Virginia Beach: Economy
Major Industries and Commercial Activity
Virginia Beach has a diverse economy based on private enterprise, thriving tourism, and a strong military presence. In addition, many international corporations have established headquarters in the region. The growth in population (from 84,215 people in 1960 to an estimated 439,467 in 2003) has resulted in flourishing retail sales and has also provided a large labor pool and support services. Open land for industrial development and high-quality office space continue to attract new industry.
Agribusiness contributes substantially to the local economy. There are around 150 farms in the city. In 2002 the economic impact of the agricultural community was estimated at more than $59 million. Principal products included swine, soybeans, corn, horticultural specialties, wheat, vegetables, horse breeding, and dairy products.
Four military bases in Virginia Beach have a tremendous economic impact on the region, with the Department of Defense spending $11 billion in 2002, and increasing in following years due to the War with Iraq. The bases include Oceana Naval Air Station, the largest master jet base in the United States, employing 12,000; Little Creek Naval Amphibious Base, which employs 13,000; Fort Story, which conducts amphibious training operations and employs approximately 1,200 military and civilian personnel; and Dam Neck, a training base for combat direction and control systems, which employs 4,700 persons. Businesses serving soldiers, sailors, and their families employ even more area residents. Military Exchanges and PX's accounted for $123.8 million in sales in 2002.
In 2002 over 3 million sun-loving visitors spent more than $700 million during their stays at the resort city for accommodations, meals, entertainment, and other services, resulting in about 11,000 new service jobs. The city received $29 million in net direct revenue from tourist activity.
About one-third of Virginia Beach's labor force is employed in retail and wholesale business. The city had more than 7,800 retail/wholesale businesses with total taxable sales of over $3.9 billion in 2002, an increase of 4.3 percent from the previous year. Distribution greatly benefits from the fact that Virginia Beach is within 750 miles of three-fourths of the country's industrial activity and two-thirds of its population. An integrated system of highway, air, rail, and sea services provides easy access to national and international markets.
Items and goods produced: power tools, furniture, coated abrasives, welding equipment, recreational products, machinery, agricultural products
Incentive Programs—New and Existing Companies
Virginia Beach offers several incentives to reduce the costs of relocating and expanding a facility within the city. The Virginia Beach Department of Economic Development (DED) prepares customized in-depth research packages for prospects, conducts tours of facilities, helps new industry begin operations and aids existing businesses in their growth, advises on the availability of Industrial Development Bonds and conventional funding, and assists in the development of office parks. DED also helps to expedite the permit process for developments under construction, and provides engineering and landscape assistance at no charge. The Department of Economic Development assists firms in identifying and securing conventional financing. The Virginia Beach Development Authority issues tax-exempt industrial development bonds covering the cost of land, buildings, machinery, and equipment to eligible manufacturing facilities. For non-manufacturers, the Virginia Business Financing Authority provides long-term fixed asset financing at rates below those of conventional sources for financing land, buildings and capital equipment. In order to attract new businesses, Virginia Beach has initiated an innovative program aimed at offering cost-saving benefits to employees of new and relocating businesses and industries. The program includes incentives, special offers, and discounts from Virginia Beach businesses including retail merchants, hotels/motels and apartment complexes, utility companies, mortgage companies, and real estate firms.
Virginia is a right-to-work state. The State General Assembly has kept Virginia's taxes on industry very competitive by enacting one of the best corporate income tax laws in the nation and by eliminating many tax irritants, resulting in very modest tax bills for business and industry. Consequently, property tax exemption or investment tax credits are not used to lure new companies into the state.
Job training programs
The Workforce Services Program of the Virginia Department of Economic Development prepares and coordinates business training programs tailored to meet the specific needs of new or expanding companies seeking to increase employment. Services provided at no cost to employers include recruiting prospective employees, analyzing job training requirements, developing and implementing employment programs, arranging for training facilities, and preparing instructional audiovisual materials. The Virginia Employment Commission will, at no cost, interview, pre-test, pre-screen, and refer selected applicants to an employer. The city of Virginia Beach has funds available through the federal Title II Job Training Partnership Act (JTPA) program to recruit prospective workers, and provide wage subsidies and customer training programs. The Southeastern Virginia Job Training Administration administers these funds.
The Town Center of Virginia Beach is a massive, $350 million mixed-use development encompassing 17 blocks in the downtown area. It will consist of office towers, retail space, luxury residential buildings, hotels, restaurants, and a performing arts center, connected by pedestrian-friendly brick sidewalks, fountains, gardens and green areas. Parts of Phase I and II will open in 2005, and more phases are to be completed over the next few years. The Performing Arts Theater at Town Center, a 1,200 seat facility, will be completed in 2007.
Hotel building and expansions have been brisk in Virginia Beach to keep pace with increasing numbers of tourists. New projects being constructed in 2005 include a $62 million Hilton Resort and Conference Center to be built near the new Virginia Beach Convention Center, and a $40 million Embassy Suites being built near the Hampton Roads convention center.
Economic Development Information: Department of Economic Development, City of Virginia Beach, One Columbus Center, Suite 300, Virginia Beach, VA 23462; telephone (757)437-6434; (800)989-4567; fax (757)499-9894; email email@example.com
Norfolk International Airport is located less than a mile from the Virginia Beach city limits. In addition to the nine commercial carriers that serve the area, cargo airlines and air freight forwarders have offices in the airport complex. Also serving the Hampton Roads area is the Newport News/Williamsburg International Airport, less than an hour away. The nearby Norfolk International and Portsmouth Marine Terminals, part of the Port of Virginia system, handled 15 million tons of cargo in 2004 and has a channel depth to 50 feet. With the addition of 4 Suez class container cranes in 2004, Norfolk International has doubled its cargo handling capacity. There are 135 motor carriers and 50 common carrier terminals in the Virginia Beach region. Federal Express, UPS, Puralator Courier, Emery Worldwide, U.S. Mail Express, and a number of smaller couriers serve the area. Railroads serving Virginia Beach are Norfolk Southern Railway and Eastern Shore Railroad, with a connection to CSX Transportation.
Economic Development Information: Virginia Beach Department of Economic Development, One Columbus Center, Suite 300, Virginia Beach, VA 23462; telephone (757)437-6434; (800)989-4567; fax (757)499-9894; email firstname.lastname@example.org
Labor Force and Employment Outlook
In terms of major occupations, the Hampton Roads area population, including that of Virginia Beach, exhibits a balanced proportion of managerial, professional, technical, and support personnel in a variety of businesses and industries. Of the more than 7,500 annual high school graduates, nearly 70 percent attend either a two- or four-year college or university, while 15 percent continue their education at vocational or trade schools, or through an apprenticeship program.
The following is a summary of data regarding the Norfolk/Virginia Beach/Newport News metropolitan area labor force, 2003 annual averages.
Size of nonagricultural labor force: 730,800
Number of workers employed in . . .
construction and mining: 44,700
trade, transportation and utilities: 134,900
financial activities: 38,000
professional and business services: 98,800
educational and health services: 78,100
leisure and hospitality: 77,300
other services: 33,500
Average hourly earnings of production workers employed in manufacturing: $18.27 (2003)
Unemployment rate: 4.0% (December 2004)
Cost of Living
The cost of living in the Virginia Beach area, including consumer goods and services, is slightly above the national average.
The following is a summary of data regarding several key cost of living factors for the Virginia Beach area.
2004 (3rd Quarter) ACCRA Average House Price: $288,851
2004 (3rd Quarter) ACCRA Cost of Living Index: 102.1 (U.S. average = 100.0)
State income tax rate: Ranges from 2.0% to 5.75%
State sales tax rate: 4%
Local income tax rate: None
Local sales tax rate: 1%
Property tax rate: $1.22 per $100 of assessed valuation (2002); assessment ratio = 100% for residential
Economic Information: Department of Economic Development, One Columbus Center, Suite 300, Virginia Beach, VA 23462; telephone (757)437-6434; toll-free (800)989-4567; fax (757)499-9894; email email@example.com
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