Correction: An earlier version of this story incorrectly reported the budget for the new VEDP program for its first two years as $1.1 million. The General Assembly in fact allocated $2.5 million in fiscal year 2019 to launch the program and nearly $5 million in fiscal year 2020.
A state economic development group is increasing its footprint in a downtown Richmond high-rise as it launches a new program aimed at recruiting and retaining more businesses throughout the commonwealth.
The Virginia Economic Development Partnership (VEDP) has signed a lease to fill nearly 30,000 square feet of additional office space in the One James Center building at 901 E. Cary St., the partnership confirmed Tuesday.
The new space is on the seventh floor of the 21-story building and was vacated by law firm McGuireWoods in 2015 when it moved to Gateway Plaza.
Stephen Moret, VEDP president and CEO, said in an email the group plans to move into the space by May 2020, bringing its total footprint in One James Center to about 80,000 square feet, adding to 50,000 square feet it currently occupies on the eighth and ninth floors.
Broker Tom Vozenilek of Colliers International represented VEDP in its lease, while Bruce Boykin, senior asset manager of the James Center, represented the landlord.
VEDP was created by the Virginia General Assembly in 1995 to encourage, stimulate and support economic development and expansion of the state’s economy. The group works with prospective private and publicly traded companies from a variety of industries in an effort to bring more jobs to Virginia.
Moret said the new seventh-floor space, once renovated, will house several VEDP functions, including video and editing suites and training functions. It also will harbor VEDP’s “experience center” for visiting prospects and a Virginia business showcase area highlighting several companies doing business in the commonwealth.
Moret said the primary purpose of VEDP’s office expansion is to jump-start the partnership’s new custom workforce recruitment and training incentive program that will provide employee recruitment, screening, training development and training delivery services at no cost to certain companies recruited to set up shop in Virginia.
The program would be geared only toward a limited number of competitive, trade-sector projects each year, Moret said.
The General Assembly allocated $2.5 million in fiscal year 2019 to launch the program and nearly $5 million in fiscal year 2020.
The program is seen as a way to entice and enhance business development and growth in areas, particularly rural ones, not linked to the state’s booming “Urban Crescent” – the cluster of the state’s top three job growth regions made up of metro Richmond, Hampton Roads and Northern Virginia.
Once fully implemented, Virginia would become the third state in the South to offer such incentives to companies interested in business expansion in the state. Georgia and Louisiana also offer similar programs.
Moret launched a similar initiative in Louisiana called FastStart in 2008 as secretary of that state’s department of economic development before taking over the top job with VEDP in 2016.
FastStart has been credited with helping bring – and maintain – new industry in northern and central Louisiana, two of the state’s most economically challenging regions suffering from continued population loss and low education attainment.
Moret said the program would serve roughly 75 to 100 companies per year, requiring a budget of about $15 million annually within five years.
“That is a comparable funding level based on per-capita comparisons to Georgia and Louisiana, which generally are considered to have the best such programs in the U.S.,” Moret stated.
Once VEDP is able to show the results the program can produce, Moret said he expects there to be strong support to fund it sufficiently.
“Indeed, we are working on a big, competitive project for a rural area right now for which the availability of the custom workforce program starting in early 2020 has been one of our top selling points,” Moret stated without identifying the region or project VEDP is courting.
The partnership recently hired Mike Grundmann, a 20-year veteran of Georgia’s Quick Start program, to serve as VEDP’s senior vice president of workforce solutions to oversee the new program’s installation and implementation.
Moret said Grundmann’s efforts led to Georgia’s work with companies such as Amazon, Gatorade, Pirelli Tire and Sony Music.
In addition, Moret said Grundmann will serve as a conduit between VEDP and colleges in the Virginia Community College System, along with several four-year colleges and universities in the state as full-fledged partners in the initiative. He also is working to assemble a leadership team for the new initiative.
With VEDP’s expansion at James Center, Boykin said about 100,000 square feet has been leased at the three-building complex in 2019.
Riverstone began renovations to One James Center last spring to help revitalize the 30-year-old complex, netting several new tenants, including South State Bank, which recently opened its new 10,000-square-foot office space on the second level of One James Center.
In recent months, the office complex has signed additional office tenants to sizable leases, including HCA Healthcare Capital Division in the former Bull & Bear Club space, architecture firm Baskervill, law firm Whiteford Taylor & Preston, and the U.S. Census Bureau.
Meanwhile, renovation work of the atrium, which connects Two James Center, Three James Center and the Omni Hotel, is underway.
Restaurant chain Chopt announced last month it plans to open a second metro Richmond outpost in the complex, while local health food brand The Pit and The Peel opened in November 2018. Computer repair shop Experimac opened in the complex in March.
Other atrium restaurants include Arby’s and Sesame Sushi. Starbucks also is planning to renovate its space in the building.