Henrico’s Moon Shot

In a 2019 state of the county address, Henrico County Manager John Vithoulkas laid out an audacious principle that has guided the county for years.

He recalled President John F. Kennedy’s 1962 challenge to the nation to put a man on the moon: “Not because it was easy, but because it was hard.

“What President Kennedy said — and what our board [of supervisors] has focused on — is the simple notion of a moment in time,” Vithoulkas said.  

“What will we do with our moment in time? That is all we have and all that matters. What will we do?

“In a figurative sense, we choose to go to the moon.”

Henrico County’s self-described “moon shots” have included everything from laying the foundation for becoming an internet hub attracting global technology companies to keeping a damper on taxes, making Henrico a sought-after location for business and homeowners.

In its march to fulfill its ambitions, Henrico also has become a regional powerhouse for jobs.

With 330,000 residents, Henrico is the state’s fifth largest county in population but is one of Virginia’s smaller counties in land area (ranking 81st) at approximately 245 square miles.

Yet it is outsized in the number of jobs it offers to residents of this region. County officials say its job totals rank second only to Fairfax County statewide.

In the fourth quarter of 2019, just before the pandemic hit, Henrico had 193,000 jobs on the books. That number has dipped, but so have the job numbers for the state’s other top job producers.

“We remain No. 2 in state jobs,” says Anthony Romanello, Henrico’s economic development director.

Henrico was the site of the second English settlement in the New World. The English crown designated it as one of eight original shires, and it once encompassed nine other counties and three cities.

Today, it curves around the city of Richmond and is bounded by the Chickahominy River to the north and the James River to the south.

Census data shows that the county’s population is 52% white and nearly 29% Black. The next largest ethnic group is Asian, at 8.6%, followed by Hispanic, at 5.8%. Residents born outside the U.S. now constitute 12.7% of the county’s population.

Henrico has maintained its property tax rate of 87 cents per $100 of assessed value since 1978 — more than 40 years without an increase — and it has raised the exemption threshold on the business, professional and occupational tax, so that now four of five businesses in the county are exempt from such tax.

“This further cements Henrico’s reputation as a great place for business and investment,” Vithoulkas says.

In early February, Henrico announced what it called a “generational” salary increase for its 11,800 employees. The increases would range from 4.4% to nearly 14% in some instances.  

County teachers will receive a boost of 6.9%, and these increases, along with pay hikes for police officers and firefighters, make Henrico the regional pay leader for those positions, according to county officials. No tax increases would be needed to fund the raises.

Romanello views Henrico’s progress this way: “It’s like the old saying, ‘Every overnight success is 10 years in the making,’ ” he says.

A ‘Unique and Innovative Economic Development Opportunity’

The latest turn in Henrico’s skyward journey is the proposed $2.3 billion GreenCity development. As envisioned, GreenCity would include a 17,000-seat arena, 2,300 residential units, two 300-room hotels, 2.2 million square feet of office space and 280,000 square feet of retail, with four sequences of developments over the next 12 years.

It would rise north of East Parham Road at the Interstate 95 interchange and extend to Interstate 295, providing thousands of new construction jobs, as well as permanent employment for many others.  

Protected trails and an interlinking series of parks are also part of the proposed eco-district that would preserve and restore natural resources. Individual residences and other buildings would be designed to meet the goals of net zero energy, water and waste.  

“If what I’ve been told is correct, this would be the largest eco-district east of the Mississippi,” Vithoulkas says.

The proposed arena is likely salt in the wounds of Richmonders who envisioned a new arena to replace the deteriorating Richmond Coliseum. That proposal failed last February when City Council rebuffed Mayor Levar Stoney’s overtures to embrace the arena, as well as the overall $1.5 billion Navy Hill project that would have surrounded it.

Many opponents said the financial risk to Richmond would have been too great had the project failed.

Vithoulkas says he was determined to squeeze the risk factor out of the project when developers of the Navy Hill proposal came to him in the spring of 2020 after its failure in Richmond, asking if the county had a site for a “unique and innovative economic development opportunity.”

Initially, the way the contact came in was, ‘Hey, we would like to take this arena into Henrico,’ ” Vithoulkas recalls.

“The reaction that they got was, ‘We’re not looking to put any public money into an arena. But if the math works, show us the numbers, and we’ll continue the conversation.’

“When they came back, they came back with GreenCity,” Vithoulkas says.

He says an eco-district appeals to tech companies and other businesses looking for a high level of sustainability with no carbon impact, spurred by a societal shift toward environmentalism and climate awareness.

The $250 million arena, Vithoulkas says, will be a regional amenity, as well as another boost to Henrico’s highly developed and profitable focus on sports tourism, which had an economic impact of $66.2 million in 2019. (In another large county development project, Virginia Center Commons is undergoing a transformative makeover for sporting events.)

The area encompassing GreenCity — the county-owned 93.6-acre former headquarters of Best Products and the 110-acre Scott Farm adjacent to it — currently provides little or no tax revenue to Henrico, Vithoulkas says.  

Richmond-grown Best Products was a $2 billion retail business that encompassed more than 200 stores in 27 states before it went out of business in 1997.  

Henrico purchased the headquarters tract in 2011 for $6.2 million — about half of what the sellers wanted, according to Vithoulkas — and it anticipates selling the property to GreenCity for the same price to push the project along.

Henrico is projecting that the privately financed arena will produce revenues of $1.4 billion over the 30-year repayment of bonds. Debt service will total $650 million, and Henrico would collect $750 million.

The bonds for the arena would be issued through a Community Development Authority, a method that Henrico has used to finance three major projects that have now become big taxpayers: Short Pump Town Center, Reynolds Crossing and White Oak Village.

No public dollars and no public debt would be involved in GreenCity. This is far different from the proposal in Richmond, in which a proposed tax-increment financing district would have pulled incremental real estate tax revenues from parts of downtown to help pay for city-issued bonds that would fund a new arena.

The Henrico Board of Supervisors has unanimously endorsed the project.

“Once it’s running and out of the ground, fully built, [GreenCity] will be producing revenues greater than our top 10 taxpayers combined,” Vithoulkas says.  

“This is not their first rodeo,” he says of Concord Eastridge Inc. and Future Cities LLC., the companies that have formed a joint venture to create GreenCity LLC, the overall development company.

Susan Eastridge, CEO and president of Concord Eastridge, doesn’t expect any difficulty in attracting investors for GreenCity because of its unique niche as an eco-district.

“Most of the big institutional players — which are the Goldman Sachs, the J.P. Morgan Chases — they’re putting together really big sustainability funds, and they need good places to put that money because the investors who are investing want to see sustainable development happen,” Eastridge says.

A Magnet for Technology Companies

While GreenCity has received a lot of attention recently, perhaps the county’s biggest draw for continued growth has been its rise as an internet hub with the world’s fastest data transmission capability.

In 2017, the QTS Data Center at White Oak Technology Park opened the Richmond Network Access Point, which serves as the termination point for two ultra-high-speed fiber-optic cables that transfer data from Europe and South America.

Since then another subsea cable has arrived at the White Oak Technology Park, and a fourth cable is on its way. The three on-site cables currently transmit data from Spain, France and Brazil. The fourth cable, which is expected to be operational in the third quarter of 2021, will transmit data from Capetown, South Africa.  

Romanello says Henrico’s capability to facilitate the world’s fastest data transmission will be a magnet for technology companies and related businesses.

The 2,400-acre White Oak Technology Park in Sandston is already home to three data centers, including one for Facebook, which is expected to soon become the county’s biggest taxpayer.

“Facebook came in and said it was going to build the largest data center in the world [in Henrico], and then they doubled it,” Vithoulkas says.

The county estimates that once Facebook’s 2.5-million-square-foot data center is completed, it will have a $141 million annual economic impact on Henrico and the region.

Facebook opened the first phase of the $1.75 billion data center last August.

Although the facility is expected at buildout to have a modest number of employees — about 200 — it will generate millions of dollars in taxes on equipment, largely servers, which are continually being replaced and updated and their value renewed.

Data centers house critical applications and data. Facebook’s data centers process and store the status updates, photos and videos that are shared by Facebook users.

Today, nearly 1 in 10 of Henrico’s workers are employed by a tech enterprise. 

In 2017, the Henrico Board of Supervisors reduced the tax on data centers from $3.50 to 40 cents of assessed value — the lowest in the state at the time — as a way to attract Facebook and other companies looking for a home for their data centers.

It was recently announced that the state will create a center for cloud computing in eastern Henrico that VCU will lead as part of a partnership with other institutions and industries.

Today, nearly 1 in 10 of Henrico’s workers are employed by a tech enterprise.  

Nick Serfass, executive director of the Richmond Technology Council, says the data centers and internet hub in Henrico’s White Oak Technology Park are a sign of the hyper-technology future.

“Ultimately, it all stems from a rise in cloud computing and a need for faster, bigger streams of data to be transported back and forth,” Serfass says. “A lot of what we call hyperscalers, companies that use a lot of data — Facebook, Google, Amazon, Microsoft — those are the kinds of folks who are looking at building their own data centers. It’s figuring out strategic places where they can put them.

“Why that’s important is that it’s not just great having those large companies in town, but having those companies around also increases other business opportunities, which I think is the peripheral story here,” Serfass says.

“There’s going to be B2B, B2C [business-to-business, business-to-consumer operations]. There’s a lot of other business that can be done now that we have these big players in town,” he says.

Serfass adds that Henrico and the Richmond region could become even more of a destination for internet companies, which for years have focused on Northern Virginia.

Land is cheaper in this region, and the cost of living overall is far less. Besides, he says, the Richmond region already has a ecosystem of businesses that use large amounts of data.

For one, financial companies are big users and consumers of data, and Serfass notes that the region is “kind of a financial tech hub. SunTrust [now Truist] has a big presence here, Capital One, the Federal Reserve.”

He says the region’s burgeoning biotech scene at VCU and other sites also portends growth for users of biotech data. The effects of the pandemic could accelerate the need to move data around for biotech and medical technology issues, according to Serfass.

Thriving Through the Pandemic

Henrico’s residents and its employees have benefited from the county’s economic progress.

Two new high schools are under construction (J.R. Tucker and Highland Springs high schools) funded by the county’s 4% meals tax, which has been collected since 2014. The Board of Supervisors specifically provided that all meals tax proceeds would be directed to the schools for capital and operational needs. And in recent years, new libraries have been built (Fairfield, Libbie Mill and Varina), as well as new aquatic centers (Fairfield and Regency Square).

Even during the recent period of economic turmoil caused by COVID-19, Henrico has thrived.

According to the Virginia Economic Development Partnership, in 2020 Henrico led the region with 1,605 new jobs. Chesterfield County recorded 255, while Richmond logged 37.

Two companies shifted their headquarters to Henrico in 2020: Kroger relocated its mid-Atlantic division headquarters from Roanoke, and ASGN Inc., a fortune 1000 IT provider, moved to the county from California.

One hiccup in Henrico’s economic fortunes occurred in early 2021, when Wells Fargo & Co.’s wealth and investment management group moved operations from the Innsbrook Corporate Center in western Henrico to St. Louis and Minneapolis, laying off 320 employees.

Looking to future development, in 2019 the county purchased the 1,184-acre former Wilton Farm in eastern Henrico off Osborne Turnpike as possible site for a park, schools, a history museum and business expansion. A year earlier, Henrico acquired 400 acres as part of the sale of historic Malvern Hill Farm off Route 5, also in the eastern part of the county.

“We don’t acquire Malvern Hill or a Wilton Farm on a whim,” Vithoulkas says, noting that the expectation is that those purchases will give the county flexibility as growth occurs.

Vithoulkas, the son of Greek immigrants, says entrepreneurialism is baked into what he calls “the Henrico way.”

He says other localities have taken note.

“In the past three or four years, we’ve exported two county administrators,” Vithoulkas says.

Joseph P. Casey, a former Henrico deputy county manager, was named Chesterfield County’s chief administrator in 2016, and Edward N. Smither, a former director of finance for Henrico, was named county manager for Powhatan in 2020.

Vithoulkas, who became Henrico manager in 2013 after rising through the ranks, says he and his team have no interest in bragging about what Henrico has accomplished over the years, especially in recent years.

“It’s just our moment,” he says, “and we’re trying to do as much with it as possible.”

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All About Business

If there is a touchstone for Henrico’s modern era, it might be the local election of 1995.

County Supervisor Pat O’Bannon recently went into her attic to find the newspaper that marked what became a watershed moment.

The headline for a story about the board of supervisors election, she says, put it all in perspective: “Henrico Elects First Woman, First Black.”

O’Bannon, an ex-newspaper columnist and fundraiser, and Frank Thornton, a French professor at Virginia Union University, had broken gender and racial barriers in the same election.

They couldn’t have been more different.

O’Bannon is the wife of former longtime Republican state legislator and physician John O’Bannon and is a serious fiscal conservative.

Thornton was working to lift the voice of African Americans in Henrico and trying to get a fair shake for residents in eastern Henrico.

But they shared a belief in common — one that has become a mantra for Henrico County as the two supervisors serve their seventh terms: “An emphasis toward business,” Thornton says.

“Business is important,” O’Bannon says. “They pay the lion’s share of the taxes, 70%.”  

O’Bannon sees a lot of growth still ahead. “It appears that we’re going to be be [growing] more and more,” she says.

Thornton won elective office in 1995 with the support of what at the time was called the Henrico County Civic League.

“Being the first Black, I had a lot of suspicions,” he says, but as the county has become more diverse, the views of the board of supervisors have become more diverse as well.

Thornton says the local government now doesn’t support any single group, instead focusing on “what’s best for all our residents. Fairness, I can deal with that.”

He believes that “the future of Henrico County is in the eastern corridor,” where he and Henrico’s other Black board of supervisors member, Tyrone Nelson, have their districts, Fairfield and Varina, respectively.