Allies in Economic Development - Case for Investment

ALLIES

in ECONOMIC DEVELOPMENT

ACHIEVING MORE FOR HAMPTON ROADS

HAMPTON ROADS ALLIANCE

Case for Support 2023-2027

A message from Campaign Co-Chairs

We want to personally thank you for your interest in growing the Hampton Roads regional economy. The Alliance works collaboratively to lead the region in attracting, growing, and retaining companies and talent to create a more resilient, inclusive, and equitable region of choice. Now more than ever, momentum is aligning for change. Despite economic turmoil caused by the COVID-19 pandemic, 2020-2022 represents the best three years of supported job growth by the Alliance in nearly 20 years. The groundwork for transformational change is laid and the team is in place and, with the right resources and collaborative support, Hampton Roads will compete and win against peer and competitor regions.

We will put the regional economy on a trajectory of higher growth by increasing productivity of firms and workers in a way that raises standards of living for all. Engaged leadership and proper resourcing are required to achieve measurable results. Private-sector involvement in the Alliance is essential, because businesses create jobs, not government.

The Allies in Economic Development campaign is a five-year strategic plan that positions the Alliance as a high-performance regional economic development organization acting as a catalyst for growth and collaboration. To this end, the campaign will focus on three goals, each supported by several strategic initiatives and tactics.

Goal 1: Build a world-class regional economic development ecosystem.

Goal 2: Invest in our sites & our people.

Goal 3: Strengthen our region’s resiliency.

Everything we do will be impacted by our ability to develop, recruit, and retain talent. The Alliance is proud to represent 14 localities who, with the support of nearly 70 private-sector investors, guide and resource the organization and its regional economic development efforts. Those efforts focus on business attraction, business expansion and business intelligence. By investing in our five-year plan, you are helping the region advance toward its collective goals, aiding existing businesses that foster regional growth, and forging relationships with other leaders committed to our region. We are convinced there is no better time than now to focus on these critical areas of work to ensure our region continues to thrive. That is why we and our businesses are investing in the plan. We ask you to also invest and be an Ally in Economic Development, because together, we will achieve more for Hampton Roads.

Hampton Roads leaders have visited, studied, and read about many communities and regions across the country that have made huge progress over the past 10, 20 or 30 years –communities as small as Grand Rapids, Michigan; Erie, Pennsylvania; and Northeast Ohio to others as big as Chicago. Our region has as many challenges as any of these regions, but also just as many assets and advantages including our world-class maritime industrial base that consists of our port, military presence, shipbuilding and repair industry, and now offshore wind industry. We have amazing facilities and talent at NASA, Jefferson Lab and Wallops Island. We have an enviable arts, culture, and music scene. The region hosts outstanding higher education institutions with more than 100,000 students at any given time and a renewable supply of talent in the form of 15,000 exiting military personnel every year.

Yet – we must acknowledge that we have not fully leveraged these assets. Our local economists tell us our regional economy is and has been sluggish for years as our region has consistently trailed our peers in metrics like job growth, wage growth and GDP.

We need private-sector leadership and vision to put Hampton Roads on a growth trajectory for the coming decades and that vision must include organization, structure, and investments in regional economic development and marketing. The leadership must provide practical solutions to create regional economic growth, economic inclusion, and environmental sustainability.

The good news is we have the ingredients, and we are underway. We are collaborating to a degree that has not been seen in this region for decades. Just look at the $5B regional transportation package under construction, the reformed regional economic development organization – the Hampton Roads Alliance, the Hampton Roads Workforce Council which serves the entire region, and the Hampton Roads Business Roundtable which is providing funding and political advocacy.

The other good news is the world is changing dramatically. No one knows what normal will be in the coming days as we continue to live with COVID and other global impacts, but communities that position themselves effectively can leapfrog the competition. Those that do not will be left behind.

Make no mistake, Hampton Roads is in a competition for jobs, talent, and investment which impact our quality of life. All the regions we have studied and visited are fiercely competitive when it comes to economic development. We need to do the same.

Hampton Roads:

• Is underperforming and falling behind peer and competitor regions.

• Ranks 38th for change in prosperity.

• Ranks 36th for change in productivity.

• Ranks 36th for change in average annual wage.

• Ranks 40th for change in standard of living.

• Ranks 33rd for change in median earnings.

• Will continue to demonstrate subpar performance without regional intervention.

The Hampton Roads Alliance (the Alliance) is the leading regional economic development organization for the Hampton Roads region of Virginia. It is a nonprofit, publicprivate partnership supported and led by the region’s most influential business leaders, local governments, and top academic institutions — all of whom are dedicated to the creation of a more diverse, growing and prosperous economy. The Alliance is proud to represent 14 localities who, with the support of over 70 private sector investors, govern and resource the organization and its regional economic development efforts. The Hampton Roads Alliance’s mission is to work collaboratively to lead the Hampton Roads region in attracting, growing and retaining companies and talent to create a more resilient, inclusive and equitable region of choice. The Alliance serves as a catalyst for new business attraction, existing business growth and long-term business environment improvements in the Hampton Roads region. We do this by proactively:

Marketing Hampton Roads, Virginia as a globally competitive location for business and talent.

Leading collaborative processes across peer organizations to leverage complementary assets and strengthen coordinated action.

Facilitating decision processes for companies considering Hampton Roads for new business investments and existing business expansion.

Engaging the region’s top business, academic, and elected leaders to understand key trends impacting the region’s economic competitiveness.

Providing assistance to existing businesses that foster regional growth.

Utilizing multiple databases and statistical platforms to provide relevant, comprehensive, and up-to-date reports and research for our prospects, partners and more.

In 2018, the Alliance engaged IBM-Plant Location International to develop a comprehensive, regional investment promotion strategy for the Hampton Roads region.

A key input into this process was deep stakeholder engagement. Through a robust set of facilitated sessions with regional business leaders and key stakeholders, the Alliance identified key improvement needs within the region. IBM-PLI took these needs and developed a report on Inward Investment and Business Environment Improvement Actions in which they:

• Evaluated and selected the best sectors for diversified growth.

• Analyzed the competitiveness of the Hampton Roads region.

• Developed a national best practice Go-To-Market Strategy.

• Identified needed Competitiveness Improvement Actions.

Beginning in 2019, the Alliance has diligently implemented the recommendations from the IBM plan, and we are experiencing the results. Since 2020, the Alliance has supported 22 project announcements that have brought 3,596 jobs and $954 million in capital investment.

3-YEAR RESULTS

2020 7 2,100 $330,000,000 2021 7 800 $280,000,000 2022 8 696 $344,000,000

Total 22

3,596 $954,000,000 projects jobs created in capital investment

Despite economic turmoil caused by the Covid-19 pandemic, 2020-2022 represents the best three years of supported job growth by the Alliance in nearly 20 years.

CAMPAIGN GOALS & INITIATIVES

The Allies in Economic Development campaign is a five-year strategic plan that positions the Alliance as a high-performance regional economic development organization acting as a catalyst for growth and collaboration. To this end, the campaign will focus on three goals, each supported by several strategic initiatives and tactics.

Goal 1: Build a world-class regional economic development ecosystem. Targeted Business Development

The Alliance will proactively engage target industry sectors where the Hampton Roads region holds a competitive value proposition and promote the region’s assets to prospective domestic and international companies, as well as existing businesses.

Engaged Next Generation Marketing

In the digital age, consistent and engaging messaging is critical to an organization’s success. The Alliance will clarify and articulate the region’s business identity and adopt a next generation marketing program to include best in class communications and lead generation delivery systems.

Integrated Regional Intelligence

Understanding market conditions drives competitive positioning for business growth and investment. The Alliance aims to strengthen the model for regional competitiveness by organizing around business intelligence to provide relevant, comprehensive data and reports to all stakeholders.

ALLIES

Goal 2: Invest in our sites & our people.

Creative Real Estate Solutions

In the past decade, the lack of business-ready sites has been among the main reasons why Virginia lost out on major projects. The Alliance will work to promote the region’s sites and buildings, secure funding to advance existing sites, find additional sites for development, and encourage regional cooperation through the Eastern Virginia Regional Industrial Facility Authority (EVRIFA).

Enhanced Talent Recruitment

Finding and retaining talented and skilled individuals is a critical component of attracting and retaining companies. Given the region’s large number of college graduates and military personnel, the Alliance should work to recruit these talented individuals to return or stay in Hampton Roads to advance their careers.

Goal 3: Strengthen our region’s resiliency.

Leading Energy Portfolio

Energy transformation presents economic opportunity to the region. To this end, the Alliance aims to position Hampton Roads as a leading region with a diversified energy portfolio that embraces existing assets and encourages renewable energy from sources such as offshore wind.

Emphasis on Diversity & Inclusion

Recognizing the importance of including all members of the Hampton Roads community, the Alliance will create opportunities for small, minority-owned, and women-owned firms to grow and participate in the supply chain.

TARGET INDUSTRIES

Business & Shared Services

Hampton Roads has an advantageous combination of high quality and competitive costs relating to the Business and Shared Services industry sector. The strengths that drive regional competitiveness include its employment base, operating environment, connectivity, workforce, and education. Based upon a recent study, Financial Transaction Processing, Inside Sales, and Healthcare Back Office are three segments of this sector around which the Alliance will focus.

Information Technology

Hampton Roads’ ability to attract and grow Information Technology jobs include the region’s established IT cluster, cost effective operating environment, strong military assets, workforce, and educational assets. Within the technology cluster, the region is particularly poised to attract companies with a focus on coastal resiliency, maritime data analytics, and unmanned systems.

Advanced Manufacturing

Hampton Roads’ ability to attract and grow jobs in advanced manufacturing and in the transport technologies sector includes the strong presence of maritime activities and transfer of skills to related sub-sectors such as automotive, aerospace, and remanufacturing. Links to the Navy, a relevant pool of experienced skills, and large student base, provide supply chain linkages and the ability to leverage knowledge/research capabilities.

Distribution & Logistics

The Port of Virginia is a major competitive advantage for Hampton Roads in the Distribution & Logistics sector. Other regional strengths include its mid-Atlantic location with good market access, reasonably well-established cluster presence and relevant talent pool. In addition to warehousing, the Hampton Roads region should also pursue logistics centers of excellence to complement the existing cluster.

Food & Beverage Processing

Strengths that drive Hampton Roads’ competitive advantage in the Food & Beverage Processing sector include its mid-Atlantic location, access to raw materials, and a reasonably well-established cluster base with access to talent. Also, the region features reasonable operating costs as it relates to labor, real estate and utilities.

Offshore Wind

More than a dozen offshore wind projects are in advanced stages of planning on the East Coast of the United States. The federal government has set a national goal to produce 30,000 megawatts of energy by 2030. With the development of Dominion Energy’s Coastal Virginia Offshore Wind project and Avangrid Renewables’ Kitty Hawk Offshore Wind project, Hampton Roads is now on a trajectory to lead offshore wind development in the U.S.

5-YEAR IMPACT

1,400

1,200

1,000

800

600

1,084 1,309 1,353 1,398 1,446 1,494 400 413 427 441 455 759 909 940 972 1,005 1,039

Attraction 325

1,600 2020-2022 2023 2024 2025 2026 2027 2028

Every direct new job created through the Alliance’s New Business Investment efforts is estimated to create additional indirect jobs in the region. In addition, the Alliance’s targeted creation of 7,000 direct new jobs is expected to create an additional 8,071 new secondary (indirect) jobs for an estimated total of 15,071 total new jobs.

DIRECT JOBS

8,071 $606M 200

7,000 $712M -

DIRECT EARNINGS at $48.93/hr

15,071 $1.32B 400

+ +

INDIRECT JOBS INDIRECT EARNINGS at $36.07/hr

= =

TOTAL JOBS

The Alliance’s targeted creation of 7,000 direct new jobs with an average wage of $48.93/hr is expected to create direct earnings of $712M. These new primary jobs are expected to create an additional 8,071 new secondary (indirect) jobs with an average wage of $36.07/hr and earnings of $605M. Once all jobs are realized, the new area earnings are estimated at $1.32 billion annually.

Expansion 11

TOTAL EARNINGS

ALLIES

$18.5 MILLION

Public and Private Sector Support

Funding

Private Sector Campaign Goal over the Next Five Years

>>

BUDGET ALLOCATION

Through the enhanced program, a sustainable pipeline of resources will be supported 1/3 by government and 2/3 by business. The revenue from private- and public-sector funding will be utilized for growth initiatives as follows:

Recruitment $1,100,000 Engaged Next Generation Marketing $3,885,000 Targeted Business Development $4,820,000 Energy Enhancement $2,405,000 Real Estate Solutions $3,330,000 Integrated Regional Intelligence $1,110,000 Alliance Administration $1,850,000 TOTAL $18,500,000

CAMPAIGN CABINET

Mr. Keith VanderVennet, Co-chair Senior Vice President - East Region Ferguson Enterprises

Mr. J.D. Myers, II, Co-chair Senior Vice President and Eastern Region Manager Cox Communications

Ms. Arketa Howard Director of Business and Policy Affairs in Offshore Wind Crowley

Ms. Diane Leopold Chief Operating Officer Dominion Energy

Mr. Eric Keplinger Vice President, Business Development MEB General Contractors

Ms. Cathie Vick

Chief Development & Government Affairs Officer Port of Virginia

Ms. Buffy Barefoot Virginia Beach President TowneBank

Mr. Tim Faulkner President & CEO The Breeden Company

Mr. Skip Smith

Senior Vice President, Real Estate Development

W.M. Jordan

Mr. Andy Hodge

Regional President & Head of Corporate Banking Atlantic Union Bank

Mr. Taylor Adams

Deputy City Manager & Director of Economic Development

City of Virginia Beach

The Alliance Board of Directors is comprised of mayors/county chairs, private CEOs/executives, and ex-officio directors that meets regularly to provide strategic direction and guidance to the organization. Similarly, the Alliance’s Regional Economic Development (RED) Team is comprised of one representative from each member locality, several regional partners and the region’s utility companies. The RED Team meets on a bi-monthly basis to review the Alliance’s activities, learn from industry experts, and work collaboratively to solve regional issues. The Alliance extends its sincerest gratitude to the following individuals for their service to the organization and the Hampton Roads region-at-large.

2023 BOARD OF DIRECTORS

Honorable Richard W. West City of Chesapeake

Honorable Donnie R. Tuck City of Hampton

Honorable Philip Jones City of Newport News

Honorable Kenneth C. Alexander, Ph.D. City of Norfolk

Mr. Keith VanderVennet, Chair Ferguson Enterprises

Ms. Diane Leopold, Treasurer Dominion Energy

Mr. Darrell Williams Hampton University / U.S. Army (Retired)

Ms. Mary Bunting, CAO Chair City of Hampton

Mr. Douglas L. Smith, Secretary Hampton Roads Alliance Non-Voting

Mr. Shawn Avery Hampton Roads Workforce Council

Mr. Bill Ermatinger, Past Chair Huntington Ingalls Industries (Retired)

Honorable Robert M. Dyer City of Virginia Beach

Honorable Douglas G. Pons At Large Public Sector Representative City of Williamsburg

Honorable Richard L. Grice At Large Public Sector Representative County of Isle of Wight

Mr. Aubrey Layne

Sentara Healthcare

Ms. Buffy Barefoot TowneBank, Virginia Beach

Mr. Robert Duvall Virginia Natural Gas

Ms. Florence Kingston, RED Team Chair City of Newport News

Ms. Nancy Grden

Reinvent Hampton Roads

Mr. Hugh L. Patterson, General Counsel Willcox Savage

2023 RED TEAM

Mr. Max Bartholomew Dominion Energy

Mr. Rick Dwyer

Hampton Roads Military & Federal Facilities Alliance

Mr. Bob Crum

Hampton Roads Planning District Commission

Mr. Shawn Avery

Hampton Roads Workforce Council

LOCALITIES UTILITIES & REGIONAL PARTNERS

Mr. Russell Young Port of Virginia

Ms. Nancy Grden

Reinvent Hampton Roads

Mr. George Faatz

Virginia Natural Gas

Mr. Steven Wright

Chesapeake Economic Development

Mr. Karl Heck

Franklin Southampton Economic Development

Mr. Chuck Rigney

Hampton Economic Development

Mr. Chris Morello

Isle of Wight County Economic Development

Mr. Chris Johnson

James City County Economic Development

Ms. Florence Kingston

Newport News Department of Development

Mr. Sean Washington

Norfolk Department of Economic Development

Ms. Charity Gavaza

Poquoson Department of Economic Development

Mr. Brian Donahue

Portsmouth Department of Economic Development

Mr. Nic Langford

Suffolk Economic Development

Mr. Taylor Adams

Virginia Beach Economic Development

Ms. Yuri Adams

Williamsburg Economic Development

Ms. Kristi Olsen-Hayes

York County Economic Development

Make no mistake, Hampton Roads is in a competition for jobs, talent, and investment which impact our quality of life. All the regions we have studied and visited are fiercely competitive when it comes to economic development. We need to do the same.

Douglas L. Smith President & CEO

With your help, we can come together like never before to build a more resilient economic future for the Hampton Roads region. We have the momentum to achieve more for Hampton Roads, and we hope you will join this effort.

Mobile: (757) 319 - 1015

dougsmith@hamptonroadsalliance.com

Carlotta Ungaro

Campaign Director, Allies in Economic Development

Mobile: (678) 221-8425

cungaro@hamptonroadsalliance.com