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Richmond: Economy


Major Industries and Commercial Activity

The Richmond area has a strong and diverse manufacturing base that has helped the community remain resilient during economic recessions and even the Great Depression. Other factors that have contributed to this economic stability include the concentration of federal and state agencies, the headquarters of major corporations and bank-holding companies, numerous health facilities, and the concentration of educational institutions in the area. Services and government together account for more than half of all jobs in Richmond.

Information technology and major semiconductor manufacturing firms have been attracted to Richmond throughout the past 7 to 10 years. The increase in semiconductor firms in the area has made the city a central point of the East Coast's Silicon Dominion. Cutting edge technology makes Richmond a hub for innovation and entrepreneurship. The Virginia Bio-technology Research Park, located in the heart of the East Coast's pharmaceutical and biotechnology corridor, supports research and development in drug development, medical diagnostics, biomedical engineering, forensics and environmental analysis. Located on 20 acres next to Virginia Commonwealth University's (VCU) Medical College of Virginia, the facility is home to about 45 biotechnology, bioscience and other related companies and research institutions.

Richmond, as headquarters of the Fifth Federal Reserve District, is a financial nerve center for an industrially strong and diverse region that consists of Maryland, Virginia, West Virginia, North Carolina, South Carolina, and the District of Columbia. Banking has always been a significant employment factor in the Richmond area, and liberalization of banking laws has increased the centralization of headquarters activity in the Richmond area by many of the state's large and regionally oriented banks.

Insurance is also a strong, steady growth industry in the Richmond area. Richmond is headquarters for GE Financial Assurance (a unit of GE Capital Services), Anthem, Inc., Markel Corp., and LandAmerica Financial Group, as well as diversified financial service companies.

Philip Morris, which began in tobacco production, has been a part of Richmond's business community since 1929. Rich-mond's $200 million Philip Morris Manufacturing Center today is the largest and most modern facility of its kind in the world. Located on a 200-acre site, the 1.6-million-square-foot facility represents the largest single capital investment in Philip Morris history. Richmond has become a major East Coast distribution center and customer service center with the arrival of firms like Capital One, Hewlett Packard, Owens & Minor, Mazda, and Time-Life.

Other major companies with substantial capital investment in plants and operations in the Richmond area are DuPont, Allied Corporation, Kraft Foods, McKesson Corp., Alcoa and Smurfit-Stone Containers. Five Fortune 500 companies are headquartered in the region, including CSX, Dominion Resources, Circuit City Stores, Performance Food Group, and Pittston Company.

Items and goods produced: tobacco products, toiletries, processed foods, aluminum, chemicals, textiles, paper, printing, over-the-counter pharmaceuticals

Incentive programs—New and Existing Companies

Local programs

In addition to the state's enterprise zone incentives, Richmond contributes local tax and financing incentives in designated Enterprise Zones. At the Richmond International Airport, Foreign Trade Zone #207 allows for imported goods to be held in the zone and exempted from U.S. Customs duties until they've crossed the zone barrier into use in the United States. The Greater Richmond Partnership, Inc., provides relocation services for personnel of new companies, and financing for small businesses is available through the James River Certified Development Corporation, the Crater Development Corporation and the Micro Enterprise Program with the City of Richmond. The City of Richmond also offers infrastructure improvement incentives.

State programs

Virginia is a right-to-work state. The State General Assembly has kept Virginia's taxes on industry very competitive by maintaining relatively moderate corporate income tax rates for nearly 30 years and by eliminating many tax irritants, resulting in very modest tax bills for business and industry. While this alone constitutes an attractive incentive for new and existing businesses, the State of Virginia further offers Governor's Opportunity Funds, which allows the Governor to secure business locations or expansion projects with matching funds from the local community; Virginia Investment Partnership Grant Funds, supporting large employers with businesses established for a minimum of five years in Virginia; property tax exemptions; sales and use tax exemptions; enterprise zones; technology zones; and foreign trade zones.

Job training programs

The Virginia Workforce Development Services program, located in Richmond, is a cooperative effort of the Virginia Community College System with local businesses to cultivate a deep, skilled pool of workers who can benefit local industries and achieve their own career goals. Two community colleges, J. Sargeant Reynolds Community College and John Tyler Community College, have joined forces to create the Community College Workforce Alliance. The CCWA supports economic development and provides workforce development in both the private and public sectors. Employers can potentially receive a tax credit for sending their employees through professional development with CCWA. The Virginia Employment Commission offers job resources and assistance to workers and serves employers through applicant screening, labor market information reports, and unemployment insurance administration. The Capital Area Training Consortium, with an office in Richmond, is an official Employment and Training Agency providing career assessment, counseling, training, re-training and job search assistance. Community members with disabilities can access job training and support services via the Department of Rehabilitative Services, while older job seekers may find assistance through the Capital Area Agency on Aging.

Development Projects

After Tropical Depression Gaston flooded the Shockoe Bottom District along the James River in 2004, local business owners and the City of Richmond were able to access Federal Emergency Management Agency support to bolster ongoing efforts to rebuild, renovate, and ultimately revitalize that historic area. Several loft and apartment residence projects have been recently completed or are underway, and the 40,000 square foot former site of Lady Byrd Hat Company is being developed into a multi-tenant site that will potentially incorporate entertainment, restaurant, and retail areas. In 2005 the Tredegar National Civil War Center will complete phase one of a museum that will eventually provide a holistic look at the Civil War from Union, Confederate and African American perspectives. Riverside on the James, a mixed-use development project along the Canal Walk, is expected to reach completion in 2005 and will add more than 275,000 square feet of retail, office and apartment space to the area. Dominion Virginia Power will add 1,200 jobs to the River District as it expands its headquarters.

In 2005, the Richmond Braves Triple-A baseball team pitched a concept for a $330 million ballpark to be built in the Shockoe Bottom District. The project was still in public hearing stages in the early part of the year, but the community reportedly supports the addition of an event-driven venue in an area that is increasingly busy and alive.

The Richmond Office of Economic Development reports that Richmond is in the middle of a scientific renaissance, in large part because of Richmond's Virginia Biotechnology Research Park and the Medical College of Virginia. Development at the Virginia Biotechnology Research Park began in 1997 and is only one-third completed at present; even so, it houses more than 45 biosciences entities, research institutes affiliated with Virginia Commonwealth University, and state and national medical laboratories. The Park isn't confined to the 34 acre downtown campus, having branches and partnerships in Henrico and Chesterfield counties.

An expansion of the Greater Richmond Convention Center was completed in 2003, bringing the facility up to 700,000 total square feet of space—180,000 square feet of exhibit space, 32 meeting rooms totaling 50,000 square feet, and a 30,550 square foot Grand Ballroom.

The Richmond Coliseum received a seven million dollar facelift. With new seats, lights, paint schemes, elevators, a kitchen, and floors in addition to renovated restrooms and an onsite professional chef, the updated building is more inviting and will ideally draw more ticket purchasers to big name musical concerts.

Economic Development Information: Greater Richmond Partnership, 901 East Byrd Street, Suite 801, Richmond, VA 23219-4070; telephone (804)643-3227; toll-free (800)229-6332. City of Richmond Office of Economic Development, 501 E. Franklin St., Suite 800, Richmond, VA 23219; telephone (804)646-5633; fax (804)646-6793; email econdev@ci.richmond.va.us

Commercial Shipping

Richmond has its own port, owned by the municipal government and offering direct container ship service to Europe, Mexico, the Mediterranean, the Caribbean, and South America. The Port of Richmond is located four miles south of Richmond's Central Business District and offers services such as stevedoring, supply chain services, export packaging and transfer, and warehouse and inland distribution services. The port is equipped for heavy lifting and can handle a range of cargo, from livestock to breakbulk.

Seven air cargo and cargo charter flights can be accessed at the Richmond International Airport, which is located 10 minutes from the downtown area. The airport is a Foreign Trade Zone with U.S. Customs inspection on-site and can hold cargo in 142,000 square feet of warehouse space. Six major passenger carriers provide service to cities across North America, with 180 daily flights.

Richmond is criss-crossed by north-south and east-west interstates and railroads, making it an ideal United Parcel Service (UPS) district hub and FedEx regional hub. More than 100 motor freight companies and brokers serve the area and can handle loads including heavy hauling, liquid bulk, dry bulk and oversize loads. The Richmond area is within a day's drive of 50 percent of the U.S. population, 55 percent of the nation's manufacturing facilities, and 60 percent of the country's corporate headquarters. A 750-mile radius encompasses almost three-fifths of the population and two-thirds of the nation's manufacturing facilities.

Two rail lines converge in Richmond: the Norfolk Southern and CSX, which is the nation's largest railroad and has its corporate headquarters in Richmond. CSX covers 23,000 miles across 23 states and extends its reach to Canada, Mexico, Europe, Asia, Latin America, Australia, Hong Kong, China and Russia. CSX provides service to and from the Port of Richmond along with international terminal services, domestic container shipping, domestic ocean-liner services, and more.

Labor Force and Employment Outlook

Trends over the past ten years indicate that the number of manufacturing and federal government jobs is on the decline, while employment opportunities in services and finance (banking, insurance, real estate) have demonstrated a spike. The Richmond area has a higher percentage of white-collar professional, technical, sales and clerical workers than both the South Atlantic region and the United States as a whole. Blue-collar and service-worker totals are close to the national average. The percentage of women in the work force is higher in the Richmond region than in the United States as a whole.

Generally speaking, a positive labor-management relationship enhances the Richmond work ethic. As the northernmost right-to-work state, less than 10 percent of the work force is organized, and approximately 30 percent of workers in union shops choose not to join. Strikes are rare, and Richmond enjoys one of the lowest work-stoppage records in the nation.

The following is a summary of data regarding the Richmond-Petersburg metropolitan area labor force as of 2003.

Size of nonagricultural labor force: 564,100

Number of workers employed in . . .

construction and mining: 38,500

manufacturing: 45,300

trade, transportation and public utilities: 107,400

information: 11,600

financial activities: 45,900

professional and business services: 82,700

educational and health services: 58,500

leisure and hospitality: 44,500

other services: 24,500

government: 105,100

Average hourly earnings of production workers employed in manufacturing: $16.39

Unemployment rate: 3.6% (December 2004)

Richmond: Economy

Largest private employers Number of employees
Capital One Financial Corp. 9,018
Philip Morris 6,462
HCA Inc 6,454
Virginia Commonwealth University Health 6,216
Wal-Mart Stores, Inc. 5,449
Wachovia Corp. 4,521
Bon Secours Richmond Health 4,044

Cost of Living

The following is a summary of data regarding key cost of living factors for the Richmond area.

2004 (3rd Quarter) ACCRA Average House Price:$263,334

2004 (3rd Quarter) ACCRA Cost of Living Index: 101.5 (U.S. average = 100.0)

State income tax rate: Ranges from 2.0% to 5.75%

State sales tax rate: 4% (2.5% on food after 4/1/01)

Local income tax rate: none

Local sales tax rate: 1.0%

Property tax rate: $3.70 per $100 assessed value

Economic Information: Greater Richmond Chamber of Commerce, 201 E. Franklin St., Richmond, VA 23219; telephone (804)648-1234


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