Richmond: Benefits Of A Big City, Minus The Baggage

Virginia’s capital is a Goldilocks city. Richmond has created a “just right” business environment by leveraging its outsized roster of Fortune-listed headquarters, deep pool of knowledge workers, central location on the Atlantic seaboard, reasonable cost of living compared with bigger nearby cities, diverse cultural amenities and a key role in the state’s economic-development strategy.

At a time when company site decision makers across the country are taking a much closer look at mid-sized cities, Greater Richmond offers a business case with the requisite population base, infrastructure and resources found in huge cities but without the baggage that some major urban centers have acquired during the Covid era.

That’s why Richmond provides an ideal location for mid-market and startup companies as well as for large corporate entities that have nested there.

“Relocation from New York City to Richmond was one of the best decisions we’ve made,” says Sal Mancuso, chief financial officer of Altria, a packaged-goods giant that made the move more than a decade ago. “You often see lists about best new places to move to, and Richmond is always on those lists. It’s easy to see why.”

Eric Edwards never left Richmond and, just last year, co-founded a pharmaceutical startup, Phlow, in his native city. “We’re able to attract world-class talent to this area in part because of Richmond’s demonstrated capabilities in advanced manufacturing,” Edwards says. “Richmond has the ingredients we need for success.”

Richmond is gaining newfound attention and appreciation in the economic-development community even though it’s one of the oldest major cities in the United States; it’s where Patrick Henry famously remarked, “Give me liberty, or give me death.” More than two centuries after playing a key role in the American Revolution, Richmond is acquiring new currency in the information era.

The attributes of the metro Richmond market start with its 1.3 million people. They include about 80,000 higher-education students who are attending Virginia Commonwealth University, the University of Richmond, Virginia Union University, Virginia State University and more, and also are part of a group of 1.6 million people enrolled in colleges and universities within 150 miles including the University of Virginia and Virginia Tech University.

That pool comprised the major advantage for the state of Virginia in landing Amazon’s “HQ2” campus now under construction in Arlington, across the Potomac River from Washington, D.C., which eventually is expected to employ 25,000 people. Richmond enjoys an increasingly robust two-way boulevard transporting digital talent between the two cities that are about 150 miles apart.

“Net in-migration numbers show that D.C. talent moves to Richmond in part because of much more affordable housing,” says Jennifer Wakefield, interim president and CEO of the Greater Richmond Partnership for economic development. That’s a big reason CoStar Group, for instance, a real-estate firm based in Washington, was able to fill nearly 1,000 jobs within a year at a new research headquarters it established in Richmond in 2017.

Big-company CEOs recognize the allure of Richmond. The region boasts 11 Fortune 1000 headquarters including those of CarMax, Genworth Financial and Performance Food Group; no other metro market in Richmond’s size category has that many, outside Silicon Valley. Richmond also has become a favorite destination of middle-office facilities and divisional headquarters of large companies which, besides CoStar’s office, includes McKesson’s Medical-Surgical division headquarters and a major data center for Facebook.

And there are more to come. “The Greater Richmond area is in a great position to land more data centers due to several factors,” says Charlene Whitfield, senior vice president of Dominion Energy, one of Richmond’s Fortune 1000 players. They include a large installed base and the fact that the Virginia coast is the landing site for multiple sub-sea fiber cables that are then routed through Richmond before moving to other areas of the East Coast. Also, she says, Dominion provides “competitive electric rates” and has established a data-center practice to focus on this industry.

Increasingly in-demand workers, especially in the digital space, favor Richmond for reasons including its location equidistant between Maine and Miami and within as little as 1.5 hours of both the Appalachians and the Atlantic as well as the nation’s capital. Within metro Richmond, commuters find it the least-congested large city in the country, according to the Texas Transportation Institute.

Culturally, Richmond also offers much including running and biking trails that hug the James River, which also features the only Class 4 rapids running through the downtown core of a major U.S. City. Richmond’s foodie scene receives endless accolades. “And we’ve got literally some of the best street art in the world, on one hand, and world-class museums on the other,” Wakefield notes.

All of this compelled Edwards to stick with Richmond in establishing Phlow, which was selected by the White House to help onshore more production of critical drugs related to Covid-19.

“This was the culmination of a lot of activity that has transpired around Richmond over the last two decades and it’s becoming a hub for advanced pharma tech and manufacturing,” Edwards says. “I’ll never leave.”