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As published in this month's Shenandoah Valley Business Journal....
The Harrisonburg and Rockingham County area have long enjoyed a stable and diverse local economy anchored by some of our area's largest employers. Those include James Madison University, Rockingham Memorial Hospital, Cargill, RR Donnelley, Massanutten Resort, Merck, Rosetta Stone, Eastern Mennonite University, Miller Coors, Dynamic Aviation and White Wave.
The wide variety of employment sectors represented in our local area has provided stability to our overall local economy, which in turn has helped our local housing market remain more resilient than many around the country.
Our current unemployment rate (5.3 percent) is well below the national rate (7.3 percent) and that difference was even more pronounced three short years ago when our local unemployment rate was 6.5 percent compared to the U.S. unemployment rate of 9.5 percent.
Our relatively low local unemployment rate has kept foreclosures from becoming too significant of an issue in our local market.
While there have been more foreclosures than normal in recent years, they have tapered off over the past year.
Between 2000 and 2007 there were only between 50 and 100 foreclosures in any given year in all of Harrisonburg and Rockingham County. This jumped up to a peak of 270 foreclosures in 2010, but has since declined to only 181 in the first 10 months of 2013.
With fewer people losing their jobs in the economic downtown, we saw fewer people losing their homes to foreclosure. We also did not see as large of a real estate bubble that could have caused more local homeowners to be underwater on their mortgages.
The most significant increases in home values in this area happened between 2002 (median price = $136,000) and 2006 (median price = $227,000). Home values shot up 67 percent during this four-year period, which was certainly not a sustainable rate of growth.
However, due largely to the stability of our local economy, we did not largely enter into the declining spiral of rapidly increasing foreclosures paired with rapidly decreasing home values. In the following five years 2006 to 2011 our local home values declined only 18 percent from $226,000 to $186,000.
Since that time, we have seen home values start to increase again.
If there had been greater turmoil in employment in our local area, more people would have lost their homes to foreclosure, which would have dragged home values down even further, as experienced in many larger metropolitan areas.
The strength and diversity of our local economy have helped us to weather many storms in the past, including the recent collapse of the housing market in the United States and ensuing struggles in the U.S. economy.
As economic indicators start to trend more positively, our local area seems poised to continue to grow and diversify.
Exciting new projects such as Innovation Village @ Rockingham will likely continue to spur on our local economy, providing further stability for our local housing market for years and decades to come.
The new Rockingham Memorial Hospital (now Sentara RMH Medical Center) recently built the RMH Funkhouser Women's Center and is now expanding again.
The Sentara RMH Orthopedics Center and Advanced Imaging Services will be a new, free-standing, two-story, 52,000 square-foot facility that is planned to open in September 2015, located next to the Funkhouser Women's Center.
"We are pleased to have an extremely talented staff of medical professionals who are able to offer a comprehensive range of high-quality orthopedic services to our growing community," said Carrie Willetts, program director for Orthopedics, Sports and Spine Services. "The increasing need for these services, and our expansion of staff to meet the growing need for them, led the Sentara RMH Board to approve construction of this new facility."Read more about this exciting addition at RMH here.
An auction was scheduled for University Fields back in September -- and now we know who purchased the property.
Vesper Holdings, a real estate investment firm in New York City, purchased University Fields for $19 million on October 28th.
Five million dollars of capital expenditures are planned including renovating the interiors of the apartments, clubhouse and amenities as well as enhancements to the exteriors of each building and technology upgrades.
Pertinent details about University Fields....
Read the entire press release here.
Read today's Daily News Record article here.
View many more local economic indicators here: HarrisonburgHousingMarket.com
Mortgage interest rates have stayed relatively stable over the past few weeks, despite the shenanigans going on in Washington.
The current average rate for a 30-year fixed rate mortgage is 4.28%.
Virginia is the best state for business, as ranked by Forbes Magazine for 2013.....
"Our study looks at six important factors for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Virginia is the only state to rank in the top five in four areas—only missing on costs and growth prospects."Read more here at Forbes.com.
A private developer (dpM Partners, LLC) is proposing to build a hotel and conference center in Downtown Harrisonburg. The $40M project would be (per the proposal) paid for with $9.5M of public funds towards the 18,180 SF conference center.....and the remaining $39.5M of private funds would help build the remainder of the project to include a 205-room hotel and a restaurant.
And the latest update is that the developer will likely be ready to present the detailed plans (and feasibility study) to City Council by early summer. Read today's DNR article for more details.
White Waves Foods is expanding its Mount Crawford facility, with a recently announced $70M investment. This project will double White Wave's warehouse space, create three new product lines, and add 36 jobs.
Products from the brands shown above (Silk, International Delight, Horizon Organic and Land O Lakes) are all manufactured in the Mount Crawford facility.
Click here to learn more from the April 19, 2013 DNR article.
Downtown Harrisonburg has seen some major growth over the past eight years and there are exciting projects on the horizon. Perhaps that's why Downtown Harrisonburg was recently featured in the national publication pictured above, Main Street Now. In fact, the magazine actually features a lengthy case study highlighting the successes in downtown Harrisonburg, with quotes from Eddie Bumbaugh, Barry Kelley, Andrew Forward and John Sallah....
Click here to download the Jan/Feb 2013 issue of Main Street Now to read the full story about how Downtown Harrisonburg has been transformed in recent years.
Back when SRI International opened a research facility in Harrisonburg (Rockingham County) in 2009 the hope was that this research facility would be a catalyst for new companies being launched in Harrisonburg and Rockingham County based on the research, discovery and innovations at SRI Shenandoah Valley. After all, that is what happened in the Silicon Valley at SRI International's primary research facility.
We may now be seeing the first spin-off company resulting from SRI International's presence in Harrisonburg.
The full details are in an SRI press release, but in summary, researchers at SRI Shenandoah Valley developed a proprietary bed bug detection technology that is being licensed to a new Harrisonburg-based company called Redcoat Solutions, Inc.
"Scientists at SRI developed a rapid, sensitive test that recognizes molecules specific to bed bugs. Redcoat intends to market the device under the brand name RAPID PURSUIT™. Based on preliminary testing, RAPID PURSUIT presents a number of advantages: unlike other detection devices, the test requires no sophisticated equipment and registers a response in minutes, and RAPID PURSUIT is designed to detect only bed bugs, avoiding confusion that could be caused by the presence of other pests."It certainly is exciting to see this first spin off company that will be based right here in Harrisonburg....
"Redcoat Solutions, Inc.'s Chief Executive Officer, John Hall, has drawn upon his knowledge of the bed bug detection and treatment industry in guiding the company toward the upcoming launch of RAPID PURSUIT. "We have assembled an excellent management team, and we have worked closely with SRI to develop a great product that will revolutionize bed bug detection in several industries," said Hall. "We look forward to taking RAPID PURSUIT to market very soon, and we already are at work on new products that we will introduce over the next several months. Redcoat has a great business opportunity, and one of the best things is that it will be based right here in the Shenandoah Valley.""Read more via SRI International's press release.
click here for a larger version of this image
As indicated per a recent building permit issued by Rockingham County, it seems that Neilsen Construction will be building out the first floor of SRI International's Rockingham County facility with a $2.4 million laboratory.
SRI International is located just north of the Harrisonburg City limits, you'll find yourself at the entrance to the Rockingham Center for Research & Technology, more recently identified as Innovation Village @ Rockingham.
click here for a larger version of this image
The Milken Institute recently published their "Best performing Cities" report which ranks cities across the country as to how well they are doing in "creating and sustaining jobs and economic growth." The ranking takes into account job, wage and salary, and technology growth.
Harrisonburg, VA was ranked #22 (out of 179) in the Country --- and #2 in Virginia, behind Charlottesville.
Click here for an interactive data table.
Click here for a PDF of the full report.
Click here for the Jan 28 Daily News Record article.
Innovation Village @ Rockingham is a 365-acre, Class-A planned community located in Rockingham County, Virginia, home of SRI International Shenandoah Valley, where innovators and entrepreneurs can collaborate and create their own businesses.
With strategic partner James Madison University, IV@R is destined to become a high-tech and bio-tech hub, perfectly suited for businesses and organizations in the life sciences, energy, information technology, and agriculture and crop science industries.
Learn more about Innovation Village @ Rockingham....
According to population projections from the Weldon Cooper Center we are will see significant population growth in Harrisonburg and Rockingham County over the next 30 years.
The City of Harrisonburg is projected to grow from 48,914 people (2010 census) to 75,015 people --- which would make it the third fastest growing City in Virginia.
Perhaps this continued growth will help our housing market continue to improve?
Read more in this weekend's Daily News Record article, or on Old South High.
Our local unemployment rates have fallen again (for the 3rd straight month) to 5.3% --- a tie for the lowest rate we have seen in nearly four years.
Read more from yesterday's Daily News Record article.
Did you miss it? The Harrisonburg City Council spent $4.76 million last night. These funds were "reserve suplus funds" --- which are undesignated funds that have built up over time --- not a surplus in a single year's budget.
How did the City Council decide to spend the funds?
So What? Why does this matter? Wasn't it just extra funds that had to be spent? Why should we care where the funds went?
I believe these expenditures reveal the priorities of the City of Harrisonburg --- road improvements, sidewalks, bicycle and pedestrian trails, employee retention, parks, soccer fields. Personally, I think these are great priorities for the City of Harrisonburg to be focusing on to make it a safer, more enjoyable place to live.
In great news for downtown Harrisonburg, Larkin Arts will be opening this Saturday which features an art supply store, gallery spaces, art classrooms for students of all ages, and studios for working artists.
Read more about Larkin Arts on the Do Downtown Blog, or at LarkinArts.com.
Better yet, swing by the grand opening tomorrow (Saturday) from 9A - 5P.
Last night the Harrisonburg City Council discussed a proposed conference center and hotel to potentially be built in downtown Harrisonburg. The proposal went before City Council because the developers are seeking public funding for part of the project.
City Council made a decision to seek competing proposals, which are due to the City by Nov 13, 2012. After competing proposals have been received, the City can decide whether to move forward with a feasibility study to provide more data with which to make a decision about whether to provide the public funding for this project. The hard costs of the potential feasibility study will be paid by the City with funds paid by each developer that submits a proposal.
The project team that is working on this proposed conference center and hotel include:
dpM Partners is based out of Gaithersburg, MD, has recently developed a Westin Hotel in Virginia Beach. Its principal, was the lead developer on the Stonewall Jackson conference center in Staunton and he is also a JMU graduate. The W.M. Jordan Company (proposed general contractor) recently completed the Hilton at Short Pump.
The proposed conference center facility would be 18,180 square feet --- twice the size of the JMU Festival Conference Center --- and would be the largest conference center between Northern Virginia and Roanoke. The hotel would feature 205 rooms and would have a full-service restaurant.
If eventually approved, the City would be contributing nearly $10 million of public funds to this project in the way Tax Increment Financing Bonds.
The specific site has not been publicly identified, for competitive reasons, but it is in downtown Harrisonburg within walking distance of Main Street.
I believe this is exciting news for Harrisonburg as it could potentially grow our local economy even further by bringing regional conferences into our area. It would also certainly be a boon for downtown retail businesses and restaurants.
Stay tuned -- within the next 60 days the City will be seeking competing proposals, and then they will be deciding whether to move forward with a feasibility study.
Here is the first half of the headline from today's Daily News Record....
(the only part that was really printed)
Here is what the second half of the headline could have been.....
So yes, it is true that this is "the biggest monthly jump in nearly a year" -- but put in context, it's not as terrible news as some might otherwise suspect.
The bottom line here is that month by month analysis of local unemployment rates can cause you to have sudden mood swings. After all, last month we were celebrating a tie for the lowest unemployment levels in over a year.....and this month we're mourning a huge increase in unemployment.
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