Virginia officials have gloves off in 'contact sport' of luring more jobs, business to state

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RICHMOND, Virginia — Virginia officials say they've got their gloves off to compete with other states and countries to lure more businesses and jobs to the state.

As Virginia seeks to diversify its economy to be less dependent on federal government-related jobs, officials are concentrating efforts to attract businesses as well as help current businesses succeed and grow. Among the key focus areas for state officials are: bulking up Virginia's infrastructure, boosting workforce development and targeting high-growth sectors like advanced manufacturing and cyber security.

The renewed efforts come as the state seeks to rebound from a disproportionate hit from federal spending cuts, which reduced military contracts in Virginia by about 20 percent, or $9 billion, between 2011 and 2013. Those cuts, officials said, are estimated to have cost Virginia about 154,000 jobs, especially in northern Virginia and Hampton Roads.

"The economy of the past, where we could simply take the economic benefits of federal government activities in our state for granted, is over," Gov. Terry McAuliffe last week told a board of advisers that includes some of Virginia's top business leaders. "We need to discard this entitlement mentality and build an entrepreneurial, innovative and dynamic new economy."

McAuliffe said the state can weather the impact of cuts and a changing national economy to "emerge stronger and more independent," but noted Virginia must diversify if it's going to remain a global economic leader.

Virginia has scored more than 3,430 economic projects with investments totaling about $35 billion and more than 200,000 jobs since 2005, according to state data obtained by The Associated Press. Those projects hail from industries including professional, scientific and technical services, as well as manufacturing for fabricated metal, machinery, lumber, food, chemicals, plastics, and transportation equipment.

Most recently, the state announced that China's Shandong Tranlin Paper Co. Ltd. is planning to invest $2 billion over five years to open an advanced manufacturing facility in Chesterfield County, creating 2,000 jobs. It will make paper products from organic agricultural field waste such as wheat straw and corn stalks, as well as organic fertilizer made by converting the residuals from its paper manufacturing process.

However, the state lost more than 115 projects, representing a potential capital investment topping $19 billion and more than 37,000 jobs since 2005, the data show. Many were lost to neighboring states like North Carolina, Tennessee and Maryland.

Virginia also was engaged in discussions for other projects worth about $20 billion since 2005. Those projects either didn't happen at all or the state decided not to pursue them because officials believed that company requests from the state wouldn't generate the right return on investment for Virginia.

"This whole game of attracting businesses and jobs to your state from out of state ... it's a contact sport. That's the bottom line," Virginia Secretary of Commerce and Trade Maurice Jones said in an interview with The Associated Press. "Our attractiveness is really, really, really strong. We're positioned nicely but we've got some work to do."

Jones said that work includes bulking up Virginia's infrastructure by deploying broadband access to every corner of the state, creating large project-ready industrial sites and ensuring the success of Virginia's ports. Virginia also is concentrating on high-growth sectors such as advanced manufacturing, cybersecurity, information technology, tourism, aerospace, energy, life sciences, health care and international business.

Additionally, Jones said the state is focusing efforts to encourage entrepreneurism and help develop a talented and skilled workforce, as well as keeping regulation "smart and lean."

Incentives also are an important piece of the puzzle to keep Virginia competitive, but economic development officials work to ensure the state yields benefits for any money it gives to companies.

"Every time we hand out a dollar of hard-earned taxpayer money to a corporation, we want to be able to show back an $8 return over 10 years, which we do," said Martin Briley, president and CEO of the Virginia Economic Development Partnership, a marketing organization created by the General Assembly in 1995 to encourage, stimulate and support the development and expansion of the state's economy.

"We have a really good message (and) a good product but we are up against lots of money being thrown at (businesses) by other states and other countries."


Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.

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