Corporate projects lead construction boom

by Lisa Antonelli Bacon
for Virginia Business
October 2005

Corporate expansions are boosting Virginia's construction industry. From a huge marine terminal in Portsmouth to a new beer brewery in Elkton, the investments are keeping builders busy. Statewide, officials expect growth of 3.5 percent in commercial construction this year while construction employment of nearly a quarter of a million Virginians is at an all-time high.

Besides new additions to plants and facilities, a renewed interested in downtowns has sparked big projects. Throw in continued work on major highways and tourism-related ventures such as the new Virginia Beach Convention Center (with many tourism projects rushing to finish before the 2007 celebration of the 400th anniversary of Jamestown), and it's easy to see why the industry is booming. Balancing the bluster of the boom, though, are rising prices for construction materials. Prices are expected to tick up even more with demand for many materials sky high as a result of the damage from Hurricane Katrina.

Despite these challenges, new buildings are taking shape across the commonwealth. APM Terminals is spending $450 million on the country's first private container terminal along the banks of the Elizabeth River, a coup for Hampton Roads, because the additional berth space is expected to draw more port business. "We are on schedule for opening the terminal in fall 2007," says Griffith Lynch, general manager of APM Terminals North America in Norfolk, a unit of Denmark-based Maersk Inc. "The new facility will feature more than 4,000 feet of berth space … and many state-of-the-art options that will make us the most efficient terminal in Hampton Roads."

Large, multiuse communities account for a chunk of the construction under way. The increased popularity of New Urbanism — livable, sustainable communities where residents can live work and play — is feeding new projects in downtown Richmond and in Hampton Roads. Heralded by some as the most important planning movement of this century, New Urbanism is retooling neighborhoods into small cities, offering basic necessities and residential, retail, office and entertainment venues in a village setting. For example, Rocketts Landing in Richmond, a $250 million development along the James River, drew hundreds of calls before the sales office officially opened its doors on Labor Day. The multiuse village will have 45 acres of office, residential and retail space.

In Newport News, the Power Plant, another mixed-use development, got off to a slow start. However, it's wrapping up construction and occupancy is reaching capacity. Developer David Cordish says that there are still a couple of "blockbuster additions" in the works for the $129 million retail/entertainment complex. Other long-term projects — such as the 10-year, $256 million rebuilding of the Pentagon — continue. And already on the drawing board for next year is a $140 million project for Wythe County. PepsiCo Inc. will build a new manufacturing and distribution facility in the county's Progress Park.