Seizing opportunities

Newport News, Virginia Beach take advantage of the expansions of local businesses

Published March 1, 2013 by Joan Tupponce

Florence Kingston, director of development for the Newport News Economic Development Authority, is looking forward to the opening of The Apprentice School this December. The 6-acre, $70 million mixed-use redevelopment project includes an 80,000-square-foot apprentice school that will train workers for Newport News Shipbuilding, which builds nuclear subs and aircraft carriers. The project also is expected to revitalize the city’s downtown area by adding approximately 197 work-force housing units and retail opportunities.  “It will bring more people living downtown and support more service and retail,” says Kingston.

The project began in 2010 when shipyard owner Huntington Ingalls Industries talked to the city about building a new school. “We started to explore the site opportunity jointly,” says Sam Workman, the authority’s assistant director of development. “We were trying to satisfy the needs of all of the entities involved.”

One of the shipyard’s goals was elevating the stature of the apprenticeship program, which started in 1919 as a trade school. The shipyard spends approximately $30 million annually in training and certifications. The school has fully accredited business and engineering degree tracks with college credits that can be transferred. 

When Huntington Ingalls told the city it was thinking of moving the school outside the gate of the shipyard, the city saw it as an opportunity to re-energize the area by bringing more housing and retail opportunities downtown. “We needed to look at this as an opportunity for mutual goals,” Kingston says.

The Economic Development Authority worked in collaboration with the city, the Industrial Development Authority, the commonwealth of Virginia, Huntington Ingalls and Armada Hoffler Development Co. to meet everyone’s goal. “It was a highly complex project,” says Workman. “Much of the complexity was designing a project that would be visually appealing but also meet the function needs of all entities.”

The deal, which included $25 million funding from the Commonwealth’s Advanced Shipbuilding Training Grant, was finalized in the latter half of 2011. The project was a lesson in collaboration and creativity. “If you are creative and attuned to thinking about how to garner benefits for multiple parties, you end up with something bigger and better that is more sustainable and impactful,” Kingston says.

The project will be transformational for the city and shipyard, Workman believes. “It’s one of the most important development projects that Newport News has undertaken in its rich history of development.”

The Virginia Beach Department of Economic Development took advantage of a similar development. In April 2011, the department official learned during a trade show in Germany that IMS Gear planned to expand its U.S. operations. “We talked with local representatives of IMS Gear, and they informed us they were doing an early analysis, looking at Gainesville, Ga., where their U.S. headquarters is located, and Virginia Beach,” says Warren Harris, director of the economic development department. 

IMS Gear Virginia Inc., which has had a 40,000-square-foot operation in Virginia Beach since 2000, is a subsidiary of German-based IMS Gear GmbH, one of the leading manufacturers of automotive gear assemblies for the North American market.

The economic development department pulled together a team with local and state representatives and narrowed possible locations for a new facility. “We needed to create a site,” says Harris, noting that the Virginia Department of Transportation stepped in with funds from its Industrial Road Access program. “They have got a grant that helps with costs from extending the road infrastructure. They awarded the funding to help defray costs.”
The department worked with the Virginia Economic Development Partnership to help close the deal. “It made good sense at the point we felt we had a good solid deal in the works,” Harris says of the state’s involvement.
As part of the deal, Gov. Bob McDonnell approved a $200,000 grant from the Governor’s Opportunity Fund to assist the city of Virginia Beach as well as a $300,000 performance-based grant from the Virginia Investment Partnership program and a $450,000 Economic Development Investment Program Grant from the city. The Virginia Department of Business Assistance also is providing funding and services to support the company’s recruitment and training activities through its Virginia Jobs Investment Program. The company will invest $35.5 million for the new 112,000-square-foot facility, which will create 80 new jobs.

Negotiations for the project flowed smoothly. “It helps having a good relationship with an existing business,” says Harris, noting that the company was familiar with the city’s proximity to the Port of Virginia and the area’s well-trained labor force. Timing was crucial, he adds. “We had to demonstrate that we could do the project in a defined time period because machinery had to be delivered that they would be using to manufacture the products.”

Construction of the project began last year in late summer. “I know that IMS Gear is very pleased with the outcome,” Harris says, adding that it wasn’t any one factor that cinched the deal. “It was all the elements that won the project for Virginia Beach.”