Economic Development CURRENT CONDITIONS The last Comprehensive Plan was adopted in 2008. Significant events related to economic development occurring between 2008 and 2014 include: The continued development of City Center at Oyster Point; The expansions of Christopher Newport University and Riverside Regional Medical Center; Lower Jefferson Avenue corridor streetscape improvements and adaptive re-use of historic buildings; A development agreement has been signed to develop “Brooks Crossing” located between 28th Street and 35th Street along Jefferson Avenue, including the construction of a new police precinct; The continued expansion of the Patrick Henry retail corridor northward along Jefferson Avenue and to the south with the approval of the Tech Center at Oyster Point Road and Jefferson Avenue; The announcement of a major advanced manufacturing project at Canon Virginia; and The approval of the 630 housing unit “Hilton Commons” development at Camp Morrison and the Apprentice School / adjacent mixed-use in the historic downtown. At the same time, the period between 2008 and 2014 brought new challenges for the City and the region. These include: The 2008 financial crises, the 2007 – 2011 housing foreclosure crises, the ensuing great recession and long economic recovery have all had a negative impact on economic development in Newport News. High unemployment nationally translated into higher unemployment in Newport News. However, Newport News remained somewhat protected from the economic downturn because of its heavy association with defense related industries and therefore the unemployment rate remained lower than the national level. 1 Figure 1: Percent Unemployed 2000 – 2013: Newport News vs. U.S. (Source: Bureau of Labor Statistics) As indicated in the Figure 2 below, after losing roughly 4,000 jobs during the recession, Newport News then gained approximately 7,000 new jobs since 2011. Figure 2: New Jobs City-wide (Source: County Business Patterns Report & Virginia Employment Commission) City 2008 89,034 <‐‐Source: County Business Patterns Report 2009 86,385 <‐‐Source: County Business Patterns Report 2010 85,647 <‐‐Source: County Business Patterns Report 2011 85,658 <‐‐Source: County Business Patterns Report 2012 94,629 <‐‐Source: VEC SES202 2013 92,775 <‐‐Source: VEC SES202 2 Although Newport News did not suffer a severe decline in housing prices relative to other cities in Hampton Roads or the country, over the past several years declining property values did negatively impact the city’s tax base and led to budgetary tightening with some cuts in City services. The continued impact of international economic competition, particularly from Asian countries such as China and South Korea, will weigh on the local manufacturing base; Budgetary and political struggles at the Federal level have led to a climate of uncertainty related to industries tied to national defense, particularly Newport News Shipyard, NASA Langley Research Center and Jefferson Lab, and Fort Eustis. The inability to reach political consensus in Washington and resulting across the board budget cuts (Sequestration), resulting in, at a minimum a lack of growth in the defense related industries, and at worst a potential severe reduction in defense manufacturing and subsequent downsizing. Newport News remains the economic engine of the Virginia Peninsula. In 2012, approximately 83,535 people, excluding military personnel, worked in Newport News. The economic base in Newport News is still heavily dependent on Newport News Shipbuilding and Fort Eustis. Both are tied to national defense. Nevertheless, the City's economic base continues to diversify with the expansion of Ferguson Industries, Continental AG, Liebherr industrial equipment, Jefferson Lab, Canon Virginia and companies in Oakland Industrial Park. Figure 3: Newport News Population over 16 – Employment Characteristics (Source: U.S. 2010 Census) 3 As indicated in Figure 4, “Manufacturing” still comprises a large percentage (21%) of Newport News’ employment sector, second only to “Other” (24%) which includes such employment as Professional Services, Construction, Real Estate and Rental, Finance, Wholesale Trade, Entertainment, and Educational services. Military, State and Local, and Health Care are all equal at 11%. Figure 4: Employment by Industry as Percent- 2012 (Source: HRPDC) New tourism and conference related development, such as the Marriott Hotel and Conference Center at City Center, the City’s historic attractions in the Lee Hall area, and the cultural attractions such as the Mariners Museum in the Avenue of the Arts district have made the city a tourist destination. There is also the possibility of better utilizing the rich history and beauty of the downtown, waterfront, and Southeast community to further assist in making tourism a growing component of the City’s economic base in the future. However, economic diversification will have to occur rapidly in the future to reduce the City's reliance on the national defense sector, particularly given the growing political and budgetary instability at the federal level. Regional Factors Hampton Roads is a very unique metropolitan area because it is so heavily dependent on the defense sector, and because there are so many large self-sufficient cities in the metropolitan area, which are also striving to diversify their economies. This has resulted in intense competition for the limited number of new manufacturing plants, high-tech 4 firms and office users. Due to both the long history of state-of-the-art shipbuilding, Jefferson Lab, and the NASA Langley Research Center, the Peninsula has a reputation for leadership in applied high technology. This has helped Newport News attract and retain technology-oriented companies. However, high technology spin-off does not happen by itself. Newport News must continue to work aggressively to capitalize on the presence of high technology in our economy. As Figures 5 and 6 indicate, Newport News’ percentage of income and employment share of Manufacturing, Federal, and Military industries have declined dramatically over the last 40 years. Incomes derived from those same industries have fallen from a high of 80% in the early 1970s to just above 50% as of 2011. Likewise, Newport News’ share of employment in Manufacturing, Federal, and Military (Figure 6) also declined from almost 60% in 1969 to just above 30% in 2011. Figure 5: Manufacturing, Federal Civilian and Military Incomes as a Share of Newport News Personal Income (Source: HRPDC) 5 Figure 6: Manufacturing, Federal Civilian and Military Incomes as a Share of Newport New Employment (Source- HRPDC) Urban Planning as an Economic Development Tool For the past several decades, there has been a national trend towards a convergence of urban planning and economic development to better meet consumer demands and enhance quality of life for citizens. Much of this convergence has centered on the concept of “New Urbanism.” This concept advocates that good architectural design, public spaces, and a return to an emphasis on walkability over the automobile, will help communities economically and make them more livable. The connection to economic growth is that, if communities are attractive places to live, better create a “sense of place,” and provide for a higher quality of life, then they will also be more attractive places to the higher income residents, retailers and employers that are critical to economic growth. There are many “tools” that are used to achieve the concept of “New Urbanism,” one such tool being mixed-use development. Mixed-use development can occur in many forms and fashion, but the underlying tenet is that by mixing land uses at one location – as opposed to the widely adopted Euclidean zoning practice of strictly 6 segregating uses to one use per site – you can reduce automobile use by placing uses within walking distance to each other. Also achieved is creating a greater sense of place, by increasing walkability and locating public spaces close to other uses, all of which leads to greater social interaction, and therefore greater sense of community. Another “New Urbanism” tool is Traditional Neighborhood Design, which utilize design and planning concepts that were popular during the “City Beautiful” movement prior to World War II. Such concepts include front porches, set back or separate garages, housing facing public parks and squares, living spaces above retail, on-street parking, and landscaped boulevards. Transit Oriented Development is another New Urbanism tool that emphasizes development around transit stations, and stations that have good connections to surrounding uses. The idea that high density residential development should be located within a 10 minute walk of a transit station is a core tenet to this tool. Transit Oriented Development is critical to reducing reliance on automobiles and reducing congestion, which can have negative impacts on economic development. The city has been successful in the past decade in implementing New Urbanism, which in turn has led to an increased sense of place, quality of life and continued economic growth. Some examples of planned and built New Urbanism projects include: PLANNED: Huntington Pointe Hilton Commons (Camp Morrison) Patrick Henry Place (partially complete) BUILT: City Center at Oyster Point Port Warwick Stony Run Village Madison Heights (scattered site infill) 7 While New Urbanism often relates to new development, it is also critical that urban planning emphasize the preservation