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Home My WebLink About022707 HREDAHREDA Update Briefing for Mayor Oberndorf and the Virginia Beach City Council February 27, 2007 Regionalism at Work “Global competition, a 21Century economic reality, is st typically seen as a national challenge, but the front lines of the battlefield are REGIONAL, where companies, workers, researchers, entrepreneurs, and governments come together to create a competitive advantage.” United States Department of Labor 1 Role of HREDA The Hampton Roads Economic Development Alliance promotes Virginia’s Hampton Roads as the perfect location for capital investment and business expansion. As the region’s lead economic marketing organization, the Alliance aggressively pursues new business opportunities throughout the world. 2 Hampton Roads Economic Development Alliance •$3.1 million Annual Budget •15 Participating Localities $1 per capita •$437,768 City of Virginia Beach Contribution (Non- Departmental budget) •Over 200 private investors provide $1.36 million in investment with a goal of matching the localities investment. 3 Private Sector Support 25% HREDA receives approximately of its private sector funding from businesses located in Virginia Beach—a sign of significant support! A Breakdown of HREDA Private Sector Support (2001-2006) Total HREDA Private Investors:Virginia Beach Private Investors: 20249 Total Private Sector HREDA Support: Support from Virginia Beach Private Sector: $6,114,6281,534,735 $ Actcom Inc.Dominion Virginia PowerHSMMReMax - The Will Carder Real Estate Team Anthem Blue Cross and Blue ShieldDragas Companies, TheKeane, Inc.Resource Bank Armada HofflerECPI College of TechnologyRose & Womble Realty Company KITCO Fiber Optics Atlantic Dominion DistributorsElectronic Systems, Inc. LandMark Design GroupRunnymede Corporation, The Beach Ford, Inc.Ellis-Gibson Development GroupLiberty Property TrustS. B. Ballard Construction Checkered Flag Motor Car CompanyEngineering Services, Inc.Long & Foster Real Estate, Inc.Sentara Healthcare Cherry, Bekaert and Holland, LLPFarm Fresh SupermarketsMSA, P.C.Summit Group of Virginia CMSS Architects, P.C.Freedom AutomotiveOlympia Development CorporationThalhimer/Cushman & Wakefield Continental Properties CorporationGreat Atlantic Management, LLCThe Ware Company PAPCO Oil Company Cox, Kliewer & Company, PCHall AutomotiveTidewater Hotels & Resorts Pembroke Enterprises, Inc. Divaris Real EstateHBA Architecture & EngineeringTroutman Sanders LLP R K Chevrolet-Buick, Subaru, R K Toyota-SCION Hourigan Construction Corp. Regent University 4 Leveraging Economic Development Marketing Services: Comprehensive ED: HREDAVirginia Beach Marketing MissionsExisting Industry Existing Industry generates 70% of all new jobs Trade Shows Research LeadsAsset Development Parks and Facilities Special Events Direct MailSmall Business International Promo CampaignsHospitality / Tourism Consultant RelationshipsRetail Nationwide Public RelationsEntrepreneurial Programs TelemarketingWorkforce Development Advertising and PromotionsCommunity Redevelopment Research Studies & StrategiesEconomic Development Strategies HREDAVirginia Beach ED New Business Attraction“Deal Closer” •• 5 2006: Another Aggressive Year Marketing ActivityProject Sources Research Trade Show 2% Referral 233 Corporate Appointments 6% 8% 107 Consultant Appointments VEDP Marketing 75 Client Visits 12% Missions 15 Domestic Marketing Missions 57% Advertisment 13 Domestic Trade Shows 1% 2 International Trade Shows Broker / 15 International Marketing Missions Consultant 13 Special Events 6% 15 Consultant Missions and Events Direct/Web Driven 22,553 Telephone Calls 8% 170 Customized Data Packages This activity resulted in: City of Virginia Beach joins Alliance Team for Munich Mission 15 Client Visits for the City of and Business Seminar Virginia Beach 6 HREDA Promotions featuring the City of Virginia Beach 2006 STIHL Ad featured in2006 STIHL Ad featured in:2006 Jurisdictional Ads featured in: : Business Week, Forbes, Fast German American TradeInaugural ad for new campaign in Company, Fortune, Inc. and The Wall Street Journal German American Trade Money magazines membership directoryNew York region Boston, Chicago, New York Eastern US region Metro, Washington DC Metro Direct Mail Piece area markets Sent to 1,100 Site Selection Consultants; Projects; VEDP; and 15 national magazine editors 7 Select Virginia Beach Client Updates Project Sensor •British technology company manufactures vacuum tubes, radar systems and sensor products •US sales office and distribution center is currently based in New Yorkand is considering a relocation of their U.S. operation •The company visited Virginia Beach in August 2006 •Project is on hold for at least one year as the company focuses their attention on restructuring their operations as a result of a French business that they recently acquired Project Cardstock •High-end paper goods company that is seeking a 60,000 sq. ft. center expandable to 120,000 sq. ft. •In November 2006 the company visited Corporate Landing in Virginia Beach •Phase 1 of the project will include 43 employees at an annual payroll of $1.6 million; Phase 2 will add 80 jobs and will include some office operations •The project has been placed on hold until the company relocates its European distribution center rd •A return visit is expected 3Quarter 2007 8 Select Virginia Beach Client Updates Project AE •British-based global electronics distributor looking for a facility to house a 5-7 person sales office and a 3,000 SF distribution center •Company visited Virginia Beach in November 2006 •In January 2007, the company incorporated in the USA with the goal to be operational by June 2007 •The next visit is planned for April 2007 at which time a facility will be selected and a lease signed Project Paterson •Designs and manufactures components and sensors for the aerospace industry and is looking to relocate their New Jersey operation (upscale office component separated from a manufacturing building for stamping components) •Visited Virginia Beach in August 2006 •In January, the client informed HREDA of a change of project scope; the sales and engineering staff will remain in New Jersey, but the company is still looking to relocate manufacturing operations •Another visit is scheduled for May/June 2007 9 Hampton Roads Competitiveness Study StadtmauerBailkinBiggins Deloitte ConsultingKate McEnroe Consulting Wadley Donovan GutshawConsulting ChicagoAtlanta New York / New Jersey Key Points –Assets World class seaport / strong port Strong Military Presence •• activity Breadth and depth of labor market • Generally favorable quality of life • Diverse Industry Base • Right to work state • Moderate Business Cost • Scale (size) of region & central east • University / College Infrastructure • coast location 10 Hampton Roads Competitiveness Study Key Points –Disadvantages Potential for future labor shortages • Lack of Leading Edge Incentives • State of Virginia • Labor shortages in specific areas – • Local incentives • IT, specialized engineering Machinery and tools tax • No tax credit explicitly for headquarters • Increasing labor competition and • market tightness Poor national/international air access • Limited clustering, especially • Highway Transportation • advanced manufacturing / R&D Distant linkages to I-95 and I-85 • Difficult commuting patterns over • Presence of high-profile companies in • waterways the region generally not known Lack of available modern industrial • outside the area and office buildings 11 Virginia Beach Competitiveness Moving Forward Issues Improved Communications • Low Unemployment • Virginia Beach: 3.1% • Special Initiatives • U.S. Average: 4.6% • Strategic Plan • Availability of Product • Virginia Beach vacancy rate: 5.37% • Hampton Roads vacancy rate: 7.40% • Housing Costs • New HomeExisting Home Virginia Beach$464,344$331,098 Southside $371,899$237,688 Hampton Roads Difference$92,444$93,409 12 Special Initiatives Initiatives designed specifically for the City of Virginia Beach: ? Marketing Mission to Israel ? Northern Virginia event with government and defense contractors ? Minority Manufacturing Alignment Symposium ? Headquarters Marketing Mission ? Medical Sector Marketing Mission ? India Marketing Mission and Governor’s Trade Mission ? Nomination of Virginia Beach as one of Foreign Direct Investment Magazine’s 2007-2008 North American Cities of the Future 13