Economic development — the efforts by governments to attract new business — is typically the purview of one locality at a time.
Businesses, after all, pay taxes and create economic activity wherever they’re located.
And for the last several decades, Hampton Roads’ cities and counties have competed with each other for development rather than cooperate.
A new project is called the Eastern Virginia Regional Industrial Facility Authority, or EVRIFA, is one way to move away from competition and closer to cooperation in Hampton Roads. The group wants to spread the cost and benefits of economic development among many localities rather than leaving it all to one.
Formed in 2019 by several Peninsula localities, administration of the organization was taken over by the Hampton Roads Alliance in 2022. It’s now got its first project in the works in York County.
WHRO spoke with EVRIFA Director Jim Noel to learn how the structure works and the group’s first project.
This conversation has been edited for length and clarity.
WHRO: Can you just describe what a RIFA is and it's meant to do?
Jim Noel: A RIFA is effectively a regional economic development authority. (Economic development authorities) are entities that are appointed by the elected body of localities in Virginia to promulgate economic development. And they can buy land, sell land, lease land, give incentives.
They can do all sorts of development and not just industrial. They used to be called industrial development authorities, and they changed the economic development authorities because now it spans the whole spectrum of different types of commerce — they can be supporting an entertainment district where it could be supporting an industrial park, or it could be an individual business that they're trying to attract to their community.
The state code gives powers to economic development authorities, and refers to do these very things to try to facilitate economic development of all types.
WHRO: Every city and county has its own economic development authority. What makes a regionalized version of this different and why is it necessary?
JN: The key to this … is the RIFA allows localities to invest in a project together, and then share all of the revenue, both transactional and tax revenue.
All tax revenue: (license taxes), business, personal property, machinery and tool, whatever the particular project’s generating. Obviously, real estate (tax), they get to share that. And (a RIFA is) the only way that can really happen in Virginia.
There may be outliers, but basically, it's the only way that localities can share revenue and share the investment. That really makes us a very unique animal.
It’s very cool because it facilitates cooperation between the localities and each locality has different attributes and different weaknesses. Some, from an economic development lens, have a lot of land, for example. Some localities have no land, but they have perhaps financial resources that they could use to invest in a project. So this is the best of all worlds. It allows localities to marry and to promulgate something that they may not have been able to do individually.
In a more rifle shot example, and one that's been a weakness for (both) Virginia and Hampton Roads, is the lack of large sites, mega sites — 100 acres, 500 acres, 1000 acres. This type of structure ultimately could perhaps allow a locality that has a 1,000-acre site to get other investors to bring the infrastructure to the site to make it ready for the market, which is another critical element in economic development.
WHRO: EVRIFA does have one project in the works. How is the Kings Creek project in York County going?
JN: Like a lot of things in economic development, it’s been kind of a slow roll. Economic development is a marathon, not a sprint, so it's taken several years.
But six of the communities in the RIFA invested in this project, which was a 432-acre surplus piece of property owned by the Commonwealth. It was actually at one point owned by the Navy, it was a fuel depot. So it had a brownfield issue that was remediated with an EPA brownfield grant many years ago. It’s been cleaned up.
It's a very unique story. In order to acquire it from the state, the sale price was $1,350,000. We leased 250 acres of it to a solar company for a 20-megawatt facility (to cover the purchase). They ultimately sold that to Dominion and Dominion hopes to break ground in the first quarter of next year on that facility. But we did a 37-year ground lease and took all the money up front.
We then did a simultaneous closing, took that money, and bought the property. And then we had the remaining acreage for a light industrial park. We got a Go Virginia grant to help with some of the work we needed to do to prepare that property for market.
And I'm really pleased to say, it's taken a few years but we now have 31 acres under contract for (a) Class A warehouse project and we hope to close on that in the next few months.
WHRO: So it's in York County, but places like Newport News and Hampton are effectively acting as investors — in the same way that if I had a restaurant and I needed investors to get it off the ground?
JN: That's a good analogy. That's the other really cool thing about the RIFA. All the members don't have to participate in any project, it only takes two that want to participate in a given project.
Of our membership, six decided to invest in this project. The others are still members of the RIFA, nothing changes. It's just they're not participating in this particular project.
And so you're correct. We got together those six localities, decided how much each one wanted to invest in this project. And then that's a direct pro-rata return for what they invested: if you invested 20%, you get 20% of the returns.
Five of the Peninsula localities … and Isle of Wight on the southside invested in this particular project. That is really, as I said, one of the real strengths of the RIFA construct is that you don't have to participate in a project if it doesn't fit for your locality, but you're still a member of that group. We're looking real actively right now for a second project.
The other goal is to try to get all the communities in Hampton Roads as members of the RIFA. Right now, all of the Peninsula localities are members, (as well as Gloucester, Chesapeake, Franklin and Isle of Wight). Virginia Beach is our most recent community to join. Norfolk is currently considering it, and then we want to try to get Portsmouth and Suffolk and Southampton (County) on board.
And we're open to others. Interest has been expressed by Surry County and who knows, New Kent possibly as well.
WHRO: In the case of the Kings Creek project, Hampton or Newport News are pretty built-out cities. They don't have big, open land areas to attract large industrial scale or other development like that, so their part in this seems more obvious. They're investors, they put some money in, they get some money out for a project they may not be competitive for themselves.
What about the flip side? What is the draw to this sort of project and structure for somewhere like York County? Is it that they wouldn't have been able to make the financial lift on the front end on their own?
JN: Yes, partially. They may have been able to do that. But candidly, this property was owned by the state … and it was more appealing to them to sell it to a regional group with multiple localities than to sell it to one community. They get (a) bigger bang for their buck.
And I’ve got to give York county a lot of credit — and to be very candid, I was the development director there for a long time. When this occurred, I was there. But I thought it was important to get a regional project, get a project for the RIFA underway to show that this thing will work. A lot of people are skeptical until they see something that's actually been accomplished.
York County didn't have to invest all the money in this to get it ready for market, we were able to spread it. And I think that also helped us get a Go Virginia grant. It was a more appealing application to Go Virginia, which is a very regional economic development focused entity.
WHRO: You've been going around to different cities making the case to join EVRIFA. I saw your presentation at Norfolk, you just said Virginia Beach has joined. What is the pitch to somewhere like Virginia Beach, which has both the financial strength to do these projects and has some of the land it needs?
JN: Number one: regionalism, I think, is critical to success and economic development. Businesses, the political boundaries aren't important to them. They just want a site that works, that has good access to labor, to transportation, to whatever it may be. And so when they see localities working together, it makes that individual locality more appealing because they're operating in a regional frame. And I think that's important.
And we've had some studies that the Hampton Roads Alliance had done that really shows that it’s impactful when a site selector or an individual company is looking at a project and they see the region's pulling together and not fighting each other. That is a big plus in their determination of whether to locate there or not.
