The 2016 Richmond Power List: The Economy 

click to enlarge Rental costs are up 7 percent in the metro area. That includes lots of new options in Scott’s Addition, such as the neighborhood’s Preserve complex.

Scott Elmquist

Rental costs are up 7 percent in the metro area. That includes lots of new options in Scott’s Addition, such as the neighborhood’s Preserve complex.

Murals, rooftop bars and craft breweries aren’t the only things popping up across the Richmond area. Take the exit off the Powhite Parkway into Scott’s Addition and well, yes, you’ll find murals, rooftop bars and craft breweries there too.

But also apartments.

The exit leads you into the western edge of the transitioning, booming neighborhood. Look right, where the Coca-Cola bottling plant used to be. For more than a year now, people have been settling into rental units there and in the building next door, a connected development called the Preserve.

One of the pitches to potential renters offers a glimpse into a target demo, boasting a a 30-minute jog to the river, 1,000 steps to Lamplighter Roasting Co., a 9-minute bike ride to Ellwood Thompson’s Natural Market and, within 2 miles, four breweries.

Make that five, if you add Väsen Brewing Co., opening later this year. Actually, there are six, if you count all fermented-beverage options, because there’s Black Heath Meadery — wait, make that seven, because Blue Bee Cidery opens in the fall.

You get the drift.

People are moving into the city, and developers are working to keep up — or in some ways, lead the charge. In Scott’s Addition alone — joining the Preserve, Scott’s Edge, Courtyard Lofts and others — are two proposed six-story towers with 258 apartment units that developers say eventually will become condos.

An analysis by Zillow’s Myles Waldrop for the Power List finds 72,936 rental units in the metro area in January. Compared with a year earlier, that’s a 7-percent increase. On top of that, there are 2,347 units under construction and another 2,142 proposed.

“And they are needed,” Waldrop says.

It’s happening on both sides of the river, says Laura Lafayette, chief executive of the Richmond Association of Realtors.

The role played by renters, especially young people coming into the market, is a key indicator of a region’s economic health — especially if the price is balanced, and renters become lasting residents.

Affordable rental housing for millennials is important, Lafayette says, because it “allows them to be introduced to the region if they’re not from here, and an opportunity to stay, put down some tentative roots, see what they think about the region as a whole.”

It also allows them to save for a house, she says. And summer indicators are good going into the fall. Single-family home sales year to date are up 5.5 percent, to 9,678, she says, calling the Central Virginia market in 2016 “incredibly robust.”

City officials want people here — shopping, dining, paying taxes, getting involved and sending their children to public schools. The Holy Grail is a strong neighborhood, which is a core to better schools, thriving businesses and healthier communities. Hence the mayor’s anti-poverty initiative, the debates over school funding, the mayoral election platforms and the focus on public housing — where 10,000 residents live, according to the Richmond Redevelopment and Housing Authority.

After all, while the changes in Scott’s Addition, Manchester, Shockoe Bottom and elsewhere are breathtaking, for some people it’s hard enough finding a grocery store within walking distance. Or simply to feel safe and secure. And poverty in Richmond continues to be an Achilles heel.

In June, Voices for Virginia’s Children — in a Kids Count Data Book project with the Annie E. Casey Foundation — lamented that in 2014, nearly 39 percent of Richmond’s children lived in poverty, compared with 15 percent across the state. The figure was virtually identical to the year before.

Last week, construction began on a rapid-transit system connecting Rocketts Landing with Willow Lawn. The bus-only lanes on Broad Street for the Pulse, not without controversy, are a long-discussed first step at improving transportation and connection with jobs. The hub’s location in the East End, right along with Stone Brewing Co., may be a savior for East End neighborhoods.

click to enlarge The first kegs of Richmond-brewed beer from Stone Brewing Co. roll off the line in July. - SCOTT ELMQUIST
  • Scott Elmquist
  • The first kegs of Richmond-brewed beer from Stone Brewing Co. roll off the line in July.

Speaking of jobs, the Federal Reserve Bank of Richmond’s July Beige Book noted of the area: “Throughout the District, employers and staffing agents reported increasing demand for workers at all skill levels.”

Unemployment was down in the first two quarters of 2016 — about 3.5 percent in the Richmond area, similar to the figure statewide.

Other metro areas in the state were doing better, says Rob McClintock, vice president of research for the Virginia Economic Development Partnership. But it’s encouraging, he says: “That’s not too bad compared to what it had been. And I think we’re starting to see more people get back into the labor force.”

McClintock also observes good diversification in the region with manufacturing projects and the professional service segment, noting Elephant Insurance as a recent standout. The growing company set its headquarters in Henrico, with Gov. Terry McAuliffe announcing a $2 million expansion in 2015 — and last week came news of another expansion in Tennessee and Indiana.

A local corporate leader who’s close to city deal-making says schools continue to be a long-term challenge. He also notes continued symbols of Richmond’s corporate strength downtown — new buildings by McGuireWoods and Williams Mullen in recent years, the arrival of TowneBank, SunTrust’s new tower, Dominion’s expanding office complex — even CarMax staking a small outpost alongside the relatively barren Canal Walk.

In June, Altria touted a 10 percent equity ownership of a combined Anheuser-Busch InBev and SABMiller — a pending merger. Altria has a 27 percent stake in SAB Miller, and says it would get $3 billion in cash from the deal.

Markel Corp., whose investment arm acquired Richmond information-technology company CapTech Ventures in December, has $1.8 billion in invested assets as of June 30, and this month gave CapTech partial credit for a 20 percent increase in revenue at Markel Ventures.

Entrepreneurism, too, seems to be a favorite Richmond sport. There are investors looking for deals and lone wolves setting up shop in such co-working spaces as Gather, 804RVA and GangplankRVA.

And as Richmond BizSense noted last week, there were 10 more Richmond names on this year’s Inc. 5000, ranking the country’s fastest-growing private companies. “The 29 local companies on the list had an average growth rate of 325 percent over the three-year period between 2012 and 2015. … Those 29 companies produced a combined $694.8 million in revenue in 2015.”

The Richmond BizSense story highlighted nutrition-bar maker Health Warrior, whose growth rate in a three-year period was cited at 1,887 percent: “According to the report, Health Warrior grossed about $10 million in revenue last year.”

Yes, it’s located in Scott’s Addition.

click to enlarge Thomas F. Farrell - SCOTT ELMQUIST
  • Scott Elmquist
  • Thomas F. Farrell

1. Thomas F. Farrell
Chairman, president and chief executive, Dominion Resources

The utility seemed caught unaware by the level of confusion and outrage against its plans to seal 11 coal ash ponds at four power plants in Virginia, two in the Richmond area. It responded to some of the environmental concerns and stepped up communication efforts. Farrell marked his 20th anniversary with Dominion in 2015, continuing to blend a traditional chief executive image with civic engagement. The UCI Road World Championships in September may not have happened, at least with such a flourish, without the work of Farrell and his executives behind the scenes. CenterStage is now the Dominion Arts Center, with the company and its foundation saying they give about $20 million to philanthropic causes annually. Farrell is politically connected and is keeping Dominion securely downtown, with work underway on a new 21-story office tower.

click to enlarge Martin J. Barrington - SCOTT ELMQUIST
  • Scott Elmquist
  • Martin J. Barrington

2. Martin J. Barrington
Chairman and chief executive, Altria Group (Philip Morris USA)

One of Richmond’s most significant chief executives oversees an industry that’s declining in significance. But tobacco options aren’t going anywhere. In July, the company raised its earnings outlook and reported a profit increase of 13.5 percent from a year ago. It also stands to reap a bonanza from its stake in SABMiller. If the pending merger with Anheuser-Busch InBev goes through, it expects a 10.5-percent equity in the new company and $3 billion in cash. Barrington commands a work force of nearly 4,000 in the Richmond area, who put thousands of volunteer hours into local projects, such as the UCI Road World Championships, of which Altria was a founding sponsor. The company’s leading chunk of philanthropic dollars goes to arts and culture.

click to enlarge Michael Rao - SCOTT ELMQUIST
  • Scott Elmquist
  • Michael Rao

3. Michael Rao
President, Virginia Commonwealth University

He isn’t the charismatic, personality-driven leader trumpeting his mission throughout Richmond. But Rao’s position gives him inherent power in the form of resources. Through its employees, real estate holdings, and ever-growing student body, Virginia Commonwealth University is an economic powerhouse. Then there’s the VCU Health System, where new chief executive Marsha D. Rappley marked her one-year anniversary this month. The university’s medical arm scored a victory expanding its Children’s Hospital and quelling the local tug-of-war about whether Richmond health systems could collaborate on a free-standing, independent children’s hospital that many advocates say the region desperately needs. The arts school continues to be a national standout, and the Institute for Contemporary Art is scheduled to open next year.

4. The Markel Family and Alan I. Kirshner
Executive leadership, Markel Corp.

It isn’t enough to have power: You must use it or lose it. A prime example is Markel Corp. vice chairman Steve Markel, who goes forth into Richmond and stepped up as financial backer of a stalled grocery-store plan for an East End food desert. “I’m putting my shoulder behind it,” he told the Times-Dispatch of Jim’s Local Market — a project of former Ukrop’s and Martin’s executive, Jim Scanlon. Markel and his wife, Kathie, are wrapping up roles as co-chairmen of a five-year capital campaign for Maymont and seeing Virginia Commonwealth University ’s Institute for Contemporary Art prepare to open, a project to which they donated, along with such organizations as the American Heart Association. Markel, the specialty insurer, saw its stock price hovering around $925 last week and is in a leadership transition with co-chief executives who report to Kirshner, the chairman who served as chief executive for nearly 30 years.

click to enlarge William H. Goodwin - SCOTT ELMQUIST
  • Scott Elmquist
  • William H. Goodwin

5. William H. Goodwin Jr.
Retired chairman and president, CCA Industries

As rector of the University of Virginia’s board of visitors, Goodwin is working to answer questions about a $2.3 billion Strategic Investment Fund that recently came to light at the public university. Former university rector Helen Dragas referred to it as a “slush fund” and Gov. Terry McAuliffe said last week that he was surprised to learn about it. Goodwin says it’s an effort at stewardship and strategy. In the last year, a project for which Goodwin personally pushed, an independent, regional children’s hospital, fell by the wayside. Goodwin is powerful for his business experience, local ties, personal connections, wealth and commitment to local causes. And he and his wife, Alice, are significant philanthropists.

6. Richard Fairbank
Founder, chairman and chief executive, Capital One Financial Co.

He may not get a salary, but rest assured that Fairbank fares well — his bonuses and stock options are tied to performance. And people are swiping those credit cards — last week, a report from TransUnion said 10 million new credit-card users entered the market in the last year. How about buying cars? Capital One is seeing its auto loan business grow, Fairbank said during a July conference call, where second-quarter results showed profit up 9 percent from a year earlier. Although Capital One is based in McLean, its local presence is mammoth as the area’s largest private employer, with thousands of workers trekking to a campus that’s a world unto itself in West Creek.

7. Richard Cullen
Chairman, McGuireWoods

The legal sector is an economic pillar of Richmond, and McGuireWoods stands mighty in downtown’s newest building, the 18-story Gateway Plaza. A former attorney general for Virginia and seasoned litigator, Cullen has served as its chairman for a decade, and has been with it for much longer. McGuireWoods and its powerful consulting arm are an unparalleled combination, as one political observer says — a “gold standard” in lobbying and elsewhere. Cullen stepped in as lawyer for Mayor Dwight Jones this year when questions were raised about public resources and employees blurring the line between City Hall and Jones’ church. A Times-Dispatch story in June says a state police investigation, sought by Jones, would have findings in the fall. Cullen told Style in March, “I’m very confident that there hasn’t been a crime committed.”

8. Jim Ukrop
Investor and Businessman

The former chief of Ukrop’s Super Markets and First Market Bank has stayed active and interested in Richmond’s development and real estate, philanthropic in its causes and financially vested in local startups through New Richmond Ventures. He is motivated as a Richmond cheerleader and a sought-after source of advice for young businesspeople. He and his family have had an enormous impact on the Richmond culture, as noted in January’s Richmonder of the Year 30th anniversary edition. Citing City Hall’s financial troubles, he’s backing Jack Berry in the mayoral race.

9. Reggie Gordon
Director, Office of Community Wealth Building

It’s Richmond’s most stubborn, vexing and deep-rooted economic challenge, crossing into health, safety, housing, education, workforce development and quality of life. A quarter of Richmonders and 39 percent of children live in poverty. Is there hope? “We want doors to open and people to take chances and risks because the status quo just isn’t working,” Gordon told 8 News shortly after his tenure began in June as the city’s anti-poverty czar. With a mayor leaving office, Gordon is handed a heavy baton, a serious salary and a heady charge. The man who grew up here brings experience as chief executive of the American Red Cross Virginia Region, along with respect for his work at Homeward, the United Way and the former William Byrd Community House.

click to enlarge Rebecca Hough - SCOTT ELMQUIST
  • Scott Elmquist
  • Rebecca Hough

10. Rebecca Hough
Co-founder and chief executive, Evatran L.L.C.

Hough embodies the kind of young, entrepreneurial energy that’s part of Richmond’s personality. And she’s proving how to make an impact on the market from your backyard. A year after graduating from the University of Virginia in 2008, she served as a consultant for a year before founding Evatran with her father. The company, which makes recharging systems for electric cars, has landed big deals and partnerships. And in May the 30-year-old announced that the company was moving from Shockoe Bottom to the HandCraft building in Scott’s Addition, with hopes to expand her staff to 55 people. What’s the future of electric cars? “I’m not worried long-term about the American market,” she told Style in the spring, “but globally e-car sales grew 40 percent from 2014 to 2015.”


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