Norfolk: Economy

Norfolk: Economy

Major Industries and Commercial Activity

Norfolk serves as the business and financial center of the Hampton Roads region of Virginia. Shipbuilding and shipping are a vital part of Norfolk's economy, with the city's 45-foot-deep channel allowing it to accommodate very large ships. As a major seaport through which millions of tons of cargo pass each year, it handles such commodities as tobacco, cotton, timber, coal, truck crops, and grain.

With an ideal harbor and waterways, the city is the site of the Naval Base Norfolk, the largest naval base in the United States and the world. It also serves as home to the headquarters of the Fifth Naval District of the Atlantic Fleet and the Second Fleet, and it houses the district headquarters of the Coast Guard. In addition to the thousands of U.S. Navy personnel stationed in Norfolk, many local citizens also work in naval operations. The city is second only to San Diego, California, in the number of retired navy men and women who reside there.

Local industries include ship and light truck manufacturing, creation of law enforcement and military equipment, plastic production and communications. Between the rich local history and the presence of a plethora of seaside resorts, tourism is another important local industry. Local boats provide ferry service to nearby Portsmouth.

Items and goods produced: chemicals, fertilizer, textiles, automobiles, ships, military and law enforcement equipment, agricultural machinery, seafood, and peanut oil

Incentive Programs—New and Existing Companies

Local programs

Through its Local Enterprise Zone Incentive Program, the city of Norfolk offers local tax and fee reductions on a five-year declining percentage ratio for business license and utility tax. In the first year of qualification a one-time-only 50 percent reduction is allowed on fees related to building, electrical, mechanical and plumbing permits. In the case of businesses that invest a minimum of $500,000 in the Local Enterprise Zone, the city agrees to complete complementary public improvements in the immediate vicinity. Additionally, the city offers security audits free of charge to businesses in the zone.

State programs

In its State Enterprise Zone Program, the State of Virginia offers tax incentives, property tax incentives, sales and use tax exemptions, and job grants. Among Virginia's tax credits are a General Income Tax Credit (up to 80 percent in the first year and 60 percent in years 2-10) and a Real Property Improvement Tax Credit (up to 30 percent, not to exceed $125,000 within a 5 year period).

Job training programs

In the Hampton Roads area, Opportunity, Inc., provides employers and job seekers with necessary networks and resources in an effort to achieve their mission of "strengthening the localized talent pool of workers to match private sector investments in technology, capital, and product improvement." Acting under the auspices of the Hampton Roads Workforce Development Board and funded through the Workforce Investment Act, the agency offers workshops, links to online tools and access to a statewide collection of strategic partners.

The Hampton Roads Chamber of Commerce also supports the Workforce Focus program, which keeps local employers abreast of labor market trends, employment best practices and workforce resources.

Development Projects

The Norfolk 2010 strategic plan calls for a menu of renovation and new construction in the downtown and outlying areas; new office space, retail trade facilities, entertainment enterprises, and hotels are currently being built in the revitalized city center. The Chesapeake Bay project began construction in 2003 and will eventually house 237 luxury condominiums along an attractive Harbor Walk. The development will be mixed use, presenting an urban feel to a beachfront area designed to encourage pedestrian usage. Additionally, Trader Publishing announced in August 2004 that it plans to bring its national headquarters to downtown Norfolk, which will bring 1,600 new jobs to the area.

On the former site of a brick and earthwork fort, the new Fort Norfolk has been taking shape as the bridge between the downtown area and the Hampton Roads major medical complex. Construction of a $30 million Public Health Center contributed a biotech incubator, in which bioelectric research and experimentation will be conducted. The facility is joined to the Eastern Virginia Medical School by a walk-way and has also allowed for vast expansion of the medical school's Edward E. Brickell Medical Service Library. The city of Norfolk demonstrated considerable foresight in designating Plum Point as open space, a parcel of land that was donated by the Virginia Port Authority.

Further capitalizing on its layers of history and potential for increased tourist trade, the City of Norfolk is supporting the renovation of several historic structures in the Church Street district within the city center. The Attucks Theater, begun in 1919 and named after the African American man who was the first casualty of the American Revolution, is the oldest theater in the state and remains a landmark for African Americans throughout the U.S. The Crispus Attucks Cultural Center, Inc., will additionally receive its share of attention as the city continues to build on its history.

Old Dominion University and its Real Estate Foundation have partnered with the City of Norfolk in expanding and updating the campus, including office and research facilities, shopping areas, a convocation hall and other components of what is being called the University Village.

Economic Development Information: Department of Development, City of Norfolk, 500 East Main St., Suite 1500, Norfolk, VA 23510; telephone (757)664-4338

Commercial Shipping

In 2004, more than 14.7 million tons of cargo passed through the port of Virginia in Norfolk, a 6 percent increase from the previous year. Between the purchase of eight Suez-class cranes and a $280 million dollar renovation and expansion, the port is poised to compete for the number one spot as an East Coast container port. Exports of coal, food products, tobacco, and the majority of grain from the United States pass through the port of Norfolk.

Norfolk International Airport provides a cargo service in support of the city's 135 motor freight carriers. Railroad freight carriers include the Norfolk Southern, Norfolk & Portsmouth Belt Line, Norfolk & Western, Southern, Eastern Shore, and CSX railroads.

Labor Force and Employment Outlook

The Chamber of Commerce notes that the local workforce is numerous but unprepared for the new employment opportunities offered by the community's companies. Efforts have been underway since at least 2003 to enlist the support of Hampton Roads employers in advocating for classes and degree programs that are tailored more closely to the needs of local industries; at the same time, the city continues to focus on attracting technological, medical and industrial companies that will entice graduates of the region's universities to stay and work locally.

The following is a summary of data regarding the Norfolk metropolitan area labor force as of 2003.

Size of nonagricultural labor force: 730,800

Number of workers employed in . . .

construction and mining: 44,700

manufacturing: 59,800

trade, transportation and public utilities: 134,900

information: 16,100

financial activities: 38,000

professional and business services: 98,800

educational and health services: 78,100

leisure and hospitality: 77,300

other services: 33,500

government: 149,800

Average hourly earnings of production workers employed in manufacturing: $18.42

Unemployment rate: 4.0% (December 2004)

Largest employers	Number of employees
Sentara Health Care	15,000
City of Norfolk	6,000
Norfolk Public School District	5,280
Naval Station Norfolk	4,000
Old Dominion University	1,600
Norfolk Southern	1,100

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Norfolk area.

2004 (3rd Quarter) ACCRA Average House Price: $266,775

2004 (3rd quarter) ACCRA Cost of Living Index: 102.1 (U.S. average = 100.0)

State income tax rate: 2.0% to 5.75% (corporate business tax rate: 6%)

State sales tax rate: 3.5%; 3.0% on food

Local income tax rate: None

Local sales tax rate: None

Property tax rate: Based on 100% of Fair Market Value × $1.40 per $100 of assessed valuation ($1.58 per $100.00 for the business district).

Economic Information: Hampton Roads Chamber of Commerce, PO Box 327, Norfolk, VA 23501; telephone (757)622-2312