Due to the weather, some customers may experience late delivery of The Roanoke Times. We apologize for the delay.
The park has gained a new sense of momentum as Red Sun Farms, a producer of organic vegetables, expects to break ground this week. Red Sun is the first tenant in the park since its inception in 1997.
MATT GENTRY | The Roanoke Times
A tractor passes through a portion of New River Valley Commerce Park in Pulaski County near Dublin Wednesday. In March of this year, Red Sun Farms announced plans to open its first U.S. greenhouse on a 50-acre site in the park.
Photo courtesy of Red Sun Greenhouse Produce
Aerial shot of one of the Red Sun farms in Canada.
Courtesy of Red Sun Greenhouse Produce
New vines of tomatoes growing inside a Red Sun Farms greenhouse in Canada. The company announced in March it planned to build a 50-acre greenhouse facility in the New River Valley Commerce Park, which has been empty for more than 10 years.
Saturday, June 22, 2013
DUBLIN — The company that expects to break ground this week at the New River Valley Commerce Park is a far cry from the computer chip giants regional governments once targeted for the site.
Red Sun Farms will be growing organic vegetables out of its Pulaski County facility, not building processors for Apple’s Macintosh computers. But for the officials who have watched the park sit vacant since its inception in 1997, tomatoes are starting to sound just fine.
“There’s been 1,000 opinions on this thing. It is what it is,” said Joe Morgan, director of Virginia’s First Regional Industrial Facility Authority, which organizes the governments that own the property.
“I think on any park, what folks want and what happens is usually two different things. … The alternative would have been to do nothing. Now you have a new emerging industry that may have a big impact for the region. It’s something that’s not here and it builds on Virginia’s agriculture. But beauty is always in the eye of the beholder.”
Twelve localities, from Bland County to Roanoke, got on board with the park when they saw it as an opportunity to redefine the economic climate of the New River Valley while also welcoming the new and booming semiconductor industry.
They pooled their money in 2001 and bought rolling farmland off Virginia 100 within earshot of the New River Valley Airport near Dublin. As of today, the governments have spent a combined $12 million getting the 973-acre site ready for construction that has yet to begin. They have extended water capacity, built access roads and even designed virtual buildings.
But as fate would have it, some of the most important qualities that drew Red Sun Farms to the region after two years of careful consideration had little to do with these improvements. In fact, no amount of investment could have bought what they were looking for.
After researching the park and speaking to a few Virginia Tech experts, Red Sun decided the region sits at the right altitude, with the right climate and market conditions.
Jeff Burr, the manager of the Virginia Tech horticulture department’s greenhouses, said more light reaches the ground because the New River Valley has one of the highest elevations on the East Coast. The region also has a large deviation between night and day temperatures, which makes it ideal for vegetable growth.
The area is also suitable from an entomology standpoint, according to Thomas Kuhar, a Virginia Tech entomologist. In an email to The Roanoke Times, he listed a variety of pests that have devastated tomato crops in other parts of the country but don’t exist in the New River Valley.
Tennessee offered the company better tax incentives, but Red Sun chose Commerce Park largely because of these unique attributes, according to Aric Bopp, executive director of New River Valley Economic Development Authority, which markets the property.
“This is an entirely new industry for the region: a major industrial food production greenhouse operation,” Bopp said. “They selected us on the East Coast for a reason. … I wonder what other industries may follow that lead and say, ‘Oh that’s pretty interesting.’ With our geographic footprint, being able to serve Atlanta and New York City and everything in between in a day’s truck drive, it’s exciting to see what other food-related and elevation-sensitive projects it may get the attention of.”
By all accounts, this is just the way economic development goes. Sometimes it feels like playing the lottery ; other times all you can do is sit back and wait.
“It’s tough for communities to size the infrastructure in a way that it meets the requirements of industry. And then those requirements may change every five to seven years,” said Rob McClintock, the vice president for research at the Virginia Economic Development Partnership. “So it’s hard. It’s hard to guess, and it’s hard to guess right.”
The lean years
The story of the NRV Commerce Park is one of innovation, idealism, patience and at least some sort of a happy ending for the New River Valley. But it all begins about 200 miles away in Goochland County in 1995.
Motorola announced it would open a semiconductor factory 20 miles outside Richmond in September of that year. Expectations swelled over time as the plant promised to employ 2,500 workers and pump about $3 billion into the region’s economy.
By 1996 Henrico County and Manassas each landed a semiconductor factory of their own.
The face of Virginia’s manufacturing industry seemed to be changing, but the southwestern portion of the state was stuck on the sidelines.
“At some point in the process, Motorola execs said, ‘Sure would be nice if there was a large-acre park closer to Virginia Tech so we could tie into some of their engineering graduates,’ ” Bopp said. “And that’s what kind of got people all excited.”
But before an industry of that size would settle down in the Roanoke or New River valleys, it needed a large site that had infrastructure to meet its needs, like extensive water and natural gas capacity.
Bev Fitzpatrick, who led the since defunct New Century Council’s efforts to promote regional cooperation, said the area didn’t have that kind of site. The counties had space to house major industrial facilities but didn’t have the money to buy land and infrastructure. On the other hand, cities had enough money, but no space for the buildings.
“About every day, we would run into situations where we weren’t prepared as a region,” Fitzpatrick said. “Being an economic developer, obviously I had real interest in finding a way we could do something different to create opportunities for western Virginia.”
Thus was born the idea of multiple localities joining to prepare large industrial sites.
Virginia’s General Assembly passed legislation in 1997 to allow for the arrangement and 15 localities came together to create Virginia’s First Regional Industrial Facility Authority. The original members included Bland, Craig, Giles, Montgomery, Pulaski, Roanoke and Wythe counties; the cities of Radford, Roanoke and Salem; and the towns of Christiansburg, Dublin, Narrows, Pearisburg and Pulaski.
It was called Virginia’s First because then -state Sen. Malfourd “Bo” Trumbo got the law written so it could happen, Morgan said.
For its debut project, 12 of the 15 members of Virginia’s First bought 277 acres in 2001. The Pulaski County site would eventually grow to 973 acres and become known as the New River Valley Commerce Park.
Local governments began investing to prepare the site for its first tenants, building roads, increasing water capacity and flattening land.
The park opened for business with high hopes in 2002, five years after the regional governments first came together. Original restrictions required potential tenants to agree to buy at least 75 acres of land and invest $130 million in machinery and tools, expectations based largely on the semiconductor industry.
“Hindsight is 20/20, but I think for the most part [the original restrictions] were fairly unrealistic for one project,” Bopp said. “I mean one mega project of that size and investment, using that footprint is really tough and rare to find. There are only a handful of those in the U.S. in any given year.”
By the time the Commerce Park was ready, however, the semiconductor industry was closing factories, not opening new ones. The Goochland County project that started all of the hoopla was cancelled in 1998.
And that wasn’t the park’s only roadblock.
Large manufacturers require high levels of water, sewage and natural gas capacity, among other needs that cost money. Local governments contributed what they could and went after grants to fill in the rest.
“We were trying to pitch it at our level,” McClintock said. “But it was always like one of the infrastructure requirements didn’t match up.”
The park was capable of delivering about 100,000 gallons of water and sewage through its early years, far less than it needed to support the kind of factories it was looking for. It wouldn’t be until 2010 that the region’s governments would find the $6.8 million in grants and loans needed to increase that capacity to 1 million gallons per day.
“It would have been nice if they had bought the land, then got the water, then got a tenant all within one year, or three years or whatever,” Bopp said. “But that’s sadly not the way the real world works.”
The site now represents a $12 million public investment. About $5.5 million of these funds came from grants, and the rest from loans. The localities that chose to buy into the park contribute various amounts depending on the percentage of shares they own. Each year they make a combined $412,500 investment.
Ownership has changed over the years as some localities bought additional shares and others pulled out completely. Pulaski County is the largest owner with 45.98 percent of all shares, meaning it must contribute $180,172 a year to the park. Giles and Montgomery counties each own just over 12 percent and contribute $55,851 a year. Bland and Craig counties and the towns of Dublin and Pearisburg each own less than 2 percent and contribute less than $6,000 a year.
As time went on and localities continued to foot the bill without seeing any kind of tangible payoff, some members started to lose interest in the project.
Even Fitzpatrick, whose New Century Council pioneered the idea of regional industrial parks in Virginia, said he stopped going to Commerce Park planning meetings by 2008.
“I just said I’m not going to spend my time on anything that’s not going to benefit the organizations I’m supposed to be helping, and that clearly wasn’t going anywhere,” he said. “In many ways I do feel ownership in a way because I was part of the New Century Council. And I hate to see something that was so clear and understandable made so confusing.”
Wythe County had already withdrawn from the agreement in order to concentrate on developing its own industrial site. In 2011, Salem and Narrows both withdrew. That same year, Craig and Roanoke counties were “in negotiations” to get out, according to a 2011 report. As of yet neither has withdrawn.
“Really, it had more to do with the fact that budgets were tight, we don’t have as much staff as we used to have,” Salem City Manager Kevin Boggess said. “So we wanted to try to focus on some things that would have a better return for the time and money invested. Over the history of the Virginia’s First project … there really hadn’t been much return for the investment we had put in in man hours and dollars.”
More than a decade had passed since the Commerce Park started looking for tenants. Bopp said about 10 companies had visited the site over the years.
It all served to raise what was looking like an increasingly appropriate question: Is it all worth it?
Virginia’s First commissioned a study to ask that very question in 2011. The final report obtained by The Roanoke Times tells the story of an industrial park that had experienced a decade of “disappointment.”
It cited an inappropriate original marketing strategy, insufficient infrastructure and lack of prolonged marketing efforts as the main drivers behind the project’s failure.
But in the end, the consultants recommended the group stick it out. According to the study, the money raised over the previous 10 years had finally addressed many of the infrastructure needs. With a new set of target industries, the park seemed ready for a tenant for the first time since it opened in 2002.
The participating localities accepted the study’s recommendations, hired a real estate broker to market the site and hit the reset button on the whole project.
Less than two years later, Red Sun Farms announced plans to become the park’s first tenant.
“I think they get a lot of credit for kind of keeping the ball in the air and not giving up on it,” McClintock said. “What’s remarkable to me, they kept it together; they didn’t give up on it. The regionalism is an important concept and they have sort of embraced it. And they stuck with it even through the lean years.”
An entirely new industry
Gov. Bob McDonnell spoke at the Red Sun Farms announcement ceremony in March . A short distance from the podium sat a colorful bouquet of bell peppers showcasing some of the vegetable grower’s work.
They expect to start moving dirt at the Commerce Park in the coming weeks. The first of three phases should be finished by next summer, according to Carlos Visconti, chief operating officer of JemD Farms, which, along with Red Sun, is a subsidiary of Agrícola El Rosal.
The high-tech greenhouse will be computerized with everything from the temperature to the feeding process monitored constantly. It will produce only tomatoes at first but plans to eventually grow cucumbers as well.
According to Visconti’s calculations, it should accommodate 10,000 tomato plants on each of its 50 acres. Each plant produces about 65 pounds of produce, meaning the facility expects to put out more than 32 million pounds of tomatoes each year.
Visconti said Red Sun Farms is excited to be the first tenant at Commerce Park, but the work isn’t finished yet. Before they can be fully operational, he said, the park will need to be outfitted with all the basic utilities.
“Hopefully we can get some special treatment and have all that utilities ready on time,” Visconti said.
According to Red Sun’s contract with Virginia’s First, the entire $30 million project must be up and running by the end of 2016. It will employ 205 full-time workers, 15 of whom must be in management positions with salaries greater than $40,000 per year. The average wage for the rest of the company’s work force must be at least $12 per hour.
These numbers may not have the same ring as those that were tossed around during the semiconductor years, but it’s a start. Fifteen years after its inception, the Commerce Park finally played a pivotal role in bringing a new industry to the region.
By all accounts, landing a first tenant is usually the hardest part of getting a new industrial site up and running. Once you have one, the next shouldn’t be far away, leaders hope.
“It’s like any family,” McClintock said. “Sometimes it’s messy, but in the end everybody is glad they did it. I think now it’s like they have a new sense of momentum. Now they can use this as a platform to advance from.”
Weather JournalIce threat may grow into Sun PM