Innovate. Prosper. Grow. - Hanover County Virginia · 2016. 5. 11. · Prosper. Grow. 9 Objective...

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FY

20

15

Innovate. Prosper. Grow.

Annual ReportFY 2015

Hanover County Economic Development Innovate. Prosper. Grow. 2

Objectiv

eKe

y Indicator

Data So

urce/D

ata

Owne

rCu

rren

t Mea

suremen

tHan

over Targe

tGreen

Yello

wRe

d

1.0

Encourage private land

owne

rs

to re

ady commercial sites for

sale and

lease

Acres a

t stage 3 of readine

ss

for com

mercial investmen

tEcon

omic Develop

men

t De

partmen

t38

1.1 Acres

Maintain 45

0 acres o

f stage 3 ready commercial

prop

erty inventory

450 acres o

r more

of stage 3 ready

commercial

prop

erty inventory

Betw

een 40

0 and

450 acres o

f stage 3

ready commercial

prop

erty inventory

400 acres o

r less o

f tie

r 3 re

ady

commercial

prop

erty inventory

2.0

Real prope

rty tax base

deriv

ed from

com

mercial

sources

Assessor's Office

2014

new

com

mercial

assessed

value

$4

9,14

2,35

7 ( add

ed in

annu

al year)‐ total

assessmen

ts of

$8,921

,185

,600

of

resid

entia

l prope

rty and

$2,520

,214

,900

of

commercial prope

rty

$50M

of n

ew com

mercial

investmen

ts based

on

assessed

value

Commercial

prop

erty

investmen

ts in

excess of $

50M

based on

assessed

value

Commercial

prop

erty

investmen

ts of

$40M

‐ $5

0M

dollars based

on

assessed

value

Commercial

prop

erty

investmen

ts of

$39.99

9M dollars

or less based

on

assessed

value

2.1

Ratio

of com

mercial to

resid

entia

l prope

rty

assessmen

tsAssessor's Office

71% re

siden

tial

20% com

mercial

2015

data

(apartmen

ts are includ

ed

in re

siden

tial totals)

Increm

ental goal of

attaining a minim

um

prop

erty base ratio

of

25% com

mercial to

75%

resid

entia

l by 20

17 w

ith a

long

term

goal of 3

0%

25% of the

total

coun

ty prope

rty

assessmen

ts are

deriv

ed from

commercial

prop

erty and

75%

is

resid

entia

l

Betw

een 20

% and

25

% of the

total

coun

ty prope

rty

assessmen

ts are

deriv

ed from

commercial

prop

erty and

be

tween 75

% and

77

.5 % is re

siden

tial

20% or less o

f the

total cou

nty

prop

erty

assessmen

ts are

deriv

ed from

commercial

prop

erty

3.0

Expand

stakeh

olde

r involvem

ent w

ith re

gards to

econ

omic develop

men

t throu

gh

engagemen

t

Implem

ent a

business

survey to

engage curren

t bu

sinesses in future

econ

omic develop

men

t

Econ

omic Develop

men

t De

partmen

tCu

rren

tly Im

plem

entin

gTo

be completed

by June

30

, 201

5Survey com

pleted

n/a

Survey not

completed

4.0

Num

ber o

f job

s sup

ported

by

Hanover Cou

nty

workforce

Virginia Employmen

t Co

mmission

48,149

Jobs

3% growth

3% or m

ore

Betw

een 1%

and

3%

1% or less

4.1

Ratio

of job

s to labo

r force

Virginia Employmen

t Co

mmission

0.8:1

(201

4 data)

0.9:1

(long

term

1:1)

0.9:1 or m

ore

Betw

een 0.8:1 and

0.9:1

Less th

an 0.8:1

4.2

Une

mploymen

t rate

Virginia Employmen

t Co

mmission

4.20

%4%

or less

4% or less

Betw

een 4%

and

5%

5% or m

ore

Goa

l: Create strategic bu

sine

ss in

vestmen

t tha

t enh

ances the

qua

lity of life in

the coun

tyEcon

omic Dev

elop

men

t Metric

s

Expand

the nu

mbe

r of job

s to

available workforce

Increase cou

nty tax base

deriv

ed from

com

mercial

sources

Page 1 of 2

10/13/20

15



Executive Summary

For Fiscal Year 2015, unemployment

decreased slightly and job growth was

mixed. Capital investment increased and

leasing and sales activity grew. Vacancy

rates decreased for industrial, flex and

retail.

Business attraction efforts with the Greater

Richmond Partnership were successful

with the addition of Mavalério, a Brazil-

based manufacturer of confections for

the baking industry. The company will

invest $5 million to add a new production

facility and U.S. headquarters in Hanover

County. The company plans to move

into a 38,000-square-foot space at the

Northlake Business Park. The investment

is expected to create 55 new jobs.

Hanover’s competitiveness for new

business prospects is severely curtailed

by a lack of available pad-ready sites and

buildings. This lack of commercial product

limits our ability to attract new investment.

Any effective economic development

strategy must include the aggressive

development of available pad-ready sites

and buildings.

Economic development in Hanover County

can be successful by recruiting higher-

wage industries, increasing densities in

the suburban service area, and proactively

converting raw land into pad-ready

commercial product.

The Hanover County Board of Supervisors

reduced the fees associated with

commercial zoning applications and site

plan review applications and to eliminate

the cost per acre calculation. There is now

a flat cost of $1,100 to rezone property for

business, office and service and industrial

use. The cost for reviewing site plans is

also now a flat cost of $1,100.

In June, the tourism microsite

VisitHanoverVA.com was launched. The

site is branded specifically to promote

tourism in Hanover County while benefiting

from the 75,000 per month visitors to its

parent site, VisitRichmondVA.com.


Hanover County Economic Development Innovate. Prosper. Grow.

Goal: Create strategic business investment that enhances the quality of life in Hanover.

ObjectivesEncourage private land owners to ready commercial sites for sale and lease ..................................Page 3

Increase county tax base derived from commercial sources .............Page 9

Expand economic development stakeholder involvement through engagement ............................Page 11

Expand the number of jobs to available workforce ..............Page 14

Increase the number of jobs that have above average wages ............Page 18

1

2

3

4

5



Objective 1: Encourage private land owners to ready commercial sites for sale and lease

Hanover competes regionally for new business investment, both from those recruited

here from out-of-town as well as from the expansion of existing businesses. In either

case, that investment must be housed somewhere so the stock and quality of available

commercial property is critical for new business investment.

Over the past number of years, Hanover’s competitiveness has been challenged by

a lack of available sites and buildings. Among the four Greater Richmond Partnership

localities, Hanover has only nine percent of the available commercial space. This

disadvantage curtails Hanover’s ability to be competitive for new investment dollars from

not only new businesses, but our existing corporate community as well. While attracting

new businesses is a viable economic development strategy, retaining and expanding

existing businesses will always be a priority. Without commercial location options that

accommodate their growth, Hanover could and does lose expanding existing local

businesses.

In 2015, Hanover County saw leasing absorption in high-bay industrial and larger blocks

of commercial / industrial space. This means that Hanover’s industrial tax base grew

and local businesses found location solutions. However, our industrial vacancy rate for

high-bay space is at an all-time low so our ability to accommodate business investment

is limited. The nation and region have not seen much activity in speculative industrial

development since the recession in 2008. It is critical that Hanover position itself as a

viable option for speculative development to stay competitive and provide locations for

both existing and new businesses.



2,077,192

1,725,714

11,766,765

5,708,842

21,278,513

2,113,472

1,754,722

12,022,114

5,878,227

21,768,535

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

Office

Flex

Industrial

Retail

Total

Change in Rentable Commercial Building Area (sf)

2015 2014

Source: CoStar, Data as of September 1, 2015

14.2%

3.9%

14.1%

3.8%0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%20.0%

2010 4Q 2011 4Q 2012 4Q 2013 4Q 2014 4Q 2015 2Q

Hanover Vacancy Rates by Property Class

Retail Office Flex Industrial




21,768,5359%

79,713,55835%75,110,730

33%

53,529,19223%

Total Rentable Building Area in GRP by Locality

Hanover Henrico Richmond Chesterfield


56,975,55125%

10,626,6975%

95,486,91541%

67,032,85229%

Total Rentable Building Area in GRP by Class

Office Flex Industrial Retail




Commercial Property – Rentable Building Area by Locality and Class

Hanover Henrico Richmond Chesterfield Total

Office 2,113,472 21,488,901 24,391,191 8,981,987 56,975,551

Flex 1,754,722 4,866,599 1,683,180 2,322,196 10,626,697

Industrial 12,022,114 27,805,656 32,728,740 22,930,405 95,486,915

Retail 5,878,227 25,552,402 16,307,619 19,294,604 67,032,852

Total 21,768,535 79,713,558 75,110,730 53,529,192 230,122,015




Candidate Tier Three SitesThe Board adopted an initiative in 2014 to develop strategies for increasing inventory

of Tier Three pad-ready commercial product sites by at least 100 acres. Two new

important zoning cases passed that recently added more than 200 acres of M2 product.

The Land Use program expansion initiative can be credited in bringing these two cases,

the Baldwin/Gilman Site and the Holland Cedar Lane, through the rezoning process.

Adopted in 2013, the new land use policy allows for land owners in the Suburban

Services Area to rezone out of land use and into certain commercial land use without

paying higher taxes normally associated with upzoning a site. The sites must meet

certain criteria as outlined in the Land Use Policy and the Economic Development

Strategic Plan.

In 2015, all fees associated with qualifying commercial rezonings and site plan were

amended to be more owner and business-friendly. These initiatives will be very

important in Hanover’s efforts to increase its inventory of development-ready sites and

buildings.



Site Name Acr

es A

vai

lab

le

Zo

nin

g

Ex

isti

ng

Acc

ess?

Lis

ted

fo

r S

ale/

Lea

se?

Ma

ster

Pla

n?

Mar

ket

ing

Mat

eria

ls?

Su

rvey

?

En

vir

on

men

tal?

Wat

er A

t S

ite?

Sew

er A

t S

ite?

Notes

Atlee Station 32 M1 Two sites of 24 and 8 acres.

Northlake 42 M2 Largest parcel is 13 ac. Potential second 13 ac parcel with I-95 frontage. Other parcels are 2-3 ac. DGIF of 10 acres now available.

Bell Creek 60 M1 Property lends itself to medical uses. Ashland Business Park 14.5 B2 Two parcels of 5.96 and 8.52 ac.

Cedar Run 25 M1 Airport / height restrictions. Access to be addressed. Parcel is pie-shaped.

Atlee Commerce Center 28.6 OS Site consists of four, 1+ ac parcels is Flex b.Quarles Road 14 M1 Rectangular site. Some wetlands

Crescent Business Center 4 M1 Site isn’t available for sale but developer can provide build to suit options.

VA Trans Park 16 M1 One parcel remaining. No marketing materials developed.

Enterchange D Pad 16 M2 Approved site plan for 315,000 sf; owner will sell site and/or build to suit.

Atlee Commons 11 M2 Two sites of 7 and 4 ac.

Holland Cedar Lane 118 M2 Route 1 frontage and infrastructure.

Subtotal 381.1

Candidate Tier Three

SuperValu 65 M2 Back parcels accessed by Erle Road. Upgraded rail crossing needed. Some wetlands in front but subdivide options are available.

Baldwin/Gilman 97 M2 Prime location on I-95 adjacent to north boundary of Northlake.

Air Park Associates 217 M2 Some wetlands, can build out more than 1M SF, some utility extensions required.

Subtotal 379

TOTAL ACREAGE: 760.1



Objective 2: Increase tax base derived from commercial sources

Significant capital investments in land development, machinery and tools, and

buildings not only bolster the tax base, but also create permanence to retaining

business operations within Hanover County. The frequency and volume of these

capital investments often reflect the psychological outlook of business owners, who are

understandably reluctant to invest should their economic prospects appear dim. FY

2015 saw increased capital investment by business owners, largely maintaining the ratio

of residential investment in recent years.

$2,349,433,400 $2,359,718,500 $2,365,408,300

$2,396,613,600

$2,442,066,000

$2,520,214,900

$2,250,000,000

$2,300,000,000

$2,350,000,000

$2,400,000,000

$2,450,000,000

$2,500,000,000

$2,550,000,000

2010 2011 2012 2013 2014 2015

Commercial Construction Assessed Values

Source: Hanover County Building Assessor's Office. Data based on calendar year.

73% 72% 71% 71% 71% 71%

18% 19%20% 20% 20% 20%

9% 9%9% 9% 9% 9%

$‐

$2,000,000,000

$4,000,000,000

$6,000,000,000

$8,000,000,000

$10,000,000,000

$12,000,000,000

$14,000,000,000

2010 2011 2012 2013 2014 2015

Assessed

Lan

d Va

lue

Assessed Land Value

Other (agricultural) Commercial Residential

Source: Hanover County Building Assessor's Office. Data based on calendar year.



$22,889,542

$32,335,596

$42,029,156 $38,069,149

$49,142,357

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2010 2011 2012 2013 2014

New Construction Commercial Permit Value

Source: Hanover County Building Inspector's Office. Data based on calendar year.

‐2.0

‐7.9

1.8 0.8

15.6

‐10.0

‐5.0

0.0

5.0

10.0

15.0

20.0

$210,000,000

$220,000,000

$230,000,000

$240,000,000

$250,000,000

$260,000,000

$270,000,000

$280,000,000

$290,000,000

2010 2011 2012 2013 2014

Percent C

hange vs Year A

go

Tax Assessment

Business Personal Property Tax Assessment

Percent Change vs. Prior Year Assessment

Source: Hanover County Commissioner of Revenue ‐ Personal Property Statistics. Data based on calendar year.



Objective 3: Expand stakeholder involvement with regards to economic development through engagement

Existing Business Assistance

Retaining and — where timely — expanding existing businesses is key to Hanover’s

economic development. Also vital is nurturing an entrepreneurial environment where

existing businesses have growth opportunities and startups can thrive. Much of the FY

2015 program year focused on raising existing business awareness of the programs

and services available through this department.

Hanover manages outreach efforts to local businesses

principally through the BusinessFirst program. This outreach

aims to provide resources and technical support to existing

businesses through the use of trained business volunteers.

This year, 103 businesses interviews were performed, 25

of which by trained business volunteers. This was a 19%

increase in the total number of interviews from the previous

year. In addition to the 103 business officials interviewed

186 total businesses were assisted. Much of this additional

reach of assistance provided was gained through the

implementation of “Business Walks.” Through these business

walks alone, an additional 72 businesses were contacted

and provided assistance, this is above and beyond the 103

businesses that were interviewed. The Business First program focus has be altered

to place a high emphasis on volunteer participation in business walks where there is

a condensed participation window for volunteers with maximum business community

impact.

103 Interviews

186 Businesses Assisted



The overall feedback from interviews was positive with most businesses beginning

to see sales increase and approach pre-recession levels. Most immediate concerns

are focused on federal taxation and other government regulations (federal, state and

local). Of the 103 companies interviewed, 33 of them indicated currently undergoing or

planning for some form of expansion within the year. Plans for expansion include new

investment of equipment, software, and/or building expansion along with the addition of

new jobs

Lead Generation

Business attraction is another vital component to a healthy economy. Lead generation is

paramount in achieving economic development success with new business recruitment.

The volume and quality of leads translate directly into landed investments. For this

report, a qualified lead is any company receiving personal or a direct contact from

Hanover staff. The contact could be in the form of a real estate recommendation,

information on business operating costs, or a response to a proposal.

35%

27%

38%

Lead Source By Organization

Hanover County Economic Development & Other

Greater Richmond Partnership (GRP)

Virginia Economic Development Partnership (VEDP)

Source: Hanover County Economic Development



Tourism in Hanover

Tourism has a huge impact on a wide range of businesses within our community.

Millions of tourists visit each year, and a very small percentage drop by the visitor

centers in Ashland and Bass Pro Shops. Recorded visits fell by approximately 3,000 in

November 2014 most likely due to overcast and rainy weather on Train Day in Ashland.

23,385 22,390 24,580

27,37125,252

‐

5,000

10,000

15,000

20,000

25,000

30,000

2011 2012 2013 2014 2015

Annual Visits to Visitor Centers

Source: Hanover County Economic Development. Data is based on fiscal year.

$679,000 $709,000$786,000 $810,000

$900,000

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000

$1,000,000

2011 2012 2013 2014 2015

Lodging Tax Revenue

Source: Richmond Region Tourism. Data is based on fiscal year.



Objective 4: Expand the number of jobs to available workforce

Hanover can be very competitive for professional services, creative and knowledge-

based services and finance operations because Hanover does not assess a Business

Professional and Occupational License (BPOL) tax. This is unique among the GRP four

communities, with whom Hanover competes for Target Cluster investments within the

region. However, Hanover lacks the “Class A” real estate product that these businesses

traditionally prefer, so those investments often go elsewhere — along with their higher-

wage jobs. While Hanover’s economic base is growing steadily, Hanover is still falling

behind the region on wage growth — mainly due to the lack of real estate needed to

attract knowledge-based jobs from these Target Clusters.

Consider the current business and technology trend that enhanced power capabilities

and redundant fiber are a critical need of many of the sectors with higher-wage jobs.

Data centers, advanced manufacturing and food processing (in addition to Supply

Chain Management) represent the majority of the types of companies that are looking

to expand or locate in the GRP region. High-speed Internet is needed to recruit and

develop knowledge-based/higher-wage jobs. Without the right public infrastructure in

place, these projects often bypass Hanover for better infrastructure situations.

Workforce automation is a growing trend that can threaten communities that have larger

growth among low-skilled and low-wage jobs. Currently Hanover has an increased

concentration of lower-wage jobs as compared to our regional partners which puts

Hanover more at risk from automation. Lower-wage jobs typically equate lower-

skilled jobs, and these jobs are more prone to elimination by workplace automation

deployments. We need to be in the business of creating high-wage/high-skilled jobs that

move our community forward.

1.7% Drop in

Unemployment



Hanover has an educated and skilled workforce; however, many out-commute to jobs in

neighboring localities. Our goal is to grow high-wage jobs here creating an in-commute

of skilled workers.

Our efforts specifically target key industries poised for growth including: Professional

Services, Advanced Manufacturing, Healthcare, Supply Chain and Logistics, and

Destination Retail. Within these growth industries, we specifically work to recruit those

with higher wage jobs.

6.5

5.85.5 5.4

4.9

4.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2010 2011 2012 2013 2014 2015 (Jun)

Percent U

nemploymen

t

Num

ber o

f Une

mployed

Annual Unemployment in Hanover [Not Seasonally Adjusted]

Unemployment Unemployment Rate (%)

Data based on calendar year.Source: LAUS Unit and Bureau of Labor Statistics



‐511

389

768

1,366

1,296

3,308

‐1,000 ‐500 0 500 1,000 1,500 2,000 2,500 3,000 3,500

2010

2011

2012

2013

2014

Total Net 5 Year

Net New Jobs in All Industries

Source: VEC Labor Market Statistics, Covered Employment and Wages Program. Data based on calendar year.

Ratio of Jobs-to-Labor Force

Hanover’s workforce to labor ratio, ideally at a 1:1 ratio, is

showing an upward trend.

77%

78%

79%

80%

81%

82%

83%

84%

85%

2010 2011 2012 2013 2014

Jobs to Labor Ratio

Source: VEC. Data based on calendar year.

1 : 0.8jobs to workforce

1,296 New Jobs



Growth and Decline Industries

Within Hanover County’s targeted industries, Professional/Technical experienced

the largest increase, adding 591 new jobs over the previous year. Management of

Companies has bounced back in employment.

Three target industries — Information, Logistics, Real Estate and Manufacturing —

experienced the most losses among our target industries.

0 2,000 4,000 6,000 8,000

Finance/Insurance

Healthcare

Management of Companies

Manufacturing

Information

Professional/Technical

Real Estate

Logistics

Number of Jobs by Target Industry

2014 2013 2012 2011 2010

Source: VEC. Data based on calendar year.



Objective 5: Increase the number of jobs that have above average wages

Hanover seeks job growth; however, the long-term goal is to increase higher-wage job

growth. This is done by the recruitment of targeted industries offering higher wages.

The attainment of higher-wage jobs will increase the overall average wage. When

these gains are realized, Hanover will provide more in-county job opportunities for its

educated and skilled workforce, enjoy a more diverse and stable job base, and offer a

wide-range of employment opportunities for all qualified job-seekers.

28.3%

44.3%

18.1%

4.6% 3.1% 1.6%

21.2%

42.5%

18.7%

8.3%5.1% 4.3%

16.5%

49.2%

21.7%

6.2%3.9% 2.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Less than$25,000

$25,000 ‐$50,000

$50,000 ‐$75,000

$75,000 ‐$100,000

$100,000 ‐$125,000

Greater than$125,000

Distribution of Wages

Hanover Virginia United States

Source: JobsEQ. Data based on calendar year.



709

5,829

958

3,594

582

2,164

435

1,342

‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

$‐

$500

$1,000

$1,500

$2,000

$2,500

Avg An

nual # Jo

bs in

Hanover ‐2014

Average Weekly Wage ‐2

014

Average Weekly Wage in Target Industries

Hanover Henrico

Richmond Chesterfield

Virginia Avg Annual # of Jobs in Hanover

Source: VEC/QCEW. Data based on calendar year.

Job creation is paramount to a bright future as a community. Hanover’s wages are 15%

to 43% less than the other localities within the Greater Richmond Partnership (GRP),

and Hanover’s average wage growth has noticeably lagged compared to the region,

state, and the country. As businesses are recruited, knowledge-based jobs should be

the top priority, as they have higher wages.



$36,972$37,311

$37,890 $37,865

$39,185

$35,500

$36,000

$36,500

$37,000

$37,500

$38,000

$38,500

$39,000

$39,500

2010 2011 2012 2013 2014

Average Annual Wages for Hanover

Source: JobsEQ. Data based on calendar year. Data points reflect last quarter of each calendar year.

$40,337

$44,432

$51,310$50,111

$53,709

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

Average Annual Wage — Regional Comparison

Richmond Virginia Hanover Chesterfield Henrico

Source: JobsEQ. Data based on calendar year.

HANOVER COUNTY BOARD OF SUPERVISORS

Wayne T. Hazzard, Chairman, South Anna District Aubrey M. Stanley, Vice-Chairman, Beaverdam District

G. Ed Via, III, Ashland District | Angela Kelly-Wiecek, Chickahominy District Elton J. Wade, Sr., Cold Harbor District | Sean Davis, Henry District

W. Canova Peterson IV, Mechanicsville District

Hanover County Economic Development Innovate. Prosper. Grow.

8200 Center Path Lane Suite E Mechanicsville, VA 23116 | 804.365.6464 | HanoverVirginia.com

Innovate. Prosper. Grow. - Hanover County Virginia · 2016. 5. 11. · Prosper. Grow. 9 Objective...

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