Roanoke Business- July 2014 by Virginia Business

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JULY 2014

SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION

50 years of

Smith Mountain Lake

The lake and dam generate electricity and economic prosperity

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CONTENTS SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION

July 2014

F E AT U R E S COVER STORY

50 years of Smith Mountain Lake

The lake and dam generate electricity and economic prosperity. by Kathie Dickenson

BANKING & FINANCE Subprime again?

Borrowers with low credit scores can get loans, but bankers say it’s different this time. by Sandra Brown Kelly

RISK MANAGEMENT Climate change

It’s adding a new element of risk for people, government and businesses. by Joan Tupponce

RETIREMENT Life after work

D 26

What does a reasonable retirement savings plan look like? by Sue Lindsey

COMMUNITY PROFILE: ROANOKE

14 T

M 32

City renaissance

INTERVIEW: JONATHAN WHITT

Building with technology by Tim Thornton

by Beth Jones

JULY MAY 2014

Whitt invites technology sector to ‘row together.’

“Roanoke is on fire right now.”

NEWS FROM THE CHAMBER

RADFORD UNIVERSITY welcomes

Dr. George Low as Dean of the College of Business and Economics

is proud to announce Dr. George Low as the new dean of the College of Business and Economics. Low’s expertise in marketing communications

management, brand and product management and marketing performance management will help shape the future of business education at Radford University. His exciting vision will build upon the successes of the College of Business and Economics by focusing on scholarship and the preparation of students for dynamic careers in the global marketplace. Low comes to RU from Texas Christian University, where he served as associate dean for undergraduate studies. He has also served as an American Council on Education (ACE) Fellow at the University of Texas at Arlington and taught marketing at Texas Christian University, University of Lethbridge and Brigham Young University’s Marriott School of Management. Prior to his career as an administrator and educator, Low worked in advertising throughout Canada. Radford University’s College of Business and Economics undergraduate and graduate programs are accredited by The Association to Advance Collegiate Schools of Business, which is the hallmark of excellence in business education accreditation and earned by less than 5% of the world’s 650 business schools in 45 nations. The college has also been listed as one of the Princeton Review’s “Best 295 Business Schools” in the U.S. for 2012, 2013 and 2014.

www.radford.edu/cobe

FROM THE EDITOR

Spending and values

ducation is important. Study after study shows that, on average, people with college degrees make much more money over their lifetimes than people without college degrees. A skilled and licensed electrician may have better prospects than an art history major, but that electrician likely got some training beyond high school, maybe through a community college. Everyone, it seems, agrees that our collective economic success depends on more and better education in the STEM-H disciplines — science, technology, engineering, mathematics and health care. Universities concentrate on turning out high-tech innovators and entrepreneurs. Community colleges focus on developing “the middle skills” of workers required to operate the high-tech machines those high-tech innovators create. Go to any gathering of two or more businesspeople or economic development professionals, and you’re likely to hear a lot about how important a welltrained workforce is. But there’s an old saying that you can tell what’s important to a person if you get a look at that person’s checkbook. People — and societies — tend to spend their money on things they value. According to Inside Higher Ed, an online magazine covering higher education, Virginia government spending on higher education fell 6.7 percent from 2009 to 2014. It didn’t fall from a great height. Virginia ranked 40th nationally in state and local spending on higher education in 2008, according to a 2009 report from the State Council on Higher Education titled “The Erosion of State Funding for Virginia’s Public Higher Education Institutions.” “Unfortunately,” the report declares, “a crisis in the funding of Virginia’s public higher education system has been evolving over the last two decades.” While state spending has declined, tuition and fees have continued to increase. Sixty-five percent of the average bill a freshman pays at a Virginia public college goes for nonacademic services, according to a Joint Legislative Audit and Review Commission report released last September. Some of that money covers debt on nonacademic buildings, such as student centers. An average of $1,185 goes to athletics because, as the report says, “No athletic program in Virginia generates enough reve-

JULY 2014

nue to cover all its expenses.” (Virginia Tech’s $267 was the lowest athletic fee in the state, according to the report.) Money is going into higher education, of course. According to The Chronicle of Higher Education’s annual survey of public universities’ executive compensation, nine American public universities paid their presidents more than $1 million in 2013 — three times as many as in 2011. Virginia Tech’s Charles Steger, who recently retired after heading the school for 14 years, had the highest compensation among the commonwealth’s presidents, $836,886, according to The Chronicle. Radford University President Penelope Kyle signed a new contract last year that, according to a report in the Richmond Times-Dispatch, is worth $636,918 a year, plus the use of a house. That put her behind University of Virginia President Teresa Sullivan’s $731,537, but ahead of the presidents at William and Mary, which generally rank in the top 10 among public schools nationally, and George Mason, the commonwealth’s largest university in terms of total enrollment (fulland part-time students). Collectively, Virginia’s three highest-paid college presidents made a little more than $2.3 million, according to The Chronicle. That’s about $200,000 more than U.Va. football coach Mike London is paid, but roughly $200,000 less than Virginia Tech football coach Frank Beamer’s pay. It’s also less than new Virginia Tech basketball coach Buzz Williams will average annually over his seven-year contract. Not everyone on campus is doing so well. According to the American Association of University Professors, more than half of the people teaching at colleges and universities are adjuncts, parttime employees with no benefits and virtually no job security. An adjunct instructor, the second-lowest rank among educators at Virginia’s community colleges, teaching year round and teaching as many classes as the system allows, can earn as little as $14,280 a year. A person working 40 hours per week at minimum wage would earn $800 more. People — and societies — tend to spend their money on things they value. Editor’s note: In the interest of full disclosure, I am an adjunct instructor at Virginia Western Community College in Roanoke. I am not paid at the lowest end of the pay range, and I do not teach the maximum number of classes the system allows.

SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION Vol. 3

JULY 2014

President & Publisher Roanoke Business Editor Contributing Editor Contributing Writers

Art Director Contributing Designer Contributing Photographers Production Manager Circulation Manager Accounting Manager Advertising Sales

No. 7

Bernard A. Niemeier Tim Thornton Paula C. Squires Kathie Dickenson Beth Jones Sandra Kelly Sue Lindsey Joan Tupponce Adrienne R. Watson Pam McAllister Sam Dean Natalee Waters Kevin L. Dick Karen Chenault Sunny Ogburn Lynn Williams Hunter Bendall

CONTACT: EDITORIAL: (540) 520-2399 ADVERTISING: (540) 597-2499 210 S. Jefferson St., Roanoke, VA 24011-1702 We welcome your feedback. Email Letters to the Editor to Tim Thornton at tthornton@roanoke-business.com VIRGINIA BUSINESS PUBLICATIONS LLC A portfolio company of Virginia Capital Partners LLC Frederick L. Russell Jr.,, chairman

on the cover Sunset on Smith Mountain Lake Photo courtesy Smith Mountain Lake Regional Chamber of Commerce

COVER STORY

Smith Mountain Lake

50 years of

The lake and dam generate electricity and economic prosperity by Kathie Dickenson

Farms and rural communities were flooded to create a 20,600-acre lake with 500 miles of shoreline.

JULY 2014

Photo courtesy Smith Mountain Lake Regional Chamber of Commerce

t 5:03 a.m. on March 7, 1966, more than two years after the dam was completed, Smith Mountain Lake first reached its full elevation of 795 feet. That moment was the culmination of planning, persuasion and collaboration that began nearly 40 years before in the 1920s. During the decades between the birth of the idea and the reality, a power company supporting the plan went bust and another power company that originally opposed it ended up building Smith Mountain Dam. As a result, communities and farms became lake bottom, the natural flow of the Roanoke and Blackwater rivers was interrupted and a new focal point for recreation and development was created.

Today, luxury homes, condos and businesses sit alongside 500 miles of shoreline surrounding 20,600 surface acres of water. For years, small houses, campgrounds and fishing shacks dotted the shoreline. But residential development took off in the late 1980s, followed by business, entertainment and service development. Average residency at the lake includes 20,000-21,000 households. The Smith Mountain Lake Regional Chamber of Commerce comprises 700 businesses in Franklin, Bedford and Pittsylvania counties, many of them at the lake. Vicki Gardner, chamber executive director, calls Smith Mountain Lake one of the prime recreational resources in Virginia. Referring to a recent survey asking North Carolina residents what they know about this region, she reports that “Smith Mountain Lake was on the list. Five years ago it wouldn’t have. In another five years the growth will be remarkable.” Data compiled for Appalachian Power’s 2009 application for a license to operate the Smith Mountain Project for another 30 years indicate the project has contributed 3,255 jobs, accounting for more

than $90 million in annual income earnings over a four-county area (Bedford, Franklin, Pittsylvania and Campbell); in 2008, the lake had a net fiscal annual impact on the four counties of about $13 million. The Smith Mountain Project is a two-dam pumped storage facility that both produces and conserves energy. Smith Mountain’s partner dam, some 17 miles downriver at Leesville, was completed in 1963. Together they generate nearly 500,000 megawatt hours per year, supplementing the grid during peak use times. When power needs are high, water from the upper reservoir – Smith Mountain Lake – is released through the dam’s five generating units, producing up to 586 megawatts. Water released through Leesville’s two generating units produces up to 50 megawatts. The dams primarily supplement coal power, but Frank Simms, manager of hydro operations for American Electric Power, Appalachian’s parent company, adds that as more renewable power sources, such as wind, come into the system, the Smith Mountain Project will supplement the grid when, ROANOKE BUSINESS

cover story use and, because restarting a coal plant is costly, saves money. Pumping water back and forth also gives this manmade lake a characteristic attractive to recreational and sport users: the water level fluctuates no more than about two feet. Among other things, this means boats can always be expected to meet their docks. Leesville Lake’s water level, in contrast, fluctuates up to 13 feet.

Building a dam

The land clearing operation near Hales Ford Bridge in May 1964

for example, the wind is still. “When more generation is needed, we are available within 10 minutes to bring the [hydro] units up and provide generation,” he explains. When energy needs drop, instead of temporarily shutting down

coal plants, Appalachian uses excess coal-fired power to reverse the dam system and pump water back upriver from Leesville to Smith Mountain Lake, where it stands ready for the next spike in need. The process puts coal energy overages to good

Smith Mountain Lake and Dam in April 1965

JULY 2014

At least as early as 1924 the narrow gap carved by the Roanoke River into the 1,000-foot-high Smith Mountain was identified as an excellent hydropower site. That year the Roanoke-Staunton River Power Co. formed and purchased 6,500 acres in Bedford and Pittsylvania counties. Studies that followed, however, concluded a dam would not be economically feasible. The history of the existing dam begins in 1944, when the U.S. Army Corps of Engineers began a flood control study that recommended a series of dams in the Roanoke River Basin. The basin includes more than 400 miles of rivers beginning in Virginia’s Blue Ridge Mountains and emptying into North Carolina’s Albemarle Sound. In Bolling Lambeth’s “History of Smith Mountain Lake,” he tells of a 1945 meeting in South Hill at which the Corps of Engineers presented plans for 11 dams “for flood control, recreation use, hydro development and the abatement of pollution.” Representatives of Norfolk and Western Railway expressed opposition “on the basis that hydroelectric power development competed severely” with coal-fired power generation and that “coal industry generation was closely related to the profit” of N&W. Representatives of Appalachian Electric Power Co. also opposed the plan as “inadvisable.” Lambeth, a member of the Bedford County Board of Supervisors, and others who supported the gov-

Photo by Warren Gilbert Photography/Courtesy of Appalachian Power

cover story ernment’s plan formed the bi-state Roanoke River Basin Association, of which Lambeth was the first president. He writes of the association’s persistent efforts with local, state and federal government officials to maintain interest, promote studies and push for funding. Despite the initial opposition from Appalachian Power, information provided by AEP’s Simms states that in 1954 Appalachian purchased land and rights for the Smith Mountain Dam site when Roanoke-Staunton River Power Co. liquidated. Two years later Appalachian filed for a preliminary permit from the Federal Power Commission (FPC) to build a 60-megawatt facility, including a 200-foot-high dam. Studies during the design phase resulted in the construction of the existing pumped storage facility including two dams, two powerhouses and two reservoirs. Once Appalachian received the FPC permit, the basin association worked with company officials to develop public access. The company donated more than 1,725 acres for parks and other access. In 2007 Appalachian placed about 5,200 acres on Smith Mountain into a conservation easement. All told, Appalachian spent $66 million to build the Smith Mountain Project. Peak construction employment reached 400. Those workers excavated 300,000 cubic yards of dirt and rocks from Smith Mountain, built a concrete plant at both dam sites and poured 275,000 cubic yards of concrete into the dams. The resulting Smith Mountain Dam is a double curvature concrete arch, 816 feet long and 235 feet high. The concrete gravity dam at Leesville is 980 feet long and 90 feet high. As part of the project, Appalachian constructed six bridges and 22 miles of new or improved roads. The company found and relocated 1,361 graves from 75 cemeteries in the two reservoir sites. Appalachian’s permit included

rights to use land up to an 800-foot elevation, five feet above the lake’s maximum level. Some landowners, most of them farmers, sold property to the company, and others retained ownership, even though part of their property would soon be under water. When development along the shoreline began, many of the latter profited by selling lakefront lots to developers or individual buyers.

Developing the lake Before the water came into the cove at what is now Saunders Point subdivision, Elsie Tanner and her late husband, Fred, of Roanoke, built a house there. James R. Saunders, her husband’s nephew, had sold them the lot from his family farm. At that time, says Tanner, “people built modest homes” at the lake. Theirs was a three-bedroom con-

ROANOKE BUSINESS

cover story

A temporary bridge that was part of the construction project in 1960.

crete-block house with a screened front porch. Tanner’s husband called it “his Heaven on Earth,” she recalls. “He loved the water. Our children ended up loving the water. I ended up liking the water,” she laughs. Dale Whiteis moved to the lake in the early 1980s from Northern Virginia, where he had retired from the government and worked as a realtor. Once settled at Smith Mountain, he joined Shoreline Realty and worked there for 16 years. 10

JULY 2014

Serving on the board of Smith Mountain Lake Association and as chairman of the Smith Mountain Lake Policy Advisory Board, he witnessed key moments in the lake’s development. Retired Air Force Colonel Leo Bourassa, Whiteis recalls, ran the SML Association “as if it were a military organization.” During a dispute with the city of Roanoke over treatment of sewage discharged into the Roanoke River, Whiteis says, Bourassa took jugs

of lake water to a hearing with the Virginia Health Department. With paper cups he offered drinks to Roanoke officials. “They had been saying the water was clean enough to drink,” says Whiteis, “and not one of them would take a sip. So they spent some more money on the sewage treatment plant to clean up the water.” Whiteis recalls that zoning “was a dirty word in Bedford and Franklin County.” When zoning first came to Bedford County, “the name changed to Land Use Guidance System; the word zoning was never uttered in public.” In Franklin County, he says, when zoning came up with the Board of Supervisors “there was mayhem. They had to close the meeting and postpone the vote.” Out of curiosity Whiteis, a Bedford County resident, attended the next meeting, held in a packed high school auditorium. He describes state police and local officers patrolling the venue, television cameras set up throughout the auditorium, and the sheriff standing on stage with his jacket pulled back to reveal a pistol on each side. The board opened the meeting, held one vote and passed zoning, although for only a few districts, those at the lake. Problems for which “guidance” was needed included landowners at higher elevations clearing their property, resulting in mudslides onto lower property and into the lake; a developer building a series of docks across a creek, blocking off residents behind it; and land buyers whose intentions were questionable. Whiteis says he and his colleagues at Shoreline Reality kept a file called “Scoundrels and Conmen of Smith Mountain Lake.” As realtors, “one of the things we had to be aware of was that if you sold someone a property, you were going to see them on an almost daily or weekly basis at the Shop-Rite Grocery Store.” If you sold a couple acres to a fly-by-night

Photo by Warren Gilbert Photography/Courtesy of Appalachian Power

cover story campground developer, “you’d better be up front with anyone interested in buying the lot next door.”

A December 1963 view of work on a spiral case, part of Smith Mountain Lake’s generating unit number fi ve.

The good and the bad Although the Smith Mountain Project was built when most people thought of dams and hydro power as “good,” says John Little, a professor in Virginia Tech’s Environmental and Water Resources Engineering program, dams are now widely recognized for potential negative effects on rivers. For example, fish are blocked from swimming up and down river; sediment can settle out of the water and build up along the bottom; algae grow on the lake’s surface, then die and settle to the bottom, where they decompose and deplete the water of oxygen. Yet dams also offer benefits, says Little. They can provide flood protection, free energy for high peak periods, and recreation and fishing. When considering wheth-

er to build or keep a dam, he believes “the right engineering way is to weigh the pros and cons.” The Smith Mountain Project was not designed for flood con-

trol but for power generation, says Simms, but it does provide some flood prevention. Appalachian works with the National Weather Service to anticipate storm events

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Photo by Warren Gilbert Photography/Courtesy of Appalachian Power

ROANOKE BUSINESS

cover story “and there are things that we do to try to shave that peak of flow from affecting downstream.” Appalachian Power’s original 50-year license from the FPC expired March 31, 2010. As part of its application to the Federal Energy Regulatory Commission (FERC) for a new 30-year license, which took effect April 1, 2010, Appalachian developed a Shoreline Management Plan in collaboration with a steering committee including representatives of the counties, lake community associations, business associations, Chamber of Commerce and the Virginia Departments of Health, Conservation and Recreation, Environmental Quality, Game and Inland fisheries, and Historic Resources. FERC approved an updated and modified plan in January of this year. It also approved Appalachian’s plans for debris and aquatic vegetation. There is a “misperception,” says Simms, “that we don’t listen to the communities and different groups, what their goals and objectives are and how they want to see Smith Mountain continue to flourish. And we do. What people need to understand is that we have to look at the long-term picture. We have to protect the environment and the water quality. If we don’t take care of it appropriately, we are potentially losing a very important resource to the area. “We want it to be successful, not just as a generating facility, but we also want it to be successful as fitting into the area and providing enjoyment and a good living environment into the future.” What people enjoy at the lake are plenty of water and land activities. There’s swimming, sailing, canoeing, kayaking, paddle boating, motorboating, water skiing, jet skiing and fishing. Land lovers can camp and hike and golf on five championship level golf courses. The lake hosts competitions – tri12

JULY 2014

A view of a switchyard area in August 1960

athlons, golf tournaments, yacht races and elite bass fishing tournaments – and community events like Fourth of July fireworks and a December Flotilla for Toys Parade of Lights. At least 10 marinas and about a half dozen public boat ramps provide access to the water. People can rent boats and equipment and hire guides for help catching gamefish. Outside the immediate lake area people visit art galleries and historical sites, such as the Booker T. Washington Memorial in Franklin County and the National DDay Memorial in Bedford County. There are plenty of local farms to

visit for buying goods and for touring, including several alpaca farms and Franklin County’s Homestead Dairy. The lake, once promoted as “The Jewel of the Blue Ridge Mountains,” is still a jewel in the eyes of the Chamber’s Gardner. She says quality of life, constancy of the lake level, beauty of the mountains and a region that has “retained its rural cultural aspects”…attract people from all ages, walks of life and geographical origins to live and vacation there. Gardner, who moved to the lake 27 years ago, declares, “I wouldn’t live anywhere else.”

Photo by Warren Gilbert Photography/Courtesy of Appalachian Power

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BANKING AND FINANCE

Subprime again? Borrowers with low credit scores can get loans, but bankers say itâ&#x20AC;&#x2122;s different this time.

JULY 2014

Photo by Natalee Waters

by Sandra Brown Kelly

on’t say “subprime” when discussing mortgages. Lenders are back doing business with buyers who have lower credit scores, but with a twist. No one is returning to “subprime” lending the way it was done before a meltdown in the housing market that followed the recession in 2008. “No one wants to be associated with that term,” said one banker, who asked for anonymity to avoid association with the s-word. With the housing market still lagging, lenders are seeking ways to make homeownership available to more people and still make money for lenders. The trend started earlier this year when Wells Fargo, the nation’s largest home lender, cut its minimum credit score for Fannie Mae- and Freddie Mac-backed loans from 640 to 620. It then announced it would consider borrowers with scores as low as 600 for Federal Housing Authority (FHA)-insured loans. Credit scores in the U.S. range from 300 to 850, based on the Fair Isaac Corp. (FICO) system. During the booming mortgage climate before the

Great Recession began in late 2007, many loans went to borrowers with scores below 660, which regulators consider “subprime” and risky. Those loans often were not well documented, analysts point out. When the market soured and foreclosures rose rapidly, lenders were forced to raise credit standards. Today’s market is different. Tougher federal regulations mean banks that document loans carefully have less risk. Mortgages made after Jan. 10 of this year had to comply with the qualified mortgage (QM) rule. Under this rule, the borrower’s income, assets and employment must be fully documented, no more than 3 percent can be charged for points and fees, and debt-to-income ratio cannot exceed 43 percent. “A borrower’s financial picture must indicate if he or she can pay the loan,” says Veronica Clemons, assistant vice president of Consumer Lending Communications at Wells Fargo in Charlotte. Wells Fargo accepts applications with credit scores as low as 600 and also is making it easier for borrowers to use gifts from relatives as part of a down payment.

The Wells Fargo building in downtown Roanoke. Wells Fargo, the nation’s largest home lender, cut its minimum credit score for home loans earlier this year.

ROANOKE BUSINESS

banking and finance “Just because you achieve that credit score doesn’t mean you get a loan,” Clemons emphasizes. Lenders are cautious because they are familiar with the fallout of bad loans. Wells Fargo’s new mortgage business in the first quarter was its lowest in a decade. The company cut about 6,000 jobs last year in its mortgage business and announced more cuts of nearly 1,000 in January and February. No bank was hit harder, however,

than Bank of America, the nation’s second largest bank. The 2008 acquisition of Countrywide Financial exposed BofA to a mass cache of subprime loans that Countrywide sold to Fannie Mae and Freddie Mac. This exposure resulted in a loss of jobs at BofA and a fine from a federal agency. In 2013 alone, the bank eliminated 1,500 jobs related to mortgages and closed facilities in three states. In March, the Charlotte-based bank said it will pay

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some $6.3 billion to Fannie Mae and Freddie Mac as part of a settlement with the Federal Housing Finance Agency (FHFA) to end lawsuits involving falsely represented loans. Bank of America officials would not say specifically that BofA has resumed accepting borrowers with lower scores, but they did say it has dipped into that market. “There may be cases where we would originate a purchase loan with a credit score in the lower 600 range, in accordance with FHA guidelines and if there were other factors (e.g., lower debt-to-income ratio, more funds in reserve, etc.) that demonstrate the customer’s ability to repay the loan,” wrote corporate spokesperson Kris Yamamoto in an email response. “We continually monitor our loan performance and balance our lending approach to address customer needs while promoting responsible and sustainable homeownership. “We are working within the FHA score guidelines because we sell our loans on the secondary market,” she added. “Most of our focus now is on educating the first-time buyer.” BofA includes a “Learn” tab on its main website that includes videos and other information about managing money, living on one income and dealing with financial problems. The site also has a link to the BetterMoneyHabits.com website, which BofA offers through a partnership with Khan Academy, a nonprofit online learning site founded by former hedge-fund manager Sal Khan. A mortgage section includes a discussion of buying vs. renting. The online education project has been evolving for about a year, according to Joe Velazquez, a BofA senior vice president and business development manager who oversees the region that includes the Roanoke Valley. Besides education, Velazquez says, the bank encourages loan officers to be “out in the market talking to realtors to make them aware” of what Bank of America has to

banking and finance offer. Loan officers can take classes leading to a neighborhood lending certification; five in the Roanoke area are certified. The classes â&#x20AC;&#x153;are designed to coach and train the officer to understand how to work in communities and neighborhoods â&#x20AC;Ś including in multicultural markets,â&#x20AC;? Velazquez says. While the focus is on education, educating prospective buyers can be good for business. â&#x20AC;&#x153;At the end of the day, we have our eye on the dotted line â&#x20AC;Ś and sound lending practices,â&#x20AC;? he says. A healthy housing market is integral to a strong economic recovery. As Moodyâ&#x20AC;&#x2122;s Analytics and the Urban Institute noted in a September 2013 report, tight lending was depressing demand and holding back not just the housing market, but â&#x20AC;&#x153;also the broader economic recovery.â&#x20AC;? The report said credit scores had been tightened beyond the levels prior to the housing bubble. The average credit score for home purchase loans in 2013 was more than 750. That was 50 points higher than the average credit score, and 50 points higher than a decade ago. â&#x20AC;&#x153;To understand where we are, you have to recognize where we were,â&#x20AC;? says Steve Reeves, senior vice president and manager of mortgage lending at Valley Bank in Roanoke. When home prices were rising, generally more than incomes, lenders were pressured to find â&#x20AC;&#x153;innovativeâ&#x20AC;? ways to keep the market going, he says. Homeowners who found themselves overextended could just sell. Then the market fell apart. Under the guidelines of the new Consumer Finance Protection Agency, lenders donâ&#x20AC;&#x2122;t have â&#x20AC;&#x153;quite as much creativity, but there are still good mortgage products.â&#x20AC;? Consumers can still get Veterans Administration (VA) loans at 100 percent financing. The USDA program for rural areas also has 100 percent financing. The FHA loan with 3 percent down still exists, Reeves says. The FHA credit score that Valley Photo by Natalee Waters

â&#x20AC;&#x153;To understand where we are, you have to recognize where we were,â&#x20AC;? says Steve Reeves, senior vice president and manager of mortgage lending at Valley Bank.

Bank and other lenders are working within is â&#x20AC;&#x153;not set in stone, but is generally between 620 and 640, and if you are in that range, youâ&#x20AC;&#x2122;ve had some credit issues. A buyer does

not have to have perfect credit, but we have to verify everything in it,â&#x20AC;? says Reeves, who has 28 years in the mortgage business. â&#x20AC;&#x153;The recovery is going to take awhile.â&#x20AC;?

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ROANOKE BUSINESS

RISK MANAGEMENT

Randy Layman, director of risk management services at Chas. Lunsford Sons & Associates in Roanoke, says global companies are factoring climate change into their business plans.

JULY 2014

Photo by Natalee Waters

Climate change It’s adding a new element of risk for people, governments and businesses. by Joan Tupponce

athan Kerr was surprised at the low turnout for a recent breakout session on climate change at an annual conference sponsored by the Risk Management Society. Out of the conference’s thousands of attendees only about 30 sat in on the session. “People are saying this is a big deal and that we have to look at it,” says Kerr, branch manager for the Roanoke office of Scott Insurance. The insurance industry knows about climate change, but the “majority of insurance companies domestically are not addressing this publicly,” adds Kerr. “No carrier that comes in our office says a word about climate change. It’s not on their radar.”

Climate change is top of mind, however, for President Obama, who launched his Climate Action Plan in June and recently helped unveil the newest National Climate Assessment. The report, which looks at the impacts of climate change on the economy, emphasizes the fact that extreme weather is becoming a new norm for the country and for Virginia. Statistics tell the story. The average U.S. temperature has increased more than half a degree since 1895, and it’s projected to rise another two to four degrees “over the next few decades.” 2012 was the second most extreme year on record for the nation, producing record heat, droughts, wildfires and floods as well as the June derecho that rolled in and caused havoc in

ROANOKE BUSINESS

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Nathan Kerr, branch manager for the Roanoke office of Scott Insurance. says Superstorm Sandy “rocked the insurance industry’s world.”

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the Roanoke Valley and across the state. The team of more than 300 experts that prepared the National Climate Assessment believe climate change is a problem “largely because our society and its infrastructure were designed for the climate that we have had, not the rapidly changing climate we now have and can expect in the future.” Climate change is a potentially serious financial threat not only to the insurance industry but also to businesses. Virginia Beach, for example, is among the American cities most at risk from sea level rise. “Superstorm Sandy [which cost the economy an estimated $65 billion] was a game changer, ” Kerr says. “Where it hit and how it hit. It was a very unexpected event, and it rocked the insurance industry’s world.” Businesses across the state need to look at “where they are vulnerable and try to lessen or eliminate their risk,” says Randy Layman, director of risk management services at Chas. Lunsford Sons & Associates in Roanoke. “Last year was one of the calmest years with regard to hurricanes, but this year has already started out with tornadoes and very damaging windstorms that are attributed to climate change.” The performance of the infrastructure built for the old climate has spawned at least one lawsuit, and it could be the beginning of a trend. Farmers Insurance is suing Chicago and its suburbs because sewers backed up into hundreds of homes — some of them apparently owned by Farmers policyholders — during a two-day rainstorm last spring. The company wants the local governments that built and maintain those sewers to pay for the damage. It has taken what it believes to be a necessary action “to recover payments made on behalf of our customers for damages caused by what we believe to be a Photo by Natalee Waters

JULY 2014

risk management completely preventable issue, as well as to prevent it from happening again,” says company spokesperson Luis Sahagun, adding that “water districts and other storm water stakeholders are insured for this very type of loss” and the insurance company is “not seeking public funds.” Virginia’s farmers are extremely vulnerable to bad weather. One of Layman’s farm clients lost 80 percent of his strawberries because of cold, wet weather this year. “If his income is affected and we provide crop insurance, that is another risk we have to prepare him for,” he says. “A change in weather for a farm can be devastating.” Global companies have had climate change on their radar for several years because it can and does affect supply chains. Some major U.S. companies assessing their risks and looking at ways to mitigate them include Starbucks, Unilever, Levi Strauss & Co. and Mars Inc. Many of these companies not only rely on labor and raw materials from areas susceptible to extreme weather but many also have facilities in those areas. “What I see is that global companies are looking at this, especially with properties on the coast,” Kerr says. If a major weather event causes a breakdown in a company’s supply chain, business can be interrupted for months, affecting sales and revenue. Layman works with furniture manufacturers that import materials and parts from suppliers around the world. “Areas such as Singapore, Hong Kong, Indonesia and India are all prone to sea level rise and issues like that,” he says. “Companies that have to stay in operation have to look at what they are going to do to protect themselves.” Businesses need to have alternative sources for materials and goods that are crucial to the company’s financial wellbeing. Finding those alternatives isn’t always easy. “Even if you can find an alternative, it often increases your cost of

the raw materials,” Layman says. “It’s idealistic to think that businesses don’t face risks, and that it’s something other people have to think about.” Information that businesses can use to look at their risk is forthcoming. Companies such as Risk Management Solutions, a leading catastrophe risk management firm, are looking to provide high-quality data on climate change risk to business leaders who face economic risks associated with a changing climate. Actuaries who evaluate the monetary consequences of risk also are starting to take note of the increased storm patterns and rising sea levels. Traditionally, they have relied on historical data to compile their assessments but now they are looking at potential riskrelated events that may result from extreme weather. And higher risk factors could result in higher premiums.

“Anybody that is providing insurance protection has a certain appetite for certain types of business and certain risks. If they perceive that those risks are increasing, they will stop accepting them or increase the cost to cover additional risks,” says Layman. Some insurers and reinsurers are beginning to promote new products and policies that will help reduce carbon pollution, the biggest cause of climate change. Others, according to a 2012 report from Ceres, which directs the Investor Network on Climate Risk, are focused on building stronger resiliency to climate impacts, especially sea level rise, stronger storms and extreme precipitation events. “People think this is so far out because they are used to looking at one-year increments with insurance but they have to look long-term when it comes to climate change,” Kerr says. “Businesses have to think about how to get their arms around it.”

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RETIREMENT

Life after work

What does a reasonable retirement savings plan look like? by Sue Lindsey

T Ed Heath, a manager at Medi Home Care, will retire this month. Heath took saving for retirement seriously. He plans to spend a few days a week golfing at Blue Hills Golf Club in Roanoke.

hroughout a long career supplying home medical equipment, Ed Heath has encountered elderly people living with few resources. He didn’t want to end up that way. “I wanted to be in a better situation,” says Heath as he prepares to retire as a manager at Medi Home Care. As a result, Heath, who turns 65 this year, took saving for retirement seriously. “I didn’t wait until the last minute,” says the Roanoke resident. “I probably started [saving] in my 30s.” Heath, who worked for Carilion Clinic for 15 years, says he saved the maximum in a 401(k) plan for 10 to 12 of those years. Heath’s approach is unusual, according to Carl Grove, a financial adviser with Edward Jones in Roanoke. “Most folks begin to think about it seriously once they’re in their 50s,” Grove says. “They have other responsibilities,” such as raising children. The analogy of a three-legged stool has been the standard advice for retirement planning: An individual should have income from Social Security, a pension and personal savings. However, Grove points out that many companies no longer offer pensions, which means individual savings have ROANOKE BUSINESS

retirement The traditional three-legged stool of retirement savings is not as dependable as it used to be.

to be greater to make up for that amount. This year’s annual survey by the nonprofit Employee Benefit Research Institute in Washington, D.C., found that 18 percent of workers felt very confident they would have enough money to re-

tire comfortably, while 37 percent felt somewhat confident. However, worker savings remained low, the institute found. The amount of money a person will need in retirement varies, according to financial advisers. It depends on whether a retiree

wants a quiet life at home or plans to do extensive traveling, buy a vacation home or leave money to heirs. “Most folks within the financial world will tell you you should have about 85 percent of your preretirement income in retirement,” Grove says. Generally, a retiree should be able to make his savings last to the end of life by withdrawing 4 percent to 5 percent a year, he says. Someone who wanted $25,000 a year in income to add to a Social Security benefit and pension would need to have $500,000 in retirement savings, Grove said. Personal savings plans for retirement take several forms. 401(k) plans are employer-sponsored savings plans that offer workers several advantages. Contributions reduce taxable income, plus savings are not taxed until withdrawn. In addition, employers often match a percentage of the savings. The maximum contribution currently is $17,500 a

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retirement year, although workers 50 and older can save an additional $5,500. A worker should save at least as much in a 401(k) plan as an employer will match, Grove says, and consider other investments as well. Individual Retirement Accounts are offered by many financial institutions and are set up as personal accounts. IRAs offer the same tax advantages as 401(k) plans, in that they can reduce taxable income and savings are not taxed until withdrawn. Withdrawals from either a 401(k) account or an IRA before age 59½ may be subject to an additional 10 percent tax. Roth IRAs are also set up by individuals, but contributions are taxed up front. Contributions of $5,500 a year ($6,500 for those 50 and older) are allowed to IRAs and Roth IRAs without restrictions on the tax deduction if an individual has no employer-sponsored retirement plan. “You would choose a traditional IRA if you want to pay less taxes in the present,” Grove says. “Pick Roth if you want less taxes in the future.” Someone earning a large salary might consider a traditional IRA, he said, while a Roth IRA may be of more benefit to middle-income earners. A Roth IRA can be a useful savings tool for other needs as well, according to Valley Wealth Management, a division of Valley Bank. Participants in an April workshop were told they could withdraw their contributions to a Roth after five years without penalty. The interest on those contributions could then continue to grow for retirement. Treasure Staples, a teacher at Glen Cove Elementary School in Roanoke County, contributes to a retirement plan through her job but thought a Roth IRA sounded like a good idea. “I have two kids, and I need to save for college,” says Staples, 33. MyRA is a new retirement savPhoto by Natalee Waters

Carl Grove, a financial advisor with Edward Jones, says most people are in their 50s before they get serious about saving for retirement.

ings plan for workers who don’t have access to an employer-sponsored plan. It will be available by the end of the year for workers whose employers choose to participate. President Obama announced in his State of the Union address this year that he was directing the Treasury Department to create the plan. A MyRA can be set up with a payment of $25, and contributions of as little as $5 can be made through payroll deductions. Contributions are invested in a Treasury security, and the principal is protected, according to a White House fact sheet. Workers can keep the same account when they change jobs, and contributions can be withdrawn tax-free at any time. Participants can save up to $15,000, or have their account for 30 years, before transferring their balance to a private-sector Roth IRA. Annuities are another way to save. They are set up with premiums to insurance companies and can offer a fixed payment in re-

tirement. Contributions aren’t deductible, but earnings grow tax-deferred. According to Valley Wealth Management, taxes are paid on the portion of withdrawals that represent earnings at ordinary income tax rates. Retirement savings options available to governmental entities and tax-exempt organizations include the 403(b) plan and 457 deferred compensation plan, according to the Internal Revenue Service website. Similar to 401(k) plans, their contributions and earnings are tax-deferred. SEP IRAs are also available to the self-employed and allow larger contributions than regular IRAs. Heath counts himself lucky to have a pension from Carilion as well as Social Security and his savings for retirement. His wife, a state employee, will work for several more years. “I won’t be traveling around the world or anything,” he adds, but Heath takes comfort in feeling that’s he’s fairly well prepared financially. ROANOKE BUSINESS

COMMUNITY PROFILE | ROANOKE

City renaissance ‘Roanoke is on fire right now.’ by Beth Jones

C 26

andidates for Roanoke’s City Council largely turned the May 6 election into a referendum over downtown development. JULY 2014

At issue: the $7.9 million makeover of the City Market Building that reopened in 2011, the recent $1.1 million spent to create a pedestrian plaza at Market Square

and the $7 million spent for 2013 upgrades to Elmwood, including a 5,800-square-foot amphitheater. To celebrate the new space, Elmwood is hosting Sheryl Crow Photo by Natalee Waters

This year’s Local Colors festival was held in Elmwood Park, and the crowd watched performers in the new 5,800-square-foot amphitheater.

for a sold-out July 31 concert. During the campaign, Republican candidates Jim Garrett, Roger Malouf and Hank Benson posted to their Facebook a picture of the Grammy-winning pop star next to a chart showing the rise in Star City students who qualify for free lunches. The ad told voters “we finally have a chance to give a voice to every citizen of Roanoke, not just those who live, work and play downtown.” City Council incumbents Bill Bestpitch, Ray Ferris and David Trinkle, for their part, rejected the suggestion that their decisions served the city’s elite over the rank and file, and instead

maintained development downtown is critical to the economic health and quality of life of the entire valley. Bestpitch, Ferris and Trinkle kept their seats. The notion the government completed downtown projects at the expense of Roanoke’s neighborhoods simply isn’t accurate, according to City Manager Chris Morrill. “A lot of that is perception,” he says. “The downtown projects, while highly visible, are a small portion, less than 20 percent, of our capital budget.” Those public projects, Morrill believes, have drawn and will continue to spur private invest-

ment in the city. “I’m hoping over the next four to six years some of these investments will pay off with an even better quality of life and accelerated economic development,” he says. “I think we’re poised for that.” Roanoke lawyer Ed Walker has stood at the helm of a number of the city’s most dramatic recent real estate developments — so many that a 2012 New York Times profile described the developer as being “on a mission to save his town.” Walker’s list of accomplishments is long: revitalizing Kirk Avenue downtown, complete with a night-life-improving music hall, turning an old ice house ROANOKE BUSINESS

community profile One goal of the 22-acre project called The Bridges is to expand downtown to South Jefferson Street and the Virginia Tech Carilion School of Medicine and Research Institute.

on the Roanoke River into a modern apartment building, restaurant and a climbing gym, and completing a $20 million renovation of the formerly glamorous Patrick Henry Hotel into apartments. “He kind of showed how the model of investing in the community using historic tax credits and creating these beautiful spaces can really help in community building,” Morrill says of Walker, who did not respond to a request for an interview. Another Roanoke riverside development dubbed The Bridges follows a similar model of creating new spaces while holding on to the beauty of historic buildings. The 22-acre project will expand downtown to South Jefferson Street and the Virginia Tech Carilion School of Medicine and Research Institute. Construction is in full swing on a 157-unit apartment building, as well as on the restaurant and coffee shop planned for a neigh28

JULY 2014

boring historic building that once served a lumberyard. Another early development of The Bridges will be office space. Richmond-based WVS Cos., which is developing the site, is in final negotiations to fill one building with an international company looking to consolidate 90 high-paying jobs, according to project manager Aaron Ewert. “I think The Bridges is pretty symbolic of the renaissance of the city,” adds Wayne Bowers, director of economic development for the city. “We’re a big project,” says Ewert, son of former Roanoke City Manager Bern Ewert. “We’re the biggest project in town right now, probably in the region, which is cool. But we’re not the only cool thing going on. Roanoke is on fire right now.” Another symbol of that renaissance? The Hampton Inn & Suites slated for construction atop the

city’s Market Garage. It’s scheduled to open in June 2015. “It’s been a long time since we had a hotel built in downtown Roanoke,” says Bowers. “I think if you look at the great destinations around the country that are doing well from a convention center/ tourism standpoint, you’ll see they have several downtown hotels. So it’s kind of a start. I think we’ll see more hotels downtown in the future.”

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The Virginia Employment Commission lists Roanoke’s largest industry as “health care and social assistance” (19.8 percent of all employees) with Carilion Roanoke Memorial Hospital as the city’s big employer. Retail follows with 12.1 percent of the city’s jobs, and accommodation and food services comes in third with 9.6 percent. Photo by Natalee Waters

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community profile

Hunter Flick (clockwise, from center, facing camera), Luis Vallesteros, Ben Corbett and Nathan Foust eat lunch at the Wasena City Tap Room and Grill.

Roanoke’s local economy is fairly diverse, says Morrill. “Our biggest sector is health care, which is a good one to be in,” he says. “We’re not dependent on any one industry, like we were. I think our challenge is: How do we continue to create the environment for the new economy, which will be based on technology and advanced research?” That question is probably why Morrill frequently brings up improving school outcomes. “I would say education is the number one priority,” Morrill says. “Second, I would say is economic development, but we see them going hand in hand.” Roanoke City’s on-time high school graduation rate of 80.3 percent is well below Roanoke County’s rate of 93.8 percent. That said, it’s also well above the city’s 2008 rate of 59.1 percent. “I’m very pleased with some of our progress,” says Dr. Rita Bishop, Roanoke City Public Schools superintendent since 2007. Still, she 30

JULY 2014

Gloria Dominguez buys flowers from Terry Hall of Woods Farms on the pedestrian plaza at Market Square in downtown Roanoke. The recently completed plaza cost $1.1 million.

points out that the current rate basically means that out of every 100 students, 20 aren’t graduating. “The reason the graduation rate is so important is that it does in fact drive crime,” Bishop says. “It drives the economy of the region. It’s just

important for a productive life.” The school system’s improved graduation rate, Bishop feels, is due to her emphasis on “focusing on every single kid.” Credit also is due, she says, to the 2008 opening of Forest Park Academy, an alternative school that offers lots of individual attention to over-age and at-risk students. In the first five years of the school’s existence, 685 students graduated, according to Justin McLeod, the school system’s spokesman. It probably didn’t hurt the graduation rate that Roanoke City Council earmarked a two-year increase in the meals tax — from five cents to seven cents on the dollar — for schools. The tax, dubbed Eat for Education, ran from 2010 to 2012 and ultimately brought $9.5 million to the school’s coffers, according to McLeod. “It kept us funded,” Bishop says. “It kept teachers.” “That really helped give the schools a financial foundation,” agrees Morrill. Photo by Natalee Waters

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INTERVIEW: Jonathan Whitt, executive director, Roanoke-Blacksburg Innovation Network

Building with technology Whitt invites technology sector to ‘row together’ by Tim Thornton

onathan Whitt started 2014 as the executive director of a new organization, the Roanoke-Blacksburg Innovation Network. The Innovation Network grew from the Innovation Blueprint, a plan business, government and education leaders spent 18 months crafting before it was unveiled in July 2012. The Blueprint was intended to lay out a path to economic prosperity built on high-tech jobs and innovation. The Innovation Network is meant to help make that plan a reality. Whitt comes from the Region 2000 Partnership, a Lynchburg-based organization that Innovation Blueprint designers saw as a model. Whitt grew up in Lynchburg and was in at the beginning of Region 2000. “One thing led to another,” he says, “and I did that for 10 years.” At the end of the decade, Whitt began to look for a change. “I wanted to be in a place that had a lot of growth potential for the technology sector,” he says, “and started looking and one thing led to another, and I found out that Roanoke and Blacksburg is that place.” Roanoke Business: How did you come to lead the Innovation Network? Jonathan Whitt: One of the things that I did when we started the tech council [in Lynchburg] was a 10-year strategic plan … The last piece of that puzzle professionally for me was I wanted to be in a community where there was a lot of startup activity, a lot of companies being born and a lot of technology being commercialized and there was a vibrant startup culture. And you know, the way the economy has been in the last few years in the Lynchburg region it was apparent that that wasn’t going to happen anytime soon. So I began to look at some other places … Some-

JULY 2014

Jonathan Whitt, executive director of the Roanoke-Blacksburg Innovation Network

body I knew from Blacksburg said ‘Hey, we’ve just finished doing this strategic plan down here, and I think you need to take a look at it because this really fits with what you’d like to do professionally,’ and sure enough it did. RB: What is the Roanoke Blacksburg Innovation Network?

Whitt: The Innovation Network is a nonprofit organization. It was birthed out of a regional strategic planning undertaking. In 2010 there were a group of people that started meeting – community leaders, business leaders really throughout the Roanoke and Blacksburg region. Those conversations expanded, and it ended up being over Photo by Natalee Waters

100 business and community leaders meeting over a two-year span and they created a document called the Innovation Blueprint. The Innovation Blueprint was a guide that said if we want to grow the region’s innovation and technology sectors, here’s what we have to do. … And so they began to work on these things as volunteers last year and as they began to work through it realized we’re really going to be more productive if we hire someone to turn this plan into an organization charged with accomplishing these objectives. So they did. They hired me, and I got here Jan.1 and have turned this into a nonprofit organization that can be a vehicle to help fund some of this activity as well. RB: The Innovation Network’s website – and the Innovation Blueprint – talk a lot about creating an innovation ecosystem. What is that? Whitt: The folks who went through the process of getting this Innovation Blueprint together identified four things that we need to do collectively across both the Roanoke and New River valleys: entrepreneurial development; industry and educational partnerships; talent development and recruitment; and marketing and awareness … These are the four pillars, you would say, that begin to birth technology startups, higher tech companies. You’re helping the existing companies retain and find talent, so you begin to build what’s called an ecosystem of activity that feeds on itself. RB: How do Region 2000 and Innovation Blueprint compare? What’s different about them? Whitt: [With Region 2000] we had tremendous success building the infrastructure for this kind of activity to occur. However there were – there are – missing elements in the Region 2000 area … That’s where I sort of said, OK, I’m not going to be able to really go much further here myself because I need to be in a community that has that and needs to just know how to pull it together and use it to its maximum benefit. That’s one of the major differences. Roanoke and Blacksburg have that. They have all of the infrastructure plus everything else. It’s just that it hasn’t been well coordinated … A major theme of the Innovation Network is

to get as many of those assets as we can aligned to some degree and start to coordinate some of this activity so we can start to have impact – a much greater impact than if it’s just siloed. I personally think all the ingredients we need to succeed, for the most part, already exist. RB: How do you get these things out of their silos and get them to align? Whitt: One of the big things is the structure of this organization, the Innovation Network, is not some top-down organization where there’s this group of people with lots of money telling everybody else this is how you do it. It’s very much a network-node relationship. I’m trying to work with some of the leading employers in the region, economic development professionals, other nonprofits like the Tech Council or the Chamber of Commerce, the higher-ed institutions – bringing these folks together and having – not just conversations, though conversation’s important – but a call to action. Let’s row together, I guess is what I’m trying to get at. There are the people who will go across the river with you immediately because they get it. There are people who will watch you go and then decide, “Well, OK. It’s safe. We’ll come with you.” And there are the people who will just cling to the rocks and never come. My focus is working with that first two groups of people. It’s working with people who are excited about the potential for the region, who want to work together and people who say “A lot of this has been tried before in a different fashion. Show us how this is a little different and show some success and then we’ll come help you.” I’ve been seeing that. The more I talk with folks, the more meetings we have, the more we start to work on stuff collectively, the more people are getting excited and saying this is working. The other thing is, this isn’t about me or this organization taking credit. It’s about pointing people to the success of what we’re doing collectively. A win in Montgomery County or a win in Roanoke County is a win for everybody. RB: One of the big challenges is convincing people this is different from efforts that have come before. Are you getting past that now?

There’s always that first group that’s going to go with you regardless, but how are you doing with that second group? Whitt: I think it’s going really well. Everybody that I’ve met with understands that the Innovation Network is not a marketing gimmick or a new name for what we’re doing regionally. They understand it is an organization that has a very specific mission focus. It’s not really about the Innovation Network, honestly, being on the forefront of anybody’s list. We really are, I think, a behind-the-scenes organization. If we work well together, we should see growth for everybody who’s participating. If we’re doing our job well, the tech council is going to grow; the Chamber of Commerce is going to grow; the economic development opportunities are going to grow. At the end of the day, that’s the thing that I think keeps people engaged, if they see that we’re not an organization that’s trying to take the credit for everybody else’s success. We’re trying to work together to make success for everybody. Another way of saying this is, this isn’t about taking a slice of pie away from anyone. This is about making the pie bigger and tastier for everyone. So far the message has been well received. With a couple of exceptions, I haven’t really had any pushback. RB: In Lynchburg, you had a 10-year plan for you and the organization. Where do you see the Innovation Network and you 10 years from now? Whitt: I don’t do 10-year plans anymore. I don’t project 10 years anymore because we can’t … There was a time when you could do that. Now we can’t. Really, we’re on a three-year cycle. I’m on a three-year cycle. This organization is going to work on a three-year cycle. We’re saying, here are the high-level outcomes we want to accomplish over the next three years … I’ve been real candid with the stakeholders, people who’ve put money into this. I’ve said, look, if we can’t accomplish these things in three years and really do a good job, then let’s fold it up and go home. I’m not going to ask you to put money into something forever. Let’s prove this model works and let’s work really hard to make sure it does. ROANOKE BUSINESS

SPONSORED S PONSORED P ONSORED C CONTENT ONTENT | R Roanoke oanoke R Regional egional Chamber Chamber of of Commerce Commerce

Member news & recognitions The Commission on English Language Program Accreditation (CEA) has granted accreditation to the English Language Institute’s ESL (English as a Second Language) Program at the Roanoke Valley Campus of American National University. The CEA is recognized by the U.S. secretary of education as a national accrediting agency for English language programs and institutions in the U.S. American National is one of only five schools in Virginia to have won accreditation from the agency out of approximately 25 colleges and universities that offer ESL. B2C Enterprises, an award-winning advertising and marketing firm, celebrated its five-year anniversary in May. B2C Enterprises began as a media consulting firm helping companies with advertising strategies and media placement. Now B2C has expanded its range of services to include complete graphic design, illustration, branding, video production, behavioral marketing and other consulting work. Critzer Elementary School Principal Michael Grim went “Over the Edge for Big Brothers Big Sisters of Southwest Virginia.” Over the Edge is a new event in which participants raise $1,000 for Big Brothers Big Sisters and are able to rappel down 132 feet from the roof of the Patrick Henry building in Roanoke. Grim was scheduled to rappel from the roof on May 31. For more information on the fundraiser, call 540-345-9604. Brown Edwards has announced the hiring of Michael Walton as its new director of business development. Walton will be reWalton sponsible for the development and execution of the accounting firm’s marketing and communications strategies. Bush-Flora Shoes celebrated its 107th

JULY 2014

anniversary with a grand reopening and SAS Shoes trunk show May 3. After nearly 40 years at Towers Shopping Center, Bush-Flora Shoes has expanded its store and completed renovation. The new store is 3,800 square feet. BushFlora Shoes is in its fourth generation of family ownership. The store first opened its doors on May 1, 1907, in downtown Roanoke. D’Ardenne Associates, a leader in ISO management standard services and training, has signed an agreement with Exemplar Snyder Global, an international organization providing certification training. Under the agreement, Susan Snyder, president of D’Ardenne Associates, will be an evaluator for Exemplar. She will evaluate trainers and auditors for international requirements, including AS9100, the international standard for aerospace quality management systems. The staff of Elderderm and Starkey Medical Esthetics celebrated the opening of its second location at 218 W. Main St. in Salem May 16. Starkey Medical Esthetics has an office in Roanoke, which opened in 2003. Michele Meinhart has both an esthetics business and a primary dermatology practice in collaboration with Dr. Brian Buchanan. Hampton Hotels has announced the official opening of its newest property, the 126-room Hampton Inn & Suites Roanoke Airport located at 5033 Valley View Blvd. in Roanoke. The hotel is owned by DSA Roanoke. It is the third Hampton property in the Roanoke area and the 59th in the state. The hotel offers easy access to the Roanoke Blacksburg Airport and the Blue Ridge Parkway. Jefferson College of Health Sciences held its spring 2014 commencement ceremony for the first time in Elmwood

Park’s new amphitheater May 9. Diplomas were awarded to142 Jefferson students. The students graduated from 12 different academic programs. Roanoke City Manager Christopher Morrill was the commencement speaker. Dan Oyler has joined The Renick Group as senior consultant, engineering and IT. In addition to being the primary recruiter for Oyler engineering and IT positions, he also is available to consult with clients regarding compensation issues within their company or the marketplace. Richfield Living has named W. Lee Wilhelm III vice president of corporate development. Wilhelm previously served as Jones senior director of campus development for the organization. Katie Jones has been named administrator for the Joseph C. Thomas Center, an assisted living residence on the Richfield Wilhelm campus. Jones, a licensed nursing home administrator, previously served as assistant administrator for Richfield Recovery & Care Center. The organizers of the 4th Annual Bike Shorts Film Festival have announced the winners of the 2014 juried prize and best music video. RIDE Solutions received 22 videos representing local, national and international filmmakers for the 2014 festival. These films were reviewed by a panel of four judges from the RIDE Solutions service area. The winner of the 2014 juried prize was “Havana Bikes” by Ian Clark, of England, and Diego Vivanco, of Spain. The winner of the best music video was “A Two Wheeled Journey into Sound” by local filmmaker William Sellari. Sellari’s film

also won the audience choice award for the premier screening. The videos are available for public viewing by visiting www.youtube.com/bikeshortsroanoke. NerdWallet, a consumer advocacy website, recently conducted a study to find the fastest-growing cities in Virginia – and Roanoke ranked among the top 15. To compile this ranking, NerdWallet evaluated 42 cities, towns and censusdesignated places and examined population growth, employment growth and income growth. Roanoke experienced a 2.5 percent increase in the working-age population between 2009 and 2012. The Honorable Sherman P. Lea has been appointed to the Virginia Parole Board by Gov. Terry McAuliffe. Lea will serve a four-year term on the five-member board. He is currently in his third term on the Roanoke City Council. The city of Roanoke celebrated National Public Safety Telecommunicators Week April 13-19 to honor the men and women who serve as public safety telecommunicators. The city recognized its dispatchers with a meal and a weeklong celebration of appreciation. In addition, the E-911 Center selected Audra Chambers as Dispatcher of the Year. She received a plaque in recognition of the honor. The center’s dispatchers handle more than 275,000 emergency and nonemergency calls each year, dispatching calls to Roanoke police, fire and EMS personnel. To better inform the public about eventand construction-related street closures, residents can now visit www.roanokeva.gov/streetclosures. The Web page provides detailed information, including maps on street closures across the city. Street closure information will continue to be sent out via MyRoanoke and through social media sites. PARK Roanoke is now accepting credit and debit cards in all its garages with booth attendants. Those garages include Campbell, Church Avenue, Center in the Square, Market, Tower and Gainsboro.

Attendants can accept Visa, MasterCard and Discover for daily, hourly and evening transient parking. Monthly patrons may continue to pay by credit or debit card for their monthly parking fees at the PARK Roanoke office at 117 Church Ave. during normal business hours. Jacob Gruse, who has served as assistant basketball coach at Averett University, will return to coaching high school basketball as the boys basketball head coach for the Cave Spring Knights. Gruse is a former head basketball coach for Dan River High School and South Davidson High School. He holds a degree in education from Concord University. Students at Fort Lewis Elementary School observed Arbor Day in April with student presentations, music, poetry, a visit from Smokey Bear and a ceremonial tree planting. This event will help Roanoke County retain its Tree City USA designation by the Arbor Day Foundation, honoring the county’s commitment to effective urban forest management. Roanoke County has held the title for 16 consecutive years and is currently one of only three counties in Virginia to hold the designation. The Roanoke County Public Schools Education Foundation has awarded the 2014 Golden Apple Award to Dana Hoos, a fifth-grade teacher at Mount Pleasant Elementary School. Each year, teachers from across Roanoke County Public Schools are nominated by students, parents, co-workers and administrators to receive the award. A total of 141 teachers were nominated and 23 were selected as semifinalists. In addition to receiving a $3,000 check, Hoos received the use for one year of a 2014 automobile from First Team Auto Mall. Gov. Terry McAuliffe and the Board of Education recently announced that 212 schools and four school divisions earned 2014 Virginia Index of Performance awards for advanced learning and achievement. Across Virginia, 71 schools earned the Board of Education Excellence Award, including Cave

Spring High School and Hidden Valley Middle School in Roanoke County. Statewide 136 schools received the Board of Education Distinguished Achievement Award, including the following Roanoke County schools: Cave Spring, Clearbrook, Fort Lewis, Oak Grove and Penn Forest elementary schools; Cave Spring and Glenvar middle schools; and Hidden Valley High School. The Roanoke County Public Schools Education Foundation awarded 91 scholarships totaling $68,000 at its annual scholarship awards presentation April 28 at William Byrd High School. Jack Murray has joined the Roanoke Regional Partnership as director of marketing. Murray brings more than five years of meMurray dia experience in print and online publishing, marketing, writing, editing and branding. He will handle communications duties for the partnership as well as Roanoke Outside, including management of digital content, publications, social media and brand strategy. Mason Adams has been named assistant editor for Virginia Tech Magazine. A 1999 graduate of the University of Rhode Island, Adams Adams spent 10 years as a Roanoke Times reporter. He also has written for newspapers in North Carolina, Colorado and California. Marc T. DeBonis has been named to lead a new unit within information technology at Virginia Tech. As director of CollaboraDeBonis tive Computing Solutions, DeBonis will oversee the integration of Microsoft Windows expertise and system administration to provide Virginia Tech with stable, scalable and secure systems, services and solutions. Henri deHahn, provost for the New-

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SPONSORED S PONSORED C CONTENT ONTENT | R Roanoke oanoke Regional Regional C Chamber hamber o off C Commerce ommerce School of Architecture + Design in San Diego, joined Virginia Tech in June as the director of the School of Architecture + Design in deHahn the College of Architecture and Urban Studies. He will provide leadership to the undergraduate and graduate programs within the school, including the departments of architecture, landscape architecture, industrial design and interior design as well as the six research and outreach centers housed within the school. Pascha Gerni has been named director of finance at the Virginia Tech Transportation Institute. In this position, Gerni will manage the Gerni institute’s $45 million annual operating budget. In addition, she will serve as the assistant treasurer of VTT LLC, an organization that oversees the National Tire Research Center ,which is projected to create 35 jobs and manage a $4 million budget in 2014. Rakesh K. Kapania, the Norris and Laura Mitchell professor of aerospace engineering in the Department of Aerospace and Ocean EnKapania gineering in the College of Engineering at Virginia Tech, will receive the Outstanding Aerospace Engineer award by Purdue University’s School of Aeronautics and Astronautics at a ceremony in September. The school has recognized the professional contributions of aeronautics and astronautic engineering alumni since 1999. Kapania, who came to Virginia Tech in 1985, is internationally known for his research expertise of structures and materials. Christopher Kiwus, commanding officer of the Naval Facilities Engineering Command, Southeast, joined Virginia Tech in June as asKiwus sociate vice president and chief facilities officer. Kiwus, a captain in the U.S. Navy, has 30 years of experience as a senior leader, manager 36

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and engineer in charge of Navy facilities planning, engineering, maintenance, construction contracting and support service contracts. A trailblazer in the field of Unmanned Aircraft Systems (UAS) has been chosen to lead one of the six federally approved test sites working Mooney to safely introduce unmanned aircraft into the nation’s skies. Rose Mooney, vice president of the engineering consulting company Archangel Aero LLC, has been named the executive director of the Mid-Atlantic Aviation Partnership. A joint effort of Virginia Tech, Rutgers University and the University of Maryland – with industry and agency members – the partnership operates test sites in three eastern states under the auspices of the Federal Aviation Administration. Yuriko Renardy, Class of 1950 professor of mathematics in the College of Science at Virginia Tech, has been selected as one of 32 new felRenardy lows in the Society for Industrial and Applied Mathematics. Renardy was selected for fellowship for her contributions to fluid dynamics of interfacial instabilities through the mathematical analysis and numerical studies of viscous, viscoelastic and thermal effects. Elizabeth Spiller, the associate dean of the College of Arts and Sciences at Florida State University, has been named dean of the College of Liberal Spiller Arts and Human Sciences at Virginia Tech. She was to begin the new position July 1. Spiller assumed leadership of the college from Joan Hirt, who has been serving as interim dean since January. Robert Sumichrast returned to Virginia Tech as dean of the Pamplin College of Business in July 2013. Since that time, he has launched a number of changes at the business college. He suspended admissions to the full-time MBA program to focus resources on part-time MBA formats

and the highly ranked master of information technology program. He also is investigating the market for an exSumichrast ecutive doctorate program. He was at the Pamplin College of Business for almost 20 years before leaving in 2003 to lead business schools at Louisiana State University and the University of Georgia. Dwight D. Viehland, professor of materials science and engineering in the College of Engineering at Virginia Tech, was recently named the Jack Viehland E. Cowling professor of engineering by the Virginia Tech board of visitors. The professorship was established as part of a bequest by the late John E. “Jack” Cowling, who graduated from Virginia Tech in 1939 with a chemical engineering degree. Virginia Western Community College held a Robotics Invitational Competition on April 8 in honor of the fifth annual National Robotics Week. The techno-evening of robots and fun was sponsored by the Virginia Western School of Science, Technology, Engineering and Mathematics and the Engineering Program. The winners of the competition were: Team Terminator – Chris Mullen, Roanoke city; Michael Reppa – Salem; and Joe Reppa – Salem. The Team R2D2 winners were: Brandon Belz – Botetourt County; Smit Patel - Southwest Roanoke County; Libby Rhodes – Botetourt County; Zoe Smith – Salem; and Connor Zeller – Southeast Roanoke County. Virginia Western Community College students and faculty recently visited NASA Langley Research Center to conduct fieldwork and gain a valuable education experience while supporting NASA’s needs for capturing data. Nine students and three faculty members from Virginia Western, Thomas Nelson Community College and Dabney S. Lancaster Community College participated in the fieldwork.

Technology is hard wired into Virginia Western education. For three years in a row, Virginia Western Community College has been named #1 or #2 in the top 10 digital community colleges in the nation by the Center for Digital Education. That’s one of the reasons Virginia Western Community College is enjoying a growing reputation for hands-on training in science, technology, engineering, mathematics and healthcare (STEM+H). Students get the skills and knowledge that will take them where they want to go, whether it’s upgrading a current job, transferring to a four-year program or transitioning careers with conﬁdence. Looking for an affordable education with a future?

Virginia Western will take you there. .edu

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