Seeking ‘quick wins’ for a distressed region: New economic initiative aimed at Southwest Va.

Southwestern Virginia lawmakers are taking another swing at creating new economic growth in a part of the commonwealth that has lagged far behind Northern Virginia, metro Richmond and Hampton Roads in job creation.

They were in Abingdon last week to announce InvestSWVA, a public-private partnership that Will Payne, the project lead and managing partner of Coalfield Strategies, said will focus on energy innovation and “future of work”-style jobs with high wages. InvestSWVA will target advanced manufacturing, agriculture and forestry, food and beverage manufacturing, information and emerging technologies and energy and minerals.

“We’re going to be aggressive, focused and dependent on results,” Payne said.

Del. Terry Kilgore, R-Scott, said he’s looking for InvestSWVA to produce some “quick wins” in the “near future.”

Southwest Virginia, especially the localities designated by the Virginia Initiative for Growth and Opportunity (GO Virginia) as Region One — Bland, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise and Wythe counties, and the cities of Bristol, Galax and Norton — have struggled in comparison to other regions. 

Coal mining, which powered both the nation’s electricity and the regional economy through the 20th century, has declined since the 1950s, and at an especially-fast rate since 2012. This year saw renewable energy eclipse coal, albeit temporarily, as America’s biggest source of electricity. In July, Blackjewel and Revelation coal companies filed for bankruptcy, abruptly putting nearly 500 Virginia miners out of work. Downstream industries such as the railroad and mining equipment makers have suffered, too.

Four of the region’s counties—Buchanan, Dickenson, Lee and Wise—are classified by the Appalachian Regional Commission as economically distressed. The region’s unemployment rate sites at 3.5%, a little more than half a percentage point more than the statewide figure of 2.9%, and its median income sits at $34,237, less than 40% the state median of $86,279.

The region also has suffered depopulation, with the Weldon Cooper Center for Public Service at the University of Virginia projecting that every locality within Go Virginia’s Region 1 has lost population since 2010 — collectively more than 20,700 fewer people, or about 5% of the total.

The outlook for the future isn’t rosy, either. In its report on the future of work released in July, the McKinsey Global Institute labeled most, although not every, locality in the region as “distressed Americana,” which it defined as a struggling rural area. McKinsey also projected that job creation in every locality in the region but one would have less than 0% net job growth through 2030. The exception, Washington County, is projected to have 0-5% net growth. 

Clearly, InvestSWVA faces stiff headwinds in its bid to attract the jobs of the future to southwestern Virginia. 

The initiative will look to make gains largely through connections made by Payne and his team, which includes former State Sen. William Wampler, Will Clear of the Virginia Department of Mines, Minerals and Energy’s economic development team, and the Richmond-based Hunton Andrews Kurth law firm. 

The Hunton Andrews Kurth connection brings with it Todd Haymore, who served in the cabinets of Govs. Bob McDonnell and Terry McAuliffe and who famously lured Deschutes Brewery to Roanoke by wooing its owners with his Grateful Dead fandom. 

Payne also draws on a bipartisan history in Richmond. He began his career working with Republican State Sens. Tommy Norment of James City and Ken Stolle of Virginia Beach before serving in Democratic Gov. Ralph Northam’s administration and writing a biography of former governor and current Democratic U.S. Sen. Mark Warner.

The InvestSWVA project is funded through at least two years with a 1-to-1 public-private match — or at least something close to it — with $400,000 coming from the Virginia Tobacco Commission, $300,000 from Point Broadband, $10,000 from American Electric Power and $10,000 from LENOWISCO Planning District Commission. That leaves $80,000 still be funded, and InvestSWVA is looking for more corporate partners, said Taylor Keeney, director of strategic communications and advocacy for Hunton Williams Kurth.

InvestSWVA’s first move is partnering with the Northern Virginia Technology Council, the trade organization for about 1,000 tech-related companies and organizations. The hope is to sell companies on southwestern Virginia’s inexpensive land and cost of living, as well as its natural beauty and quality of life.

“It’s real,” Haymore said. “One particularly important attribute that southwest Virginia can offer is a high, high quality of life.”

InvestSWVA also has secured $50,000 from Go Virginia’s Region One Council for what’s called Project Oasis, which targets data centers, in part by selling the idea of cooling their facilities by circulating water in underground mines. In chasing data centers, InvestSWVA is competing with other regions that are using a special tax exemption for the sector. That list includes communities around the state such as Danville, which is pairing tax breaks and investments in solar generation in hopes of attracting data centers.

In response to a question about the report by the McKinsey Global Institute labeling most of southwestern Virginia’s localities as “distressed Americana” and projecting negative growth, Del. Israel O’Quinn, R-Washington, responded with a defense of the region’s public education system.

“Our friends at McKinsey have a history of playing both ends against the middle,” O’Quinn said. “If you look at our education system in Southwest Virginia, we’ve led the state the last several years. We’ve been number one. When we tell that story in Richmond, we still get a look of disbelief, but the numbers prove it’s right. The K-12 pipeline is full of bright kids ready to succeed today. That’s a message that our team will work to sell in much bigger venues than Virginia.”

Kilgore reacted to the word “distressed,” used both in the McKinsey report and by the Appalachian Regional Commission to label struggling local economies, as a way to pivot to talking quality of life again.

“‘Distressed’ allows us to work harder,” Kilgore said. “With this team and our local partners and economic developers, we can get those wins. We do have those opportunities. Look around — this is a great place to move to. We’ve got great environments. We think we can use that to our advantage.”

InvestSWVA will look to build on those regional strengths to attract “quick wins” and high-tech, high-paying jobs of the future as the coal industry continues to crumble. It’s funded for two years.

The clock is running.