REGIONAL
              REPORT           

Lorne Bair and Lee Ann Dransfield opened the Satisfied Mind coffee shop and bookstore in downtown Winchester.

Vast arrays of new industries have arrived in the Lord Fairfax Planning District – Winchester, Front Royal and the counties of Frederick, Clarke, Warren, Shenandoah and Page – during the past five years. These newcomers have invested hundreds of millions of dollars and created thousands of jobs. They have opened large factories and monster distribution centers to take advantage of the area’s easy access to major markets.

Clarke County is working to maintain growth without sacrificing its rural character. Winchester, meanwhile, is offering economic incentives to technology-based businesses, from software developers to Internet-access providers. City officials hope their technology zone will attract high-paying jobs and help revitalize downtown.

The zone could make them more visible and make Winchester a regional focal point for tech-based businesses. But for that to happen, techno-firms must find new capital and win over a banking community that’s wary of technology firms, Clawson says.

To give them a boost, the General Assembly endorsed the idea of local technology zones last year. Winchester was the first city to try it, but several other localities are eyeing the legislation, says Shea Holifield, associate director of the state Department of Housing and Community Development. “Winchester has been aggressive, and the tech zone will be an added bonus,’’ she says. “Incentives alone don’t make a business decision, [but] they may help tip the balance.’’

The Lord Fairfax region is unlike much of small-town Virginia: You can get there from here. Two interstate highways, the Virginia Inland Port and an airport on the verge of commercial service have helped make the region a magnet for manufacturing. Distribution centers, such as Kohl Corp.’s new $20 million behemoth in Frederick County and Pen-Tab Industries Inc.’s $15 million facility in Warren County, like being close to major markets such as Washington, D.C., without the high land and labor costs. The area is also reeling in major manufacturers in search of easy routes to bordering states and Canada, as well as the ports in Hampton Roads.

Interstate 81, the transportation backbone of western Virginia, provides easy access from the northern Shenandoah Valley to Pennsylvania, New York and other Northern markets as well as the Southeast. Interstate 66 zips in to Washington, D.C., and its crowded suburbs. Stephen A. Heavener, executive director of the Front Royal-Warren County Economic Development Authority, says the valley’s highway system is a huge asset when it comes to enticing business prospects.

The Virginia Inland Port, meanwhile, is only recently coming into its own after years of being largely untapped by surrounding businesses. Opened in 1989 by the Virginia Port Authority, the inland port is a massive complex at the intersection of I-81 and I-66 in Front Royal. Tractor-trailers unload their cargo there, where it can be stored, then transferred to other trucks or rail cars for shipment across the nation or, through the Port of Virginia, to foreign markets.

The state-run inland port handled more than 13,600 containers in 1995, a 16 percent increase from the year before. More than half were headed abroad, and many came from local producers of such goods as poultry, forest products, drinks and fruit. Doug Cumbia, director of the Center for Workforce Excellence at Lord Fairfax Community College, says the inland port is expected to get busier. “That’s just another boon to our manufacturing base that hasn’t been fully realized yet,” he says.

Washington Dulles International Airport is the nearest commercial airport, but it’s more than an hour away, and local officials are trying to overcome their aviation isolation. Barely detached from its long history as a grass strip, the Winchester Regional Airport is attempting to lure a commercial airline. Surrounding localities help pay for the airport, and it’s home to corporate jets and dozens of private planes.

“We see the airport as an important resource,” Heavener says. “It’s one more thing we can offer.”

The number of factory jobs is dropping nationwide, but manufacturing is proving to be the ticket to prosperity for the northern Shenandoah Valley. Workers enjoy competitive wages and relative job security thanks to a solid manufacturing base and an unemployment rate that hovers just below 4 percent.

In the past five years, the number of manufacturing jobs in Virginia has dropped nearly 10,000, to 403,000. During that same period, however, manufacturing has brought the Lord Fairfax Planning District more than 2,200 jobs. And from 1990 to 1992, as the country experienced a recession, the region’s employment rates outpaced the national average by 10 percent.

The upswing has spanned more than a decade as local business and government officials sought to generate growth and diversify the region’s economy. “It wasn’t one single thing, it was a whole community responding” to issues relating to technology, transportation and the work force, says Gene Shultz, director of the Winchester office of the Virginia Employment Commission.

Warren County recruits have invested or committed more than $140 million toward manufacturing facilities in the past two years, creating 750 new jobs and the potential for 450 more. Heavener says the county is running out of land for new industries.

Despite the new demand for factory workers, their average weekly wage is still reasonable. During the past five years, it has increased less than 3 percent per year from $453 to $513. And only two other employment sectors – transportation and the federal government – pay more in the area.

Employers get a lot for their money because localities in the region recognize the importance of preparing their work force. Shenandoah University and Lord Fairfax Community College take it from there. The university offers a mix of higher education and continuing education, including its Byrd School of Business. The school’s Center for Organizational Excellence sponsors advisory teams that work with businesses to provide training and improve performance.

The community college’s Center for Workforce Excellence in Frederick County works with industry to bring employees up to date with changing technology. Cumbia says his center also works with area businesses to develop new strategies for becoming more competitive.

“The climate is definitely changing,’’ he says. “One of the driving forces behind the center is the rapid change in technology.’’

Economic growth doesn’t necessarily mean smokestacks, traffic and the loss of the region’s rural way of life. At least that’s what Clarke County residents insist. They’re working to preserve the beauty of their county and increase its economic viability at the same time.

Located in the foothills of the Blue Ridge Mountains, Clarke is dotted with horse farms and estates surrounded by rock walls. The county has very little industrial or retail base, so its 12,500 residents are paying dearly for their green space. Rural residents face a real-estate tax rate of 87 cents per $100 dollars of assessed value. Although they’d readily accept a reduction, they’d rather pay through the nose than catch a whiff of a smokestack.

For the past year, Gary Konkel has been charged with balancing growth and green space. Residents want to recruit businesses that respect their approach to economic development. The movement is relatively new for the county, but fears of an industrialized Clarke County have made residents cringe for years – “Don’t Fairfax Clarke’’ is the bumper sticker of choice in the county.

“We didn’t really have our act together because we didn’t have any place to put industry,’’ says Konkel, the part-time and unpaid chairman of the Clarke County Economic Development Committee.

The county seat is Berryville, where there’s no movie theater, and Jane’s Lunch is the best place to get a meatloaf sandwich and some local gossip. Maintaining the Mayberry-like ambiance is paramount, and for Konkel the equation seems simple: Sacrifice a small amount of green space to add clean industry that will provide well-paying, white-collar jobs. The result, he hopes, will be a steady tax rate and better employment opportunities for residents. More than half of them commute 50 or more miles each day to work.

Konkel’s only formal training in economic development is a few seminars, and the job is proving to be a challenge. For more than a year, the county has struggled to get the necessary right-of-way to develop its only industrial park, and zoning regulations make it difficult to put manufacturers anywhere else. But the county is embarking on a more aggressive marketing campaign, and Konkel’s committee hopes the county will hire a full-time economic development coordinator this year.

Rick Richardson, director of advertising and public relations with the Virginia Economic Development Partnership, says Clarke’s situation is not unique. The key to recruiting industry starts with having developable property, he says. “Without zoned property with infrastructure, economic development is only conversation.’’

The ghosts of Union and Confederate soldiers stalk the wide, green pastures and hardwood forests of the Shenandoah Valley, but only the landscape tells their tales to thousands of tourists who visit each year. Without a concerted effort to preserve and develop the region’s many Civil War battlefields, historians fear the land – and its history – will be lost.

Many sites have succumbed to nature and neglect, reducing their value as tourist destinations. To end the decay, valley localities have devised a plan to link more than 16 sites and make them self-supporting. They hope government grants and tourists will provide the money.

The Civil War Heritage Tourism Committee has been working on the unification effort since 1992, and now it faces its last task – helping appoint a federal commission that will draft a plan and figure out how to implement it. The commission, born of congressional legislation creating the Shenandoah National Battlefield Historic District, is expected to recommend that a private, nonprofit organization manage the sites, many of which are privately owned.

The legislation also has the potential to bring $4.5 million a year in federal funding to the project, and the area seems to have substantial tourism potential. The Shenandoah Valley is a nationally recognized name that conjures up picturesque images of rolling farmland, covered bridges and the Blue Ridge Mountains. Anglers, hikers and motorists from across the globe visit Shenandoah National Park, and many of them take side trips to less-known natural wonders like Luray Caverns in Page County.

Tom Christoffel, executive director of the Lord Fairfax Planning District Commission, says the Civil War project will give the region a critical mass of attractions. “It’s something that will connect these properties that are historically connected,’’ he says. “You can’t market just one area.”

Localities in the region are trying to protect Civil War sites before they are lost forever to industrial parks and subdivisions. In Frederick County, the site of the first and second battles of Kernstown, on the Charles Hardy Grim farm, was purchased late last year for $2.7 million after a struggle to raise the money. And in Shenandoah County, the New Market Battlefield Historical Park and Hall of Valor Civil War Museum has been self-supporting for several years.

Bob Carter, with the Virginia Department of Historic Resources, says it’s unclear how the various sites will maintain their autonomy under an umbrella organization. But he praises local efforts to acquire the battlefields. “We can’t promote them,” he says, “until first we save them.”

Pen-Tab Industries closed the doors to its New Jersey headquarters and built a new home base in Front Royal in 1995. The $15 million facility, which makes paper products such as notebooks, created almost 300 new jobs and is expected to expand.

William Leary, Pen-Tab’s vice president and CFO, says the reception the company received from Shenandoah Valley officials tipped the scales. “Front Royal was a community that actively pursued us,” he recalls. “We felt welcome, and we felt we would be an important part of the community.’’

Company officials were impressed with the transportation infrastructure, but they also thought the area could provide a good quality of life for themselves and their employees.

That’s the one bonus that the Internet couldn’t fully convey to Lorne Bair, the co-owner of the Satisfied Mind coffee shop and bookstore in Winchester. The Shenandoah Valley lifestyle is arguably the No. 1 attraction here.

© MARCH 1997, VIRGINIA BUSINESS MAGAZINE