Corrections
Vol. 4 | 2021
INDUSTRY & BUSINESS
Climbing the ladder F
our Hampton Roads companies made it into the elite top 1,000 of this year’s Inc. 5000 list of the nation’s fastest-growing private companies, based on revenue growth during the past three years. Although many industries were affected
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BUSINESS IN THE REGION
by the COVID-19 pandemic last year, the region’s top-ranked Inc. 5000 businesses are in government contracting and real estate — sectors that managed to maintain and, in some cases, exceed previous years’ growth. Newport News-based Markesman Group, a federal contractor, ranked first in the region and 11th in the state at No. 291. It was founded in 2014 by U.S. Air Force veteran Daniel Markes and his childhood friend Alex Wang, who serve, respectively, as the company’s CEO and chief operating officer. Markesman Group provides IT services for government and military clients and is certified through the state’s Virginia Values Veterans (V3) program, which trains and assists companies on hiring military veterans. Markes says it’s been a challenging 12 months as the United States began its drawdown in Afghanistan, which reduced his company’s annual revenue of $4 million to $5 million by roughly 75% and led to the layoffs of 20 intelligence analysts who supported the company’s operations in Afghanistan. However, Markesman shifted resources to focus on other services and was later able to hire 40 cyber-engineers. “[We] increased lost revenue by more than double,” Markes says. “We replaced that revenue retraction with $10 million in revenues within the intelligence community by providing language-enabled cyberanalysis.” The company also opened its new offices in Newport News in February 2020 just before the pandemic shutdown, and the space remains essential for classified projects, Markes notes. In all, Markesman Group grew by 1,583% over the past three years, and it is currently in the process of launching two joint ventures and increasing its ratio of primary contracts
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Four regional companies make Inc. 5000’s top 1,000 by Leah Small
Daniel Markes is CEO of Markesman Group, a Newport News federal contracting business that was the top-ranked Hampton Roads business on this year’s Inc. 5000 list.
to subcontracts. In recent years, Markesman has served as a subcontractor for federal contracts awarded to Leidos Inc., General Dynamics Information Technology Inc. and Northrop Grumman Corp. Other Hampton Roads government contractors on this year’s Inc. 5000 list include Virginia Beach-based Kern Technology Group LLC at No. 336, up from its 2020 ranking at No. 407, and Stratas Corp. at No. 535. Like Markesman, both companies work on federal contracts — Kern’s specialty is the U.S. Navy, and Virginia Beach-headquartered Stratas subsidiary StratasCorp Technologies has won places on several defense contracts, specializing in electronic warfare, logistics support, shipyard IT services and more. Kern reported 1,399% revenue growth over the last three years, while Stratas saw 904% revenue growth. Ranked No. 793 on this year’s Inc. 5000,
Priority Title & Escrow has appeared on the list four years in a row, but this is the first year it has broken into the list’s top 1,000
HAMPTON ROADS BUSINESS 2021
companies. Founded in 2005, the Virginia Beach-based real estate company provides settlement services. It saw 617% revenue growth over the past three years. There was a lot of stress for the company early in the pandemic, notes founder and CEO Joseph LaMontagne. “In April [2020], we saw a lot of deals in our pipeline fall off because people didn’t know what would happen,” he says. “They said, ‘I can’t refinance or buy a house because I’m jobless.’” However, that period passed quickly as interest rates fell rapidly, and Priority “was inundated with a massive amount of business from the end of April on,” LaMontagne says.
Over the past two years, Priority doubled its staff to 400, which allowed the company to meet demand, he says. And adding online notarization services for closings allowed customers to be served remotely during the pandemic. In 2021, the company outranked 11 other title companies nationwide on the Inc. 5000. ■
Photo by Mark Rhodes
The 2021 Hampton Roads Business guide article “Climbing the ladder” mischarac- terized the revenue of the Markesman Group and its financial impact from the military drawdown in Afghanistan. Approximately $4 million to $5 million in annual revenue related to the company’s operations in Afghanistan declined by 75% last year, but the company’s total annual revenue is approximately $15 million.
October 2021 | $4.50 CENTRAL VIRGINIA | REGIONAL VIEW FOR THE RECORD
Richmond-based Dominion Energy Inc. overcharged its Virginia customers $1.2 billion since 2015, according to testimony filed in early September by a utility expert in an ongoing review of the energy monopoly’s finances. Testimony from Heather Bailey, an Austin, Texas-based consultant and former utility executive and regulator, was filed at the State Corporation Commission by the environmental group Appalachian Voices. The commission can’t order any refund of excess profits Dominion earned in 2015 or 2016 because of a Dominion-backed 2018 law called the Grid Transformation and Security Act, said Will Cleveland, senior attorney with the Southern Environmental Law Center, which represents Appalachian Voices. (Richmond Times-Dispatch)
Urban One Inc. CEO Alfred Liggins says Richmond’s proposed ONE Casino + Resort would provide the city much-needed tax revenue.
Richmond casino plan goes to polls by Kate Andrews
E
arly voting is underway across Virginia, and in Richmond, residents will also decide by Nov. 2 whether
Silver Spring, Maryland-based Urban One Inc. can establish its proposed $565 million ONE Casino + Resort in the city. Urban One CEO Alfred Liggins has high hopes for what could be the nation’s first majority Black-owned casino and resort. “South Richmond has been waiting for an economic development opportunity of their own,” he says. “Other sections of Richmond have seen tremendous growth in recent years, but that growth has not, to date, included South Richmond. ONE is going to be a catalyst for new jobs, critically needed tax revenue, and additional economic development and opportunities in this part of the city.” Leonard Sledge, director of the city’s eco- nomic development department, notes that the city expects the casino to generate 1,300 direct jobs. It will also make a $25.5 million upfront payment to the city government if the casino referendum passes next month. “We believe it’s a great opportunity for
the city,” Sledge says. Beyond casino jobs, the Maryland media conglomerate plans to invest $50 million to build a 15,000-square- foot soundstage adjacent to the resort for film, TV and radio production. The casino
15 | Photo by Rick DeBerry JUNE 2019
also plans to partner with Virginia Union University and Reynolds Community College for workforce training, Liggins adds. Brian Anderson, president and CEO of
ChamberRVA, says he supports the resort because it would produce well-paid jobs and include space for 15 local bars and restau- rants. “This is going to be not chain-driven, not corporate-driven, but local restaurant- driven,” he says. “My gut says that it has a good chance to pass.” No public polling has been done to gauge support for the casino, although the process has seen some opposition, particularly at earlier stages. Quinton Robbins, political director for the progressive Richmond For All organization, which opposes the project, lives about two miles from the site and has canvassed area voters. There is “not necessarily a plurality of support,” and there’s also “a lot of anxiety” among voters over the project, he says. “This is another sort of bad deal the city has whipped up.” Robbins notes that Liggins was quoted
in The Washington Post in August as saying that nobody — Liggins included — wants a casino in their backyard. “I think people only want this deal if it’s going to benefit working Richmonders,” Robbins says. ■
www.VirginiaBusiness.com
On Sept. 13, Henrico County-based Fortune 500 insurer Genworth Financial Inc. launched an initial public offering for its private mortgage insurance subsidiary, Raleigh, North Carolina-based Enact Holdings Inc. Enact is expected to trade on the Nasdaq Global Select Market under the ticker symbol “ACT.” (
VirginiaBusiness.com)
In Richmond, workers removed Virginia’s biggest statue of Confederate Gen. Robert E. Lee from its towering stone base and cut it into two pieces in September, ending the monument’s 131-year reign embodying this city’s mythology as the former capital of the Confederacy. Lee’s surrender came so fast — after less than an hour of work — that hundreds of onlookers were caught by surprise. Gov. Ralph Northam and other state officials stood looking on. Northam announced on June 4, 2020, that he was ordering Lee removed from the state-owned property. A handful of local residents challenged the action in court and a judge temporarily blocked it. Though the residents lost their case, they appealed to the Supreme Court of Virginia, which unanimously ruled in Northam’s favor. The state plans to keep the statue in an undisclosed storage location until deciding what to do with it. (The Washington Post)
Prince George County-based aluminum extrusions manufacturer Service Center Metals will spend $101.7 million to build two more facilities in the county, projects expected to create 94 jobs, Gov. Ralph Northam announced Sept. 14. Service Center Metals will build an aluminum extrusion plant and a compact remelt plant in Crosspoint Centre. Founded in 2002, Service Center Metals began operating in Prince George County in 2003. It has two plants on its 30-acre campus in SouthPoint Business Park. (
VirginiaBusiness.com)
After close to 39 years, the Richmond-based alternative weekly newspaper Style Weekly shut down Sept. 8, three years after Norfolk-based Landmark Communications Inc. sold its Virginia newspapers — The Virginian-Pilot, Inside Business and Style Weekly — and their associated businesses for $34 million to Tribune Publishing Co. This May, Tribune Publishing was purchased by hedge fund Alden Global Capital in a $633 million deal that has led to the elimination of more than 250 full-time editorial positions through buyouts offered after the finalization of the deal, including at the Pilot and the Daily Press. (
VirginiaBusiness.com)
PEOPLE
Michael Roussos will be the next president of Rich- mond’s VCU Medical Center, starting in December, VCU Health System announced on Sept. 8. Roussos was previously the lead administrator for University Hospital in San Antonio, where he led the hospital’s COVID-19 response. Roussos also aided in the hospital’s transition to Epic, an electronic medical records system that VCU Health System plans to implement later this year. Before joining University Hospital, Roussos worked at HCA Healthcare for 13 years, most recently serving as CEO of Mainland Medical Center in Texas. (
VirginiaBusiness.com)
VIRGINIA BUSINESS Photo courtesy The Cavalier Daily | 15
The October 2021 article “Richmond casino plan goes to polls” included some incorrect information. If approved, the Urban One Inc.-backed One Casino + Resort would be the only operating Black-owned casino in the nation but not the first. Urban One has pledged to spend $50 million on film, TV and radio productions there.
BUSINESS TRENDS DATA CENTERS
Loudoun County is known as Data Center Alley because it has the world’s highest concentration of data centers. It has received $1.5 billion in tax revenue from the centers over the last six years.
1,000 acres left at the park, says Anthony Romanello, executive director of the Henrico Economic Development Authority. One of the attractions for data centers in
Heads in the cloud C
Data centers are prime gets for Va. localities by Jenny Kincaid Boone
ompare economic development wish lists across Virginia, and you’ll find one item in common. It’s not a
specific manufacturer, a large health care system, or even a lucrative brewery. It’s a data center — or two, or three. These massive warehouse-like struc- tures, full of computers, servers, and other digital equipment, hold the keys to internet connectivity, and they have become darlings of the economic development world. Community leaders laud the many benefits that data centers can bring, from large capital investment and high-paying jobs to significant tax revenues and renewable energy. But they also bring some development chal- lenges, such as requiring large tracts of land and fiber networks. Plus, not every resident wants a massive data center in their backyard. Even so, data centers are multiplying throughout Virginia. And nowhere is that more apparent than in Loudoun County,
58 | OCTOBER 2021
which houses the largest concentration of data centers in the world.
Growing demand “There aren’t that many growth industries in the country right now, places where there is ready capital and ready demand,” says Buddy Rizer, Loudoun’s executive director for economic development. “Data centers would be on that list. In our internal research, we think globally that demand for data centers will outstrip supply for the majority of the decade. The better the commonwealth does [with data center development], the better it is for all of us. It impacts education, … taxes and … quality of life.”
In fact, the data center drive is one of the primary reasons that Will Payne swapped his urban Richmond lifestyle for rural Southwest Virginia. He relocated his marketing business, Coalfield Strategies, to take on a major project to attract economic
development investment — including data centers — to Southwest Virginia. “It’s kind of a point of pride that this region should not be limited to certain indus- tries,” says Payne, who formerly worked as chief deputy for the Virginia Department of Mines, Minerals and Energy, now rebranded as the Virginia Department of Energy as of Oct. 1. “We can go for the growing data center industry.”
Southwest Virginia has some big acts to
follow, in particular Loudoun County, which has more than 25 million square feet of data center space.
Other localities in Virginia are attracting data center companies and eagerly eyeing growth, much of which has been sparked in the past year by a pandemic that intensified demand for cloud-based and streaming data services. From streaming movies on Netflix to holding Zoom meetings, if it’s an online activity, it originates from a data center.
Photo by Will Schermerhorn Photo credit
“There’s no doubt that COVID-19 signifi- cantly increased the need for data or cloud services,” says Stan Blackwell, director of customer service and strategic partnerships for Dominion Energy Inc., one of the state’s top suppliers of power for data centers. “Our view is that this industry is not going to slow down. It’s the adoption of technology by society that’s driving growth.” Loudoun County’s maximum daily energy use for its data centers is 2 gigawatts — “roughly the equivalent of powering 500,000 homes,” Rizer says. Also, data centers require “miles and miles” of fiber cables installed underground. In Loudoun, companies are adding fiber ducts underneath the center of roads, and the cables need to be replaced regularly. Some date back to America Online’s earliest days at Dulles, where its headquarters opened in 1996. Henrico County’s data center industry got its start in the mid-1990s, when con- struction began on White Oak Technology Park, now home to the county’s burgeoning data centers. In 2017, QTS, a data center company, opened a 1.3 billion-square-foot building at the park, its fourth-largest location in the world. Since then, Facebook launched the first phase of a $1 billion data center there in 2020, and there’s still
Romanello photo by Caroline Martin
Henrico is a network access point adjacent to the technology park. Established by QTS, the access point links to three ultra-high- speed, subsea fiber-optic telecommunica- tions cables that come ashore in Virginia Beach, connecting data networks in the United States, Europe and South America. “This is big, big data,” Romanello says. “That’s why this is so critical for the ongoing development of Henrico and of Virginia, really.” But Henrico isn’t trying to be the next Loudoun County, Romanello says. Rather, Henrico views itself as positioned for international connectivity, and it wants the benefits that data centers have proven to bring to many communities. In 2017, Henrico slashed its tax rate for data centers from $3.50 to 40 cents per $100 of assessed value, which was likely a big factor behind Facebook’s decision to come to Henrico.
“Data centers are one of our target industries,” Romanello says. “They bring tremendous capital investment, and they are a good, clean industry.” He points out that Facebook is offsetting its energy consumption at its Henrico data center with in-state solar energy farms. “Even though they consume energy, they are com- mitted to providing renewables equal to what they consume,” Romanello says.
Attracting companies Like Henrico, other Virginia localities are also lowering tax rates in an attempt to woo data centers.
Dickenson, Lee, Scott and Wise counties and the city of Norton entered into a pact in March to lower data center tax rates to 24 cents per $100 of assessed value to lure the lucrative data centers to Southwest Virginia.
The low rate is one carrot, but another is offering less costly opportunities for renewable energy, says Duane Miller, execu- tive director of the LENOWISCO Planning District Commission.
Announcing a unique and thoughtful leadership series
Anthony Romanello, executive director of Henrico County’s economic development offi ce, says the county is marketing itself for international connectivity.
www.VirginiaBusiness.com VIRGINIA BUSINESS | 59
The article “Heads in the cloud” from the October 2021 issue misstated the square footage of a QTS data center in Henrico County’s White Oak Technology Park. The facility is 1.3 million square feet. ■
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