109
• The greater the selection/distribution of prepared larger sites (above 50 acres) the greater the likelihood of prospect activity in the priority industry clusters, manufacturing and distribution/logistics. • The greater selection/distribution of Class A office space the greater the opportunity for expansion of the professional, technical and scientific services priority industry cluster.
110 Mary Ball Washington Regional Council GO Virginia Region 6 Meeting Schedule
2019
September 20, 2019 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
October 7, 2019 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Drive, Warsaw, VA 22572
November 15, 2019 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
December 9, 2019 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Electric Cooperative, Bowling Green Office 14380 Fredericksburg Turnpike, Woodford, VA 22580
2020
January 17, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
February 10, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Glenns Campus 12745 College Drive, Glenns, VA 23149
March 20, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
April 13, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Drive, Warsaw, VA 22572
Mary Ball Washington Regional Council GO Virginia Region 6 Meeting Schedule
May 15, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
June 8, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Electric Cooperative, Bowling Green Office 14380 Fredericksburg Turnpike, Woodford, VA 22580
July 17, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
August 10, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Glenns Campus 12745 College Drive, Glenns, VA 23149
September 18, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
October 5, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Drive, Warsaw, VA 22572
November 20, 2020 Executive Committee Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Community College, Warsaw Campus 52 Campus Dr, Warsaw, VA 22572
December 14, 2020 Region 6 Council Meeting 11:00 a.m. to 1:00 p.m. Rappahannock Electric Cooperative, Bowling Green Office 14380 Fredericksburg Turnpike, Woodford, VA 22580 8/22/2019
GROWTH AND DIVERSIFICATION PLAN UPDATE REVIEW MARY BALL WASHINGTON Priority Growth Clusters: REGIONAL COUNCIL • Seafood/Aquaculture/Commercial GO VIRGINIA - REGION 6 Fishing/Marine Industries AUGUST 12, 2019 • Forestry/Wood Products/Paper • Manufacturing • Logistics/Distribution
MARY BALL WASHINGTON REGIONAL • Professional, Scientific and Technical COUNCIL MEETING Services • information/Data Centers
GROWTH AND GROWTH AND DIVERSIFICATION PLAN DIVERSIFICATION PLAN UPDATE REVIEW UPDATE REVIEW Economic Trends and Drivers: Workforce Gaps in Middle-skill Occupations: • Automotive Service Technicians and Mechanics, • Smaller % private sector employment than VA • Bus and Truck Mechanics and Diesel Engine Specialists, • Fredericksburg area employment growth at a • Dental Assistants, faster pace • Electrical Power-Line Installers and Repairers, • Unemployment decline – 3% • Electricians, • Weekly wages below the State - $806 vs. $1,113 • Heating, Air Conditioning, and Refrigeration Mechanics, • Heavy and Tractor-Trailer Truck Drivers, • Professional, Scientific and Technical Services • Industry and Machinery Mechanics, rebound – Up 739 jobs • Physical Therapist Assistants, and • 60% of workforce commutes out of the region • Plumbers, Pipefitters, and Steamfitters.
GROWTH AND GROWTH AND DIVERSIFICATION PLAN DIVERSIFICATION PLAN UPDATE REVIEW UPDATE - STRATEGIES
Goals (unchanged): Product (Sites & Buildings) • Accelerate Growth in High-Performance Clusters 1) VEDP 5-tier “Business Ready” • Increase Wages Classification System – Increase readiness • Modernize Natural Resource Based Industries 2) Increase Sites “Data Center Certified” • Increase the Supply of Trained Workers 3) Develop of “regional” business/industrial • Reduce Out-Commuting properties with cost/revenue sharing • Reliable and Affordable Broadband Region-wide agreements • Increase Tourism 4) Develop Speculative Office Buildings
1 8/22/2019
GROWTH AND REGION 6 – GROWTH AND DIVERSIFICATION PLAN DIVERSIFICATION PLAN - UPDATE - STRATEGIES RECOMMENDATIONS
Workforce Development Broadband Infrastructure 5) Realign Training/Education Programs 20) Implement PamunkeyNet 6) Expand “Work-Based” Learning Programs 21) Expand Public/Private Partnerships 7) Partnerships with Commonwealth Cyber Water – Based Economy Initiatives 22) Preserve/Develop Working Waterfronts 8) Career Occupational Pathways 23) Implement RVCEA 9) Expand Workforce Development Training 24) Establish “Center for Resiliency Facilities Innovation”
REGION 6 – GROWTH AND REGION 6 – GROWTH AND DIVERSIFICATION PLAN - DIVERSIFICATION PLAN STRATEGIES UPDATE – PIPELINE
Entrepreneurship Recommendations 10) Expand Youth Entrepreneurship 1. Fund a coordination function for Programs entrepreneurship initiatives. 11) Expand UMW SBDC 2. Adopt an affirmative policy related to the use of 12) Establish “Innovation Centers” the capacity building grants. 13) Expand financing options – REDCO 3. Facilitate forums on the revenue/cost sharing 14) Create “OZ Funds” agreements and RIFA structures. 15) Business Plan Competitions 16) Expand “PIA’s” – Research Institutions
REGION 6 – GROWTH AND GROWTH AND DIVERSIFICATION DIVERSIFICATION PLAN - PLAN UPDATE – DHCD STRATEGIES COMMENTS/RESPONSE
Business Scale-Up Comment - Response 17) Expand GENEDGE Assistance 1 – Condense the executive summary to 2-3 pages - Shortened the Executive Summary 18) Increase VEDP Export Assistance Program Participation 3 – Acknowledge challenges and the measures to overcome challenges rather than vent - Project 19) Develop New Product Lines Pipeline Analysis shortened, deleting the narrative on the specific references to program, policy and organizational obstacles 5 - Including more detail on how strategies could lead projects - New subheading added at the end of the Strategies/Recommendations section
2 8/22/2019
QUESTIONS?????
3