FEBRUARY 2016
SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION
February Interview:
SPECIAL REPORT:
Old king coal dethroned The rock that powered Appalachia’s economy is crumbling
Meeting the right people Director of coworking space and conference believes in the power of collaboration Ariel Lev, CoLab director and CityWorks (X)po project manager
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CONTENTS SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION
February 2016
F E AT U R E S SPECIAL REPORT
8
Old king coal dethroned
8
The rock that powered Appalachia’s economy for more than a century is crumbling.
13
by Mason Adams
Rocky Forge Wind Botetourt County may have a 25-turbine wind farm by the end of 2017. by Mason Adams
18
BUSINESS LAW Shifting rules
14
There’s a new willingness to prosecute individuals for corporate wrongdoing. by Joan Tupponce
COMMERCIAL REAL ESTATE What’s ahead in 2016?
18
Predictions vary, but commercial Realtors expect some new construction and more activity in smaller markets.
14
by Donna Alvis-Banks
D 22
E
P
A
R
T
INTERVIEW: Ariel Lev
CoLab director and CityWorks (X)po project manager
M 30
Global awareness Ferrum works at preparing students for life and work in an ever-shrinking world. by Shawna Morrison 2
FEBRUARY 2016
N
T
S
COMMUNITY PROFILE: Franklin County heads into a future with a new music venue and business site.
Director of coworking space and conference believes in the power of collaboration. by Beth JoJack
HIGHER EDUCATION
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Franklin County Harvesting growth
Meeting the right people
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26
by Gene Marrano
35
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FROM THE EDITOR
Where’s the gap?
C
SERVING THE ROANOKE/BLACKSBURG/ NEW RIVER VALLEY REGION
by Tim Thornton
onventional wisdom says there is a skills gap between what employers need and what potential employees know. The usual prescription for closing that skills gap is governmentsubsidized workforce training, focusing on the STEM-H fields (science, technology, engineering, mathematics and health care) – but not necessarily focusing on college degrees. Maurice Jones, Virginia’s secretary of commerce and trade, wrote in The New York Times last March, “In less than a decade, Virginia will need skilled workers for nearly 1.5 million jobs. Fifty to 65 percent of them will be as ‘middle skills’ technicians, with good wages and career progression that require certifications, licenses, apprenticeships or community college certificates.” Contrarians say the gap has more to do with pay, benefits and job security than with skills. A 2013 Boston Consulting Group report concluded, “quite often, the skilled workers are available – just not at the price employers are willing to pay … In other instances, experienced skilled workers with good academic training are available – sometimes in-house – but companies are unwilling to invest the time and money to train these workers to use new technologies or specific machines.” BCG surveyed 100 executives at manufacturing companies with annual sales of at least $1 billion. Thirty-seven percent of those executives surveyed said the availability of skilled workers “was a strong factor in their decisions to move production to the U.S. from another country.” Only 8 percent said they moved manufacturing out of the U.S. to get better access to skilled labor. The report quoted a Washington Post story in which U.S. Siemens Corp. CEO Eric Spiegel said, “There’s still more skilled labor [in the U.S.] than anywhere else in the world.” Nationwide, the lack of wage increases argues against the existence of a skills gap. If skilled workers are so scarce, employers should be paying those workers more. In the Roanoke and New River valleys, the median salary for what the Bureau of Labor Statistics calls healthcare support jobs is less than $12 an hour. The median salary for bartenders is more than $13 an hour. The median salary for manufacturing jobs is a dollar and a penny an hour more than the bartenders’ median. According to a formula devised by MIT’s Department of Urban Studies and Planning, a living wage for a household in this area with two wage-earning adults and two children is about $14.20 an hour – if both adults are earning that. About half of the health-care support occupations and about half of the production occupations in the Roanoke and New River valleys have a median wage MIT would call a living wage. Maybe the naysayers have a point.
4
FEBRUARY 2016
Vol. 5
FEBRUARY 2016
President & Publisher Roanoke Business Editor Contributing Editor Contributing Writers
No. 2
Bernard A. Niemeier Tim Thornton Paula C. Squires Mason Adams Donna Alvis-Banks Beth JoJack Gene Marrano Shawna Morrison Dan Radmacher Joan Tupponce
Art Director Contributing Photographers
Adrienne R. Watson Don Petersen Natalee Waters
Production Manager Circulation Manager Accounting Manager Vice President of Advertising Account Representative
Kevin L. Dick Karen Chenault Ashley Henry Hunter Bendall Lynn Williams
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 Ariel Lev
CoLab director and CityWorks (X)po project manager Photo by Natalee Waters
Out About &
Groundbreaking at the Brandon Oaks LifeCare Community, Roanoke Regional Chamber’s inaugural “State of the Commonwealth” report and Gov. McAuliffe’s press event at CIT’s MACH37 Cyber Accelerator
1
1. Groundbreaking ceremonies were held on the Brandon Oaks LifeCare Community for a new 12-unit cottage-apartment complex on December 3. (left to right): Charles Downs, Jr., Virginia Lutheran Homes; Sam Lionberger, III, Lionberger Construction; Heather Neff, Virginia Lutheran Homes; Chris Morrill, city manager of Roanoke; Joe Hoff, Brandon Oaks; Joyce Waugh, Roanoke Regional Chamber; State Sen. John Edwards; and Pastor Dave Skole, Virginia Lutheran Homes. 2. Dr. James V. Kock (standing) was the keynote speaker at the Roanoke Regional Chamber’s inaugural “State of the Commonwealth” report held on December 9. Koch is the Board of Visitors Professor of Economics and President Emeritus in the Strome College of Business at Old Dominion University. Koch analyzed the past and current Virginia economy and shared his predictions for the future.
2
3. Front: Del. Ken Plum and MACH37 Managing Partner Rick Gordon, Back: State Secretary of Technology Karen Jackson, General Dynamics Vice President Nadia Short, Gov. Terry McAuliffe, CIT CEO Ed Albrigo, Del. Marcus Simon, Del. Vivian Watts and Sen. Janet Howell.
Share photos of your company’s special events with Roanoke Business. Email your candid photos and identifications to Adrienne R. Watson, arwatson@va-business.com.
3
CORRECTIONS In David Weaver’s Legal Elite profile in December’s issue, the domestic and family relations attorney’s daughter-in-law, Rhonada, was listed as his daughter and his son, David, was left off the list of Weaver children. A chart in December’s issue listed the wrong location for Union Bank & Trust’s headquarters. The bank’s holding company, Union Bankshares Corp., is based in Richmond. 6
FEBRUARY 2016
Brandon Oaks and Chamber photos courtesy Roanoke Regional Chamber MACH37 photo courtesy Merritt Group
Calendar of events
February
Items on the calendar are just a sample of state and Roanoke/New River Valley business events this month. To submit an event for consideration, email Tim Thornton at tthornton@roanoke-business.com at least one month before the event.
JUMP on this deal!
Feb. 1-6
Strong Men & Women in Virginia History Exhibition
3 yrs 40% 2 yrs 33%
Library of Virginia Richmond In observance of Black History Month, the state library and Dominion Virginia Power honor eight distinguished Virginians in this traveling exhibit for their contributions to the commonwealth and the nation.
www.lva.virginia.gov/ public/smw/2015/ exhibit.htm
1 yr 10%
Feb. 17
Realtors Day on the Hill Richmond More than 500 members of the Virginia Association of REALTORS are expected to join together at Capitol Square for Day on the Hill to speak with their respective Virginia General Assembly representatives. VAR will introduce legislation that covers a wide range of issues that will impact Virginia’s 30,000 REALTORS and the rights of property owners in the state.
www.varealtor.com
Save up to
40% off cover price
Feb. 17-21
Virginia Wine Expo Richmond More than 11,000 people are expected at the Greater Richmond Convention Center and nearby venues.
TO SUBSCRIBE,
www.virginiawineexpo.com
Feb. 24
STEM Internship & Career Fair Radford University Employers can register and attend this science, technology, engineering, and math (STEM) career fair to meet and network with Radford University students.
you can fill out the subscription card located in this magazine, online at VirginiaBusiness.com, or by calling (804) 225-9262. We happily accept credit cards by phone or we can bill you if you prefer.
www.radford.edu/content/career-services/home/ events/stem-internship-career-fair.html
VirginiaBusiness.com ROANOKE BUSINESS
7
SPECIAL REPORT
Old king coal
dethroned
The rock that powered Appalachia’s economy for more than a century is crumbling by Mason Adams
I
n late October, Appalachian Power President Charles Patton made headlines in West Virginia when he told a summit of energy executives that coal isn’t coming back, even if federal rules on power plants get rolled back.
Sure, that may be conventional wisdom in much of the country, but this speech came from the president and COO of Central Appalachia’s biggest electric utility. Appalachian Power has relied on coal as its dominant source of generation since its inception in 1911. Two weeks later, as Patton walked into Appalachian Power’s offices in Roanoke — his newsmaking remarks
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FEBRUARY 2016
were delivered in the West Virginia community of the same name — he acknowledged that his remarks were not what the room wanted to hear. After all, the economy in southern West Virginia and Southwest Virginia was built around coal mining, and many still fervently hope that a coal comeback will fuel a new round of economic prosperity.
Appalachian Power’s coal-fired power plant at Glen Lyn began generating electricity in 1919. When the plant closed in May 2015, it housed the oldest and smallest generating unit owned by AEP, Appalachian’s parent company.
Even as elected officials continue to fight against the so-called “war on coal” in statehouses and on Capitol Hill, Appalachian Power is taking action that will cement its move away from coal for electricity production. That’s not to say the utility won’t continue to rely on its existing fleet of coal-burning power plants, but, according to a document filed with the Virginia State Corporation Commission (SCC), Appalachian Power has begun a substantial pivot away from the fossil fuel that defined the company’s first century. The company’s Integrated Resource Plan (IRP) filed with the SCC in July includes a dramatic decrease in its use of coal, as well as a corresponding increase in natural gas and renewable energy such as wind and solar. The plan includes converting two units at its Clinch River plant from coal to natural gas, diversifying its generation portfolio by investing in wind, utility-scale solar and natural gas-fired generation, and implementing demand-side solutions through energy efficiency and programs that make the grid more efficient. More solar, wind and natural gas Appalachian Power’s plan projects that by 2033 it will add 2,766 megawatts of solar, 5,150 megawatts of wind and 2,000 megawatts of Photo courtesy Appalachian Power Co.
natural gas-fired electricity, while also retiring 5,738 megawatts of coal and 1,063 megawatts of gas. “There are three drivers of this,” says Patton. “First, environmental regulation and the economic challenges of coal associated with that. Second, the pure economics of natural gas … And third, technology itself — the cost of wind, the cost of solar continue to drop.” Indeed, the last decade has seen dramatic changes in how electricity is generated in the U.S. The advent of horizontal drilling has swelled the nation’s supply of natural gas, driving down its price. The Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) clean air rule accelerated the retirement of 11 AEP power plants totaling 4,600 megawatts. Five Appalachian Power plants were affected, including the Glen Lyn in Giles County, which was shut down, and the Clinch River Plant in Russell County, where two of three coal-burning units were converted to gas. The EPA’s Clean Power Plan (CPP) places additional limits on emissions of carbon dioxide. Meanwhile, a combination of incentives — passed as part of the 2009 federal stimulus — and investment by new players has resulted in big advances for renewable energy. Across the country, coal shrank from 52 percent of electricity gen-
eration in 2000 to 39 percent in 2013, according to the Energy Information Administration. During that same time, natural gas grew from 16 percent to 27 percent and renewables from 9 percent to 13 percent. Nuclear power remained steady, more or less, at 20 percent in 2000 and 19 percent in 2013. The generation numbers of American Electric Power, Appalachian’s parent company, are even more dramatic. In 2005, coal accounted for 74 percent of AEP’s generating capacity, versus 17 percent for natural gas, 6 percent for nuclear and 3 percent for hydro, wind, solar and pumped storage. In 2016, the company estimates coal will make up 51 percent, natural gas 28 percent, renewables 11 percent and nuclear 6 percent. Although the CPP is driving much of the conversation, Patton has been telling stakeholders that these changes will happen regardless of who is serving in the White House. Excerpts from the powerpoint presentation Patton delivered in West Virginia lay out the picture: “Will the CPP further reduce coal consumption in the U.S.? Yes.” In Virginia, the CPP calls for a 32 percent reduction in emissions from existing coal-fired plants from 2005 levels, with a 2030 deadline. West Virginia’s reduction target is 37 percent. ROANOKE BUSINESS
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special report Smith Mountain Dam is a 50-year-old example of Appalachian’s renewable energy portfolio.
If the CPP is not enacted, will coal consumption likely increase? No.” Here’s why: The cost of generation per megawatt hour is $114 for utility-scale solar, $73 for wind, $100 for natural gas with carbon capture and storage technology, $73 for natural gas, $144 for advanced coal with carbon capture and storage, and $95 for conventional coal. “Are entire communities being decimated by the decline of coal? Yes.” Employment in the coal industry from 2008 to 2015 fell 28 percent, and severance tax — a key metric and source of revenue for coal communities — decreased 25 percent over the same period. “Will technology stall if the CPP is not enacted? No.” Private sector embraces renewables Regardless of government mandates, the private sector already is moving toward cleaner energy sources, Patton says. Investment managers controlling $2.6 trillion have committed to divest from fossil fuels, while corporate giants such as Johnson & Johnson, Procter & Gamble, Starbucks, Goldman Sachs and Walmart have committed to renewable energy goals. The large-scale shift that Patton talked about has coal companies 10
FEBRUARY 2016
reeling. Federal regulations such as MATS and the CPP have contributed but are far from the only factors. Horizontal drilling and hydraulic fracturing have made natural gas prices much more competitive, especially when paired with the fuel’s comparatively clean burning profile. While those dynamics have crippled the market for steam coal, used to generate power, an economic slowdown in China has driven down demand for metallurgical coal, used in making steel. Those two trends have resulted in a steady stream of layoffs, bankruptcies and consolidation within the coal sector, especially in Appalachia, where seams tend to be thinner and more difficult to access compared with coalfields in the Midwest. That chain reaction has not only affected coal country but also areas like the Roanoke and New River valleys, which play a less direct but still important role within the industry. As coal volumes declined, for example, earnings at Norfolk Southern, a longtime area employer and a freight carrier for coal — took a hit as well. Appalachian Power has built coal-fired plants fairly recently — its 600-megawatt, John W. Turk Jr. Power Plant began operations in southwestern Arkansas at the end of 2012 — but no longer. “The Turk
plant is the last coal plant we’ll build in my career, unless there’s a technology change,” Patton says. Congressman Morgan Griffith of Salem, a Republican who represents Virginia’s 9th District, levels blame at President Barack Obama’s administration. “Natural gas is cheap, no doubt, but they probably wouldn’t be closing and retrofitting plants if it weren’t for the regulations,” Griffith says. “Natural gas might be a problem and there’d be some shift from coal, but you wouldn’t see this rapid collapse of the coal industry. You wouldn’t see AEP moving this fast if it weren’t for the administration’s policy.” While those connected to coal see a continued downward trend, environmental advocates see a lot to like in the company’s IRP document. “The IRP is very strong and has really demonstrated the positive benefits of wind power in particular — the lowest cost resource going forward, after Kresowik energy efficiency,” says Mark Kresowik, regional deputy director for the Sierra Club’s Beyond Coal campaign. “Now we certainly think there is more they can do, particularly on energy efficiency and moving beyond coal.” Hannah Wiegard, Virginia campaign coordinator for Appalachian Voices, expressed similar support for the IRP’s approach to wind. “It’s interesting to us that Appalachian is recognizing most of that wind resource potential is in western Virginia on ridges. That’s a good resource in our view,” Wiegard says. “I had just been reviewing the numbers they set in the plan — 150 megawatts of wind energy next year followed by 150 annually beginning in 2022 is significant. In that sense we appreciate Appalachian looking at diversifying its mix.” Wind matches the dirtier, cheaper version of natural gas — burned without the use of carbon capture technology — as a relatively low-cost Photos courtesy Appalachian Power Co.
energy source. According to Appalachian Power spokesman John Shepelwich, Appalachian Power intends to issue a request for proposals for up to 150 megawatts of windgenerated power to be operational by the end of 2017, with the company either owning the assets outright or purchasing the output through long-term renewable energy power purchase agreements. Appalachian Power seeks more solar In November, the company requested proposals seeking solar energy projects of up to 10 megawatts in Virginia. Similar to its pursuit of wind energy, Appalachian Power sought proposals that allow it either to own solar projects or purchase such output under one or more 20-year renewable energy purchase agreements. However, changes in federal law prompted Appalachian to withdraw that request for proposals and begin the process anew. This time the company plans to seek up to 150 megawatts of wind power under the same terms — except the project could be in Virginia, West Virginia, eastern Indiana, Kentucky, Maryland, North Carolina, Ohio or Pennsylvania. A provision in the budget deal Congress passed in December extends a 30 percent investment tax credit for industrial-sized solar projects. The credit was scheduled to fall from 30 percent of a project’s cost to 10 percent at the end of this year. Now the 30 percent credit extends through 2019 and gradually declines to 10 percent after 2021. In an email, Shepelwich says Appalachian Power decided “to end the November RFP process – subject to re-initiating it at a later date. This will allow the company to evaluate the appropriate time frame for it to add solar generation (given the new legislation) …” The move may also allow other companies to compete for the opportunity to build the project. Appalachian Power’s approach to solar draws praise and criticism
from environmental groups. What’s not popular is the company’s stance regarding rooftop solar setups — popularized regionally by the Solarize program — which often result in users seeking to sell their excess energy back into the grid. “One thing we’re hearing from customers that they’re expecting is for Appalachian Power to do a better job of encouraging residents to go solar, or at least not to discourage it,” Wiegard says. “Their IRP anticipates about 0.5 megawatts increase annually of customer-generated solar. That’s their assumption. We do believe that if they’re going to rely
“What is the real price of being connected to the grid?” Patton asks. “We subsidize that if we don’t get that price right. They still need surge [power] for the air-conditioner that solar will not provide. They want to sell energy back to the grid, but there’s a cost to that.” With solar advocates pushing for state legislation to encourage the spread of solar and Appalachian Power lobbying for its positions, giving $234,582 to candidates and committees on both sides in Virginia’s 2015 elections, some of these policy differences will no doubt play out in the General Assembly.
Appalachian Power President Charles Patton says customers who install solar panels have to help support the transmission system. That includes the 17 miles of new 138 kilovolt lines the company is building in Wythe County.
on that in their projections, they ought to not be in the way.” Solar advocates have long criticized Appalachian Power and AEP for policies they say discourage the growth of rooftop solar projects. Some have accused AEP of blocking laws to allow residents connected into the grid to sell their solar power back to the company. From Patton’s perspective, the question is less whether Appalachian Power can use that electricity than the cost of running the infrastructure that distributes it. The company routinely maintains its lines and provides upgrades and new lines to boost redundancy and reliability.
Natural gas as a “bridge fuel’ While the shift from coal to renewable energy sources has drawn most of the attention in the IRP, Appalachian Power’s increased use of natural gas also looks to play an underrated but important part in the company’s transition. Natural gas critics see it as yet another fossil fuel that carries its own set of issues and challenges. (Controversial transmission pipelines planned to pass through western Virginia no doubt rallied opponents who might not otherwise care about natural gas.) Natural gas supporters, including the White House and U.S. Environmental Protection Agency, claim it is a “bridge fuel” ROANOKE BUSINESS
11
special report
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that will enable utilities to make the shift to renewables. The latter view fits how natural gas plays into Appalachian Power’s plans. In 2005 it made up 17 percent of AEP’s generating capacity, before rising to 28 percent in 2016. The company projects that by 2026, it will drop slightly to 25 percent as renewable sources continue to grow. “Natural gas plants have always been cheaper to build than a coal plant, but there was so much volatility with the price” of gas, Patton says. Hydraulic drilling and fracking changed that. “Right now, the forecast for gas is so favorable and so cheap.” For Wiegard, it’s a question of unnecessarily delaying inevitable progress toward cleaner energy. “Is our region, despite the Clean Power Plan, going to remain dependent on fossil fuel sources more than we need to?” Wiegard asks. “Getting Appalachian Power to examine some of the root assumptions in its plan is something we hope to get at. As we’ve been discussing solar utility, wind, it’s not clear to us why those are limited to the levels they’re at. They seem to be arbitrarily capped. At the same time, we don’t know where their natural gas figure is coming from.” Patton, however, sees an advantage to natural gas. Wind carries a 35 percent capacity factor, meaning that its energy is available a little more than a third of the time — when the wind is blowing. By contrast, natural gas has an 87 percent capacity factor (with maintenance accounting for the rest), which makes it a more reliable power source. Beyond Coal’s Kresowik suggests that wind represents a better investment in terms of keeping prices down for Appalachian Power’s customers: “We’ve seen natural gas prices spike,” he says. “The surest way to get that spike is to use more of it. Buying into wind not only gives you the least-cost resource but also locks in cost for the next 20 years, which provides a guaranteed stable price for consumers.”
SPECIAL REPORT
Rocky Forge Wind
Botetourt County may have a 25-turbine wind farm by the end of 2017 Apex Clean Energy says its representation of Rocky Forge Wind is “hypothetical and subject to change.” This illustration shows “a maximum project size of 25 wind turbines with rotor tip heights of 550 feet.”
by Mason Adams
A
C h a rl o t t e sv i l l e - b a s e d renewable energy firm plans to build up to 25 wind turbines along two ridges on Botetourt County’s North Mountain. Apex Clean Energy hopes the 75-megawatt wind farm, which it has dubbed Rocky Forge Wind, will generate electricity that can then be delivered to an electric utility. The possibilities? Dominion has a nearby line, and Appalachian Power may be shopping Apex spokesman Kevin Chandler says the company anticipates that Rocky Forge Wind will be operating by the end of 2017. According to the company, the $150 million project will produce enough energy to power 20,000 homes. A study done by consulting firm Magnum Economics estimates the wind farm would be an economic powerhouse as well, producing more than $20 Photo illustration courtesy Apex Clean Energy
million in state and local taxes over three decades, as well as generating a $4.5 million annual impact on the local economy. In January, the Federal Aviation Agency said a preliminary study shows that the 549-foot tall turbines would pose a “presumed hazard” to aircraft navigation, because the current height exceeds the agency’s obstruction standards by about 50 feet. The nearest public airport to the proposed wind farm is 17 nautical miles away at Ingalls Fields in Hot Springs. The FCC has agreed to do a more detailed aeronautical study at Apex’s request, and company officials are in hopes that it will lead the agency to reconsider its presumption of risk. Another option for the company would be to lower the turbine’s height to 499 feet or less. The Apex turbines are planned for a remote site where the nearest
home is more than a mile away. Few people have expressed opposition. However, several residents have sued the county for failing to protect against potential dangers from turbines in its ordinances. Botetourt County’s planning commission has recommended approval of a special permit for the project, but the county’s Board of Supervisors had not acted by the time this story went to press. If the Botetourt County board approves the project, Apex will file an application with the Virginia Department of Environmental Quality for a permit that would include consultation and input from the departments of Game and Inland Fisheries, Historic Resources, and Conservation and Recreation. Other permits involve the U.S. Fish and Wildlife Service, the Federal Aviation Administration and the Army Corps of Engineers. ROANOKE BUSINESS
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BUSINESS LAW
Shifting rules
There’s a new willingness to prosecute individuals for corporate wrongdoing Richard Wokutch, Pamplin Professor of Management at Virginia Tech’s Pamplin College of Business, welcomes a new approach by the U.S. Justice Department to make business executives individually accountable for corporate misconduct.
by Dan Radmacher
M
ore than seven years after the financial collapse that plunged the U.S. and much of the rest of the world into a deep recession, there is still a lot of resentment directed at corporate America. While massive fines were levied against a few of the institutions at the root of the collapse, only one banker saw the inside of a jail cell.
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FEBRUARY 2016
“Everyone says we should have put the bums in jail,” says Richard Wokutch, Pamplin Professor of Management at Virginia Tech’s Pamplin College of Business. “The lack of prosecutions after the 2008 financial crisis created a lot of cynicism. The big shots got away with it.” Though companies involved in the collapse paid fines, penalties and settlements of nearly $190 billion, that money came from cor-
porate coffers and in some cases was even tax deductible. Only one individual — a senior trader at Credit Suisse — was successfully prosecuted. But the prevailing ethos at the Justice Department that had led to the policy of seeking large fines rather than bringing criminal charges against individuals is changing, and in a big way. The change can be seen in the criminal charges brought against Stewart Photo courtesy Virginia Tech
Parnell, the CEO of the Peanut Corp. of America after a salmonella outbreak killed nine people, as well as the recent trial of former Massey CEO and coal baron Don Blankenship. The Peanut Corp. of America case, whose defense team included Roanoke-based Gentry Locke, drew a lot of local interest because the company’s headquarters was located in Lynchburg. Parnell got a 28-year-sentence. Blankenship, the longtime CEO of Massey who was at the helm when an explosion in one of the company’s West Virginia mines killed 29 people, was convicted on Dec. 3, 2015, of a misdemeanor conspiracy to willfully violate mine safety standards at Upper Big Branch. About three months before Massey’s conviction, Deputy Attorney General Sally Yates released a memo to all U.S. attorneys titled, “Individual Accountability for Corporate Wrongdoing.” The memo stresses the need to combat corporate misconduct by seeking “accountability from the individuals who perpetrated the wrongdoing” and lays out new guidance for prosecutors investigating corporations. That guidance mandates that the focus of investigations be on individuals from the outset, and that no deals be cut with corporations that don’t cooperate fully in disclosing misconduct of individuals. Scott Austin, a corporate defense attorney with Gentry Locke in Roanoke who represented Parnell, said the Yates memo “changes the rules,” and he fears it may go too far. “In my personal view, we do need more individual accountability,” Austin says. “On Wall Street and in other corporate cases, if you take an objective look, it’s clear that people were making decisions that resulted in criminal activity. When they aren’t punished, it leaves the impression that big businesses can buy their way out and that the wealthy operate under different rules. Photo by Natalee Waters
Gentry Locke’s Scott Austin agrees there should be more individual accountability, but he thinks the Justice Department may be going too far.
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business law
Gentry Locke’s Justin Lugar thinks the new approach will have a significant impact in the Roanoke and New River valleys.
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“However, when you set out policies that mandate actions and take away prosecutorial discretion, that’s a bad thing. The Yates memo tells prosecutors they have to target individuals regardless of where the investigation leads them.” Va. Tech’s Wokutch says the memo is overdue. “A lot of CEOs and other folks who have been responsible for making the decisions that cause harm to people have been able to hide behind the fog of the corporate structure,” he says. Warner Dalhouse, a founding board member of HomeTown Bank in Roanoke, believes that corporate officers should understand they face personal risk if they commit illegal acts. “It shouldn’t just be corporate charters and shareholders who take the hit when a CEO deliberately risks other people’s money or lives for corporate or personal benefit,” Dalhouse says. “The nation is really fed up with that kind of conscious recklessness.” In a blog post that preceded the Yates memo, David M. Uhlmann, the Jeffrey F. Liss Professor from Practice and Director, Environmental Law and Policy Program at the University of Michigan Law School, discussed the need for both corporations and individuals to be accountable for misconduct. Noting that society confers significant benefits on corporations, Uhlmann writes, “When a corporation exploits those benefits and violates the public trust by engaging in illegal conduct, we must make clear that its behavior is unacceptable and condemn its conduct as criminal.” Justin Lugar, who works with Austin at Gentry Locke, believes the impact of the Yates memo will be felt intensely in places like the Roanoke and New River valleys because local and regional businesses tend to be closely held. “Business leaders need to be pro-active,” Lugar said. “You don’t want to wait for the government to knock on the door.” Photo by Natalee Waters
Austin agrees. “Any hint of impropriety needs to be investigated and rooted out,” he says. “This memo expands the number of cases when an internal investigation is required.” Wokutch says local business leaders might need to take a more hands-on approach. “These recent cases suggest that prosecutors are going to go after individuals who are personally responsible for making the decisions,” he says. “If that’s going to be the case, then people who are making the decisions need to be aware of that. They need to understand that the risks of questionable actions involve more than just financial consequences to the corporation that can be passed on to customers.” That has been too common in the past, he says. “The corporate structure has protected people from personal consequences for very serious actions, like the BP Deepwater Horizons oil spill or the
“The corporate structure has protected people from personal consequences for very serious actions ...” — Richard Wokutch Bhopal tragedy,” he says. “Lots of people who should have been held personally responsible got away without consequences, and companies just paid financial penalties.” Determining culpability, though, isn’t always easy, says Dalhouse. “I’m very sympathetic to the current mood demanding to see that individuals are held accountable,” he says. “But the fundamental question is whether those people were cognizant of what they were doing. It can be hard to identify who the individuals are, who should be held accountable.” Yates acknowledged as much in her Sept. 15 memo. “In large corporations, where responsibility can
be diffuse and decisions are made at various levels, it can be difficult to determine if someone possessed the knowledge and criminal intent necessary to establish their guilt beyond a reasonable doubt. This is particularly true when determining the culpability of high-level executives, who may be insulated from the day-to-day activity in which the misconduct occurs.” Austin, the peanut tycoon’s attorney, warns of unintended consequences from what he worries is a politicization of the criminal justice process. “The Yates memo locks prosecutors in,” he says. “It was a public proclamation, a political declaration based on political expediency.” Wokutch says the focus needs to be on actual accountability. “It shouldn’t just be that we’re happy to see CEOs put in prison,” he says. “But if they are truly responsible, it’s a good thing that they’re being held accountable for their actions.”
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COMMERCIAL REAL ESTATE
What’s ahead in 2016?
Predictions vary, but commercial Realtors expect some new construction and more activity in smaller markets Dennis Cronk of Roanoke’s Poe & Cronk Real Estate Group agrees with predictions that 2016 will be a good year for Realtors who specialize in properties worth less than $1 million.
by Donna Alvis-Banks
W
hen real estate professionals from around the country gathered in San Diego last November for the National Association of Realtors (NAR) Conference & Expo, the group’s chief economist, Lawrence Yun, said 2016 would be a year when smaller markets will shine. “There is an indication that prices may have topped for highend commercial properties in major markets,” Yun said, noting that properties above $2.5 million had large price gains in recent years but now will see modest price declines. On the other hand, he said, Realtors who specialize in commercial
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properties in the $500,000-to-$1 million range may enjoy new gains. That came as good news to Dennis Cronk of Roanoke’s Poe & Cronk Real Estate Group, who attended the conference. “I think Lawrence has got it right,” says Cronk, who served as the NAR president in 2000. “Small business people are looking for properties under $1 million,” he noted. “Businesses need to expand. If you don’t grow, you tend to go the other direction. I think local companies drive most of the business. We are seeing a lot of that now. There’s a lot of activity.” During recent years, renova-
tion and rehabilitation were the buzz words in Roanoke’s real estate market. Many historic buildings – including some that had sat empty for years – were transformed into apartments, offices and trendy retail stores. Tax credits and a sluggish construction industry fueled the trend. But will it continue? Cronk isn’t so sure. “Over the last several years, [renovation] has been a very important factor in our economy. The problem is that the cost of new construction, the cost of developing land is much greater than the cost of using an existing building. But that existing inventory is drawing down quite quickly.” Photos by Don Petersen
“Now we’re down to a limited number of buildings, especially on the industrial side,” he adds. Despite the expense, there is some new construction in Roanoke, as well as in the New River Valley. Brokered exclusively by Cushman & Wakefield|Thalhimer, The Bridges – a $100 million downtown development project by Richmondbased WVS Cos. – opened its firstphase, 157-unit apartment complex, along with a Starbucks and several offices, on a long-vacant stretch of South Jefferson Street near the Virginia Tech Carilion School of Medicine and Research Institute. A new Moe’s Southwest Grill next to Starbucks is expected to open soon. John Nielsen, managing broker for Thalhimer’s Roanoke office, believes more building is on the horizon. “We’re hopeful that there should be some new announcements of construction projects in 2016,” he says. “Those new construction or reconstruction projects will be the catalyst for future growth. I would say that as we get further away from the recession, the trend we should see is less growth with the discount uses. The trend should be more toward mainstream retail and higher end retail. The higher end retail will follow population and job trends.” In downtown Blacksburg, The Brownstone – a new residential, retail and parking complex taking up a chunk of Main Street – is open. Underway is the University Crossroads project at University City Boulevard and Prices Fork Road where retail spaces and two new hotels are being constructed near Virginia Tech. An 829-unit, upscale apartment complex on Prices Fork Road, The Retreat, should be completed in time for students returning to Blacksburg this fall. Virginia Tech’s Corporate Research Center has ongoing construction that’s part of its Phase II development, which is designed for 19 buildings.
John Nielsen, managing broker for Cushman & Wakefield|Thalhimer’s Roanoke office, expects to see more new construction in the region this year.
Ray Alcorn of Park Commercial Real Estate, one of the New River Valley’s oldest commercial firms, says more new construction is a safe bet in the coming year but the area should not expect great increases. “My crystal ball is as murky as anybody’s,” he says. “What I see for the Montgomery County demographic is slow, steady growth. Retail sales will probably set a record this year. The economy is healthy but we won’t see an explosive boom.” Spurred by Virginia Tech and Radford University, the New River economy will continue to grow, Alcorn predicts, noting that there is ample available real estate space in Blacksburg and Christiansburg. “The Corporate Research Center, the Virginia Tech Transportation Institute, the Via College of Osteopathic Medicine – all of those create a synergy that leads to buildings being filled,” Alcorn says. Ben Harris of Christiansburg’s Harris Commercial Realty notes that “with Virginia Tech and the CRC growing, we will continue to see growth.” “As long as interest rates remain low, I think there will be a demand for commercial real estate – not only from the user side but from the investor side,” Harris says. “The existing inventory is slowly
but surely being acquired. A lot of companies are still leasing rather than buying because they want to be cautious. The investors are looking for good buys on the market. If you buy right, that’s the start of a great deal. Everybody’s looking for a deal.” Jim Woltz, of Roanoke’s Woltz & Associates, attributes investor reluctance to what he calls “pathetic banking rules.” “Why are we not seeing the real estate market on fire right now?” he asks. “The problem is it’s a struggle to get anything financed through the banks because of regulations. The lending climate will affect us until someone does something about changing the bank rules.” Pointing to the Dodd-Frank Wall Street Reform and Protection Act, a federal law enacted in 2010 to prevent recurrence of the 2008 financial crisis, Woltz says community banks have been negatively impacted. “It’s not the community banks that did this. It was the big banks,” explains Woltz, who also serves on the Roanoke County Planning Commission. Cautious about “painting a rosy picture” of the Roanoke real estate market, Woltz believes Roanoke needs to continually seek improvement. In 2016, he says, “we are ROANOKE BUSINESS
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commercial real estate
Jim Woltz, of Roanoke’s Woltz & Associates, predicts “really modest growth” in Roanoke’s commercial and industrial real estate markets.
going to see really modest growth commercially and industrially.” Lucas Thornton of Hist:Re Partners LLC, a construction and
consulting company he founded in 2008, is investing in new construction in downtown Roanoke and hopes his actions will encourage
others to do the same. The developer bought a city-owned parking lot on the corner of Franklin and Williamson roads for $50,000 and is now building an 80-plus unit apartment and retail building slated to open in July. Thornton says his company’s total investment will be about $10 million. “It’s an audacious thing to do, to build something new in a town that has the history and character of Roanoke,” says Thornton. The architectural goal of his project is to complement the 20th-century small lot vertical construction that typifies midsize cities like Roanoke. Thornton, a Botetourt County native who grew up on a dairy farm, says the project represents an exciting challenge for him – and an exciting opportunity. The opportunity to add beauty to downtown is, in his words, “a big deal.” “I decided to be a part of the future of Roanoke,” he says. “We’re certainly excited about it.”
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Individual Memberships
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Photo by Don Petersen
Commercial real estate firms Blue Ridge Real Estate LLC
Blacksburg
blueridgerealestate.org
540-953-0054
Bondurant Realty Corp.
Radford
bondurantrealty.com
540-639-9672
Branch Management Corp.
Roanoke
branchmgt.com
540-774-1208
Broughman Commercial Services
Roanoke
broughmancommercial.com
540-400-6870
Burnette Real Estate
Blacksburg
burnetterealtors.com
540-951-2775
Coldwell Banker Townside Realtors
Blacksburg
cbtownside.com
540-552-6500
Coldwell Banker Townside Realtors
Roanoke
cbtownside.com
540-989-3311
Commercial Investments Realty Co. LLC
Roanoke
540-769-5110
Crawford Commercial Real Estate Services Roanoke
crawfordcommercial.com
540-527-1240
Cushman & Wakefield |Thalhimer
Roanoke
thalhimer.com
540-767-3000
Divaris Real Estate Inc.
Roanoke
divaris.com
540-776-0090
Fralin & Waldron
Daleville
fwinc.com
540-774-4415
Giesen-Caldwell Agency Inc.
Radford
giesencaldwell.com
540-639-1322
GMC Leasing
Blacksburg
gmcleasing.com
540-750-1050
HHHunt
Blacksburg
hhhunt.com
540-552-3515
Hall Associates Inc.
Roanoke
hall-realtor.com
540-982-0011
Harris Commercial Realty
Christiansburg
harriscommercialrealty.com
540-250-4836
The Hill Cos.
Blacksburg
brownstoneblacksburg.com
540-808-2213
J B Goria Commercial Real Estate Inc.
Roanoke
jbgloria.com
540-989-4140
Long & Foster Cos.
multiple locations
longandfoster.com
866-677-6937
MKB Realtors
Roanoke
mkbrealtors.com
540-989-4555
Park Real Estate Inc.
Blacksburg
parkrealty.com
540-552-5533
Poe & Cronk Real Estate Group
Roanoke
poecronk.com
540-982-2444
Price Real Estate
Blacksburg
pricemanagement.com
540-552-1065
Price Williams
Radford
pricewilliamsrealty.com
540-639-3027
Realstar Realtors
Roanoke
realstar-realtors.com
540-776-0606
RE/Max
multiple locations
remax.com
540-989-3000
Sawyer Properties Inc.
Roanoke
sawyerproperties.com
540-345-7565
Scott & Bond Inc.
Bedford
scottandbond.com
540-586-3131
Wainwright & Co. Realtors
Salem
wainwrightco.com
540-387-5800
Waldvogel Commercial Properties Inc.
Roanoke
waldvogelcommercial.com
540-342-0800
Walker Commercial Services Inc.
Roanoke
walkerinc.com
540-344-6160
The Willard Cos.
Hardy
thewillardcompanies.com
540-721-5288
Woltz & Associates
Roanoke
woltz.com
540-342-3560 ROANOKE BUSINESS
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Photo by Natalee Waters
INTERVIEW: Ariel Lev, CoLab director and CityWorks (X)po project manager
Meeting the right people Director of co-working space and conference believes in the power of collaboration by Beth JoJack
t really is all about who you know. Ariel Lev met Brent Cochran through the Grandin Village Community Market, which he founded. Lev, at the time, was working for Good Food-Good People, a Floyd County-based reseller of locally grown food. She would come down the mountain to sell produce for the company. Lev ended her one-year contract with the Floyd business in November 2014. She took some time off to marry her longtime beau, Sam Lev, and to go on her honeymoon. Afterward the couple moved from Floyd to Roanoke. “We rented a house and didn’t have jobs,” says Lev, 27. “We were sitting on cardboard boxes kind of waiting for something to happen. That’s when Brent called me.” Cochran had an idea. “He suggested I meet with his friend Ed,” she says. Lev had moved to Floyd from D.C. in 2012 after earning her master’s degree in communication, culture and technology from Georgetown University. She’d never heard of Ed Walker, who has become a household name for many locals because of his work in developing historic properties and his passion for making the city more livable. Walker didn’t respond to a request for an interview for this story, but according to Cochran, the meeting between Walker and
I
Lev in January 2014 wasn’t a job interview. “Ed is always interested in meeting interesting people,” says Cochran, a social entrepreneur who juggles a lot of different enterprises, including working as a project manager for Walker’s company, CitySpace LLC. “He was interested in why someone my age with my educational background would choose Roanoke,” says Lev. Whatever the motivation for the meeting, by the time it concluded, Lev says, Walker invited her to do some projects for him. Together, Lev says, they decided to “see how things go.” At first, Lev worked on a database that connects fellowship recipients from the Massachusetts Institute of Technology and Harvard, where Walker completed a Loeb fellowship. Later, she began working to plan events and develop strategic marketing for the ballroom at the historic Patrick Henry Hotel. Walker invested $20 million in a renovation of the Patrick Henry and reopened it as apartments and commercial space in 2011. When Walker partnered with entrepreneur Samantha Steidle to open the CoLab in April 2014, Lev paid attention. “I wanted to be more involved,” she says. The business, which started with a location at the Grandin Village and now has a second space
in the Patrick Henry, offers workspace, conference rooms and event space. The 143 names on its membership roster include folks who might normally be forced to work out of their basements — graphic designers, tech workers of all stripes and business start-ups. In September 2014, Lev came aboard as the CoLab’s director. Since she started working with Walker, Lev also had assisted with the planning of CityWorks (X)po, the annual conference he first staged in Roanoke in 2011. Through a series of speakers and networking sessions, (X)po explores ideas about how to make communities better. At the 2015 conference, Walker announced Lev would also be taking over as the (X)po’s project manager. A new staff member came aboard to manage the CoLab, freeing up some time for Lev to devote to her new endeavor. The 2016 (X)po, co-hosted by the CoLab and the Grandin Theatre, will be held Oct. 6-8. Cochran, the seasoned multitasker, sounds confident in Lev’s ability to juggle the CoLab and (X)po. “I think Ariel is part of this wave of talented young people who are moving into town and doing really awesome things,” he says. “That’s the next generation of Roanoke, and it’s going to make Roanoke even cooler.” ROANOKE BUSINESS
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interview Roanoke Business: You grew up in Burlington, N.C. Then you hit Appalachian State University in Boone, N.C., where you majored in communications/electronic media and broadcasting. Afterward, you were off to Georgetown for grad school. What do you study to earn a master’s degree in communication, culture and technology? Lev: You could choose your own adventure through that program. Anywhere from very hard technology skills, coding and various other really geeking-out computer work … [to] critical thinking on technology and its impact on our culture. I took a class called “How to Predict the Futures,” which was awesome, and learned how to think critically about scenario planning and the future of technology. So, really, running a coworking space is absolutely perfect for my educational background, which is funny because I came out of that thinking, “I don’t know what I’m going to do because there’s no job built for the education that I have.” RB: How did you end up in Roanoke? Lev: We didn’t have the revenue to stay in D.C. as a couple ... Plus, both of us went to school in the mountains, and we wanted to get back to a more outdoor-friendly town ... We didn’t want to go back to our college town [and we] didn’t really want to go to another college town. We started narrowing it down. We were like, “What’s Roanoke?” I’d never heard of it ... I visited alone one day and saw the star and thought, “That’s funny. What is that?” [I] went to a couple restaurants and just decided it would work. Got a really good vibe. RB: Why should people become members of the CoLab? Lev: One term people use to describe co-working spaces is “accelerated serendipity.” There’s so much more opportunity for people to meet that wouldn’t normally 24
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meet ... the competitive nature is so low here, almost to a fault. People hand off gigs to each other ... CoLab members hire each other all the time. RB: You seem to have a lot of friends who work here. Lev: I’ve made a lot of friends through the CoLab. I used to make a joke — I still make it in my head — that when they are signing the membership contract, they’re signing up to be my friend because we’re going to be around each other all the time. RB: I was surprised to learn people work here at night. Lev: Co-working spaces have to be open 24/7 because you have people who are working 9-to-5 making a living and their passion project can only happen at night. Then there are people who prefer to work in the evenings and weekends. RB: I was also surprised to read that CoLab offers virtual memberships. You said that some people just want to be able to use the CoLab as their business’s mailing address or be included in the CoLab’s membership directory? Lev: Most people do end up coming in and using the space at some point whether it’s once a month or every day. We have a good handful of members who live in Richmond, Charlottesville, D.C. When they’re in Roanoke, they need a space to conduct their client meetings or interviews, and they will use us. We cater to a lot of different needs. RB: There’s a lot more activity than I would have expected. Lev: We try really hard to not make this place feel like a library. We want to encourage people to talk on the phone and to have meetings out in the public area. We have a limited number of offices. I don’t want people to feel like they have to book an office to take a phone call.
RB: Do members ever get riled up about the noise? Lev: We’ve had some complaints. Some people talk louder than others. It annoys people. That’s when I say, “You’re welcome to book an office. That’s why we have them.” RB: Is the CoLab making a profit? Lev: We do have a lot of partnerships that help us. We want to get to a point where the business sustains itself through memberships and event space rentals. We’re looking like we’re heading in the direction where we’ll be able to say that relatively soon. RB: Let’s talk about how you ended up taking over the reigns for (X)po. Lev: We started thinking about the future of (X)po in terms of, will it lead a happy life and then kind of expire or will it be taken over by another organization or will we try to keep it going through this organization? As Ed told us, everything has a lifespan. He did not want to push something into its next few years without really considering what it means for the actual event and the actual organization. So the decision we made was to move it under the house of CoLab. And that Ed would still be involved in the mission and [organizer Amy McGinnis] would still help out — you know, lend her vast knowledge about planning (X)po — but it needed to live somewhere else besides in their minds. It was a lot of work for people to do on mostly a volunteer basis. RB: Will people see a lot of changes under your leadership? Lev: We do have some significant plans about changing a couple of the cornerstone tenets of (X)po, but none of the mission will change. The mission is bringing people together and building community and sharing big ideas. In terms of logistics stuff, a couple of things are probably going to change, but I can’t say anything yet.
One of the other things we agreed to do with (X)po and are very excited about is extending (X)pobranded events throughout the year, so it’s not just this rush and effort and money and everything gets piled into this one three-day weekend. During (X)po 2014, we decided to start this thing we called (X)po Wednesday, which we still have. We’ve been doing it for a year. Every Wednesday we have a speaker who hangs out in the front area of the CoLab. Sometimes it’ll be a formal presentation. Sometimes it’s more of a collaboration session. We have a pretty dedicated group who comes every week. That’s probably 10 or 15 folks who show up, mostly neighborhood folks ... People come to these (X)po Wednesdays in all stages of life, but we’ve seen a lot of people who are looking for work. Which is great. It’s a lot of good networking. We are planning on doing events throughout the year, probably seasonally, so like a winter
One of the other things we agreed to do with (X)po and are very excited about is extending (X)po-branded events throughout the year, so it’s not just this rush and effort and money and everything gets piled into this one three-day weekend.
— Ariel Lev event, spring event, summer event. What I want to see them be is a time when people can come into this space and actually leave having done something. A lot of the criticism we hear — not just with (X)po but with all speaker events — is a lot of talking happens and a lot of great idea exchange happens, but you leave feeling like there’s not anything that’s been accomplished ... We want to have these seasonal events where we bring people into
the space and sort of have a hackathon mentality. We have problems, and we sit in a room and solve them. I don’t know exactly how it’s going to work ... The seasonal events would be something like, for example, four people get on stage and describe the topics. Somebody who works in education would come on stage and say, “We’ve got this thing we want to implement” or “This problem that has been stopping us from doing the thing we want to do.” After the four people give their spiel, we break for a little while and get lunch. Then in the afternoon, you come back and go in a room with that speaker and sit with them and brainstorm ideas of how to make changes. Who knows, maybe after the first one we’ll say, “This model is trash. We’re getting nothing done, and we’re just fighting.” The hope is we’ll get the right people in the room who have ideas about how to change things.
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HIGHER EDUCATION: Ferrum College
Global awareness Ferrum works at preparing students for life and work in an ever-shrinking world by Shawna Morrison
Ferrum students are required to take one Experiential Term course. E-Term courses run for three weeks in May and often include travel. In this photo, Ferrum students are in the Virgin Islands.
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F
errum College is expanding its curriculum. From updates to its general education program to an online degree completion program for a popular major and a new minor in cybersecurity the college wants students to be better prepared for life after graduation. Particularly in its general-education program, school leaders are trying to find new ways to bring the world to the nearly 1,500 students on its rural, 700-acre Franklin County campus. To that end the school approved updates in December to its general education program, the set of courses all students take regardless of their major. “Our students will now have the opportunity to dig more deeply into global awareness, quantitative reasoning and integrated learning,” says college President Jennifer Braaten. Professors still are working on ways to integrate the concepts into their courses, she adds, and the hope is they will be ready in the fall. According to Braaten, faculty members are particularly excited about increasing students’ global awareness. Professors can design a new class or enrich the classes they already teach by adding a global awareness component, she says. Students already take part in what the school calls an “E-term,” three weeks in May during which the focus is on experiential learning. A variety of credit-earning courses is offered each year, and completion of one E-term is a requirement for graduation. During the E-term, students may take part in regional, national or international travel, conduct research or complete a service learning project. In
Photo courtesy Ferrum College
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higher education Ferrum students followed the Camino de Santiago trail in Spain as part of a religion course.
recent years, students have traveled to Belize, Ireland, Paris, Belgium, Amsterdam and Russia, Braaten says. Last year, some students and faculty followed the Camino de Santiago trail in Spain, a famous Christian pilgrimage, as part of a religion course. Vice President for Academic Affairs Gail Summer says most Ferrum students are from Virginia. Only about 12 to 14 international students attend school there at any time. Many students have never been outside of Virginia – or even their home county – and many are first-generation college students. “To us, then, it becomes even more important that we stretch them beyond that while they’re here to see how their home or their experience fits within that larger world,” Summer says. “You understand yourself better when you understand others. Not to be cliché, but the world is getting smaller.” When students enter the workforce, they may be working with people from different parts of the world. “We owe them some opportunity to understand and appreciate that and not find that first experience uncomfortable or unusual,” she says. Braaten says Ferrum wants stu28
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dents to be a part of “conversations and discussions and courses that can make a difference and transform your world view.” “It’s always been part of who we are, but we’ve highlighted it more,” she says. For students who are unable to take part in study abroad, “they will at least have some exposure,” she says. That could mean visiting museums to learn about world history, visiting a synagogue or a mosque to learn about different religions or learning about the tradi-
Nearly 1,500 students study on Ferrum’s 700-acre campus.
tions of other cultures. “So you’re saying the world really is here, wherever I am, and I need to understand it at a better level,” Braaten says. Ferrum College also rolled out a new online degree completion program for a major in criminal justice this school year. Criminal justice is one of the school’s most popular majors and “has always been a point of pride,” Braaten says. William “Dub” Osborne Jr., a professor and the college’s criminal justice program coordinator, says there were about 95 students majoring in criminal justice when he started teaching there about eight years ago. Today the school has 164 majors. He says the program is interdisciplinary, with students taking courses in psychology, sociology, social work and political science. Most graduates from the Ferrum program go into law enforcement jobs in Southwest Virginia, he says. Some have joined the Virginia State Police, a few continue their studies in graduate school and a handful have gone to law school, he says. Before coming to Ferrum, Osborne worked as a probation and parole officer in far Southwest Virginia — Wise, Scott and Lee counties — and in Richmond and Portsmouth, and taught for two decades combined at Mountain Empire
Community College and the former Virginia Intermont College. He says he has learned what qualities are needed in a student to do certain jobs upon graduation. Osborne says some students come into the program without a clear direction. “We get to know the students as to what their strengths and weaknesses are and try to guide them to go in a direction that they’re going to be successful,” he says. He remembers one student who took several of his classes but wasn’t sure exactly what she wanted to do when she graduated. He noted that she had a good memory and “never made a mistake.” He pointed her in the direction of a crime analyst job, which she now holds. The school’s criminal justice program was recognized in the fall by Correctionalofficer.org, which ranked it sixth out of 40 programs in Virginia in terms of supporting careers in criminal justice and corrections. The rankings were based primarily on what percentage of graduates obtained criminal justice degrees. “It’s just an independent recognition of what we’re doing, and I think that’s something to be proud of,” Osborne says. “If this can open doors for students, that’s what we’re interested in.” The need for criminal justice professionals in all fields — law enforcement, corrections, social services — is on the rise, Braaten says. The new online degree completion program is geared toward students who already have an associate degree but want to work toward a bachelor’s degree. The ability to take classes online will allow students who are already working to fit college into their schedules. Ferrum is working on developing a new minor in cybersecurity, Summer says. She says a person who graduates with a major in psychology or business or criminal justice paired with a minor in cybersecurity will be “highly employable.” The school plans to have that field Photos courtesy Ferrum College
Blacksburg Chief of Police Kimberly Crannis, a Ferrum executive in residence, speaks to a criminal justice senior seminar class.
available as a minor this fall. Summer notes that Ferrum’s farm, Titmus Agricultural Center, also was recognized this year, earning a ranking of 8th place in a list of 40 college farms nationwide by College Ranker. According to College Ranker, the rankings were based on opportunities such as hands-on experience, student involvement, community outreach programs and degree options. At the farm, students
get experience caring for sheep, cattle, horses and, at some times, pigs. Produce and herbs grown organically there are used in the dining hall. “You’re going to get experience starting your freshman year,” Summer says of the agriculture program. “Students get an amazing hands-on experience because we’re smaller. And that’s true in a lot of our programs.”
• Founded in 1913 • School is affiliated with the United Methodist Church; the main administration building is called John Wesley Hall, after the founder of Methodism. • More than 80 percent of students live on campus. • Has second oldest environmental science program in the U.S. • Jennifer Braaten has been the school’s president since 2002; she is the 10th president and is the first woman to hold the position. • Offers 31 majors and 40 minors • Unusual programs include a Russian major and an ecotourism minor. • Student-faculty ratio is 17:1. • Every year on the fourth Saturday in October, the school hosts the Blue Ridge Folklife Festival, which is coordinated by Ferrum’s Blue Ridge Institute & Museum. • Hosts an annual Forum on Critical Thought, Innovation and Leadership, open to the public at Hotel Roanoke and Conference Center. The next forum is planned for March 14 with the topic of government seizure of property. Sources: ferrum.edu, President Jennifer Braaten
ROANOKE BUSINESS
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COMMUNITY PROFILE: Franklin County
Harvesting growth Franklin County heads into a future with a new music venue and business site by Gene Marrano
30
FEBRUARY 2016
Roanoke’s Brass 5 finished its 2015 Christmas tour at Rocky Mount’s Harvester Performance Center.
A
bedroom community for Roanoke. A retirement and resort destination at Smith Mountain Lake. A county seat in the town of Rocky Mount that offers live music that people will travel to hear. Franklin County is all of that.
Rocky Mount is seeing lots of out-of-town visitors, thanks to the Harvester Performance Center. The town government invested about $2.7 million in the center, with more half of that money coming back in the form of historic tax credits and funds from the Virginia Tobacco Commission settlement. The money was used to transform what was once an International Harvester tractor
Photo by Natalee Waters
showroom into a concert hall with acoustics that have have drawn raves from the likes of Merle Haggard. Rocky Mount is not yet seeing a direct positive economic effect, says Assistant Town Manager Matt Hankins, “but we’re trending that way.” In the current fiscal year Rocky Mount will contribute about $300,000 toward operations at the Harvester, an amount expected to ROANOKE BUSINESS
31
community profile decrease over time. Meanwhile, sales tax revenue attributed to concertgoers eating, shopping and staying overnight in Rocky Mount is on the rise. August 2015’s meals tax set an all-time monthly record, $130,000, and Hankins says the annual meals tax collected could double to more than $2 million because of the Harvester. “They’re treating [the town] as a destination,” says Hankins, who also oversees the concert hall. “If we wanted them to come to Rocky Mount we had to give them a reason – and I think we’ve given them a pretty great reason.” Most visitors are coming from within a two-hour radius – but people from at least 36 states and nine foreign countries have come through the door so far. General Manager Gary Jackson, who used to program music at Kirk Avenue Music Hall in Roanoke, says “shout outs” about the Harvester from musicians such as Jerry Douglas, who has been out on tour with Alison Krause, don’t hurt. Launched two years ago this spring, the Harvester’s 2016 roster includes Shovels and Rope, Marty Stuart and His Fabulous Superlatives, Greg Allman, Richard Thompson, Arlo Guthrie, Todd Rundgren and the Infamous Stringdusters. “In the industry we are getting a reputation that if you want to play a really special room then you need to come play at the Harvester,” says Jackson. A state of the art sound system and the intimate venue (around 400, with a smaller space in the basement) is a welcome change of pace for many bigname stars accustomed to playing larger arenas. One of the newer businesses in town that is a direct result of the Harvester is the Early Inn at the Grove bed and breakfast where Keri Jackson — Gary Jackson’s wife and a former teacher — is the innkeeper. “Our guests often want something to do before the show so they’re off shopping at local stores 32
FEBRUARY 2016
General Manager Gary Jackson says the Harvester is gaining a reputation among traveling musicians.
Gary Jackson’s wife, Keri Jackson, is the innkeeper at the Early Inn at the Grove bed and breakfast.
… going out to dinner [and] bringing tax dollars to Rocky Mount. We’re a place to be now,” she says. Lodgers have come from London, Nova Scotia and Roanoke, where another new business – TNT Autobody Repair – delivers guests from Tanglewood Mall via its Harvester Shuttle. “We promised the Harvester we would run
the shuttle for any show we get a ticket for,” says Tara Wall, who owns the business with her husband, Tim. Brent Robertson, who left his job as budget director in Roanoke County last year to become the county administrator in his native Franklin Robertson County, says the path laid out by the Board of Supervisors “is a well thought out one,” when it comes to economic development. Besides tourism, there’ s a focus on manufacturing. “It’s evolved to a more modern manufacturing [model]. I think they’ll develop a strategy to bring a certain type of business in,” Robertson says, noting an already “strong industrial presence,” that is keeping unemployment rates down below five percent. Robertson believes tourism, including the Harvester and Smith Mountain Lake, will be more important in the future. Franklin County is working on a strategic plan referred to as FC 2025, one Robertson says will require additional infrastructure and a revenue stream to help pay for those improvements He’s not ready yet to use the “T” word, as in taxes, but calls it a “perfect storm of opportunity … It’s just how do we take limited dollars – or ask the community to invest more new dollars?” The county took steps last November to create a new business site by agreeing to purchase the 350-acre Southway Farm off U.S. 220 between Boones Mill and Rocky Mount for $7 million. It will be 2017 before significant site preparation is underway, following a year of planning, says Economic Development Director Michael Burnette. “We have pretty well filled out our two existing industrial parks,” Burnette says of the Franklin County Commerce Center and Rocky Mount Industrial Park. The Southway Farm backs Photos by Natalee Waters
up to the route for the proposed Mountain Valley Pipeline which, if approved, could supply cheaper energy to manufacturers interested in the park. The site also has access to a four-lane highway, the Roanoke airport and Interstate 81. Public water lines and fiber-optic trunk lines for high speed broadband are also available nearby. “There are prospects that we get almost on a weekly basis that are looking for a greenfield site,” says Burnette. “You can only offer and market what you have in hand at the moment.” All that was left in the county’s inventory was a 9-acre tract – much less than the 25 to 100 acres many businesses seek. Burnette also gives the Board of Supervisors kudos for spending the money. “I think that shows their vision for the community. It’s going to hold us for the next 30 years.” Besides Rocky Mount, the other major population and commerce center in Franklin County is at Smith Mountain Lake, with Bridgewater Plaza and Westlake Center the primary commercial engines. Smith Mountain Lake Chamber of Commerce Executive Director Vicki Gardner – still recovering from the tragic on-air shooting last August that left two Roanoke TV journalists dead – says her organization is “extremely dedicated to Franklin County.” It wasn’t until 2014 that a satellite chamber was opened in the county. “Our goal is to truly embrace Franklin County and have [businesses] understand the benefits of chamber membership.” Gardner says the elements that can strengthen the business climate “are happening as we speak.” Interstate 73 – long on the drawing board – will come through Franklin County on its way to Greensboro if it is ever funded and built. That would be a boon, says Gardner, as would a Bedford passenger train stop between Roanoke and Lynchburg for Amtrak – something the area is lobbying
Franklin County Founded
1785
Area
712 square miles
Population
56,358 (2010 estimate)
Government
County administrator appointed by an elected sevenmember Board of Supervisors
Largest Employers
Franklin County Public Schools, M.W. Manufacturing, Franklin County government, Ferrum College, Trinity Packaging, Carilion Franklin Memorial Hospital, Kroger
Fast Facts
Settled in the 1740s by pioneers from Maryland, Eastern Virginia and North Carolina, mostly Scots-Irish and German. Tobacco was a leading crop early in Franklin County’s history. Notable native sons include Confederate Gen. Jubal T. Early and Booker T. Washington, founder of the Tuskegee Institute. His Franklin County birthplace is a national monument.
Sources: Franklincountyva.gov and Virginia Employment Commission
for. Visitors to the area – say from Washington, D.C. – could get off at the Bedford station, rent a car and drive to the nearby lake. That may sound fanciful, but Franklin County is focused on the
future, and it’s made up a lot of ground already. “Thirteen years ago Franklin County was a hundred years behind,” Gardner says, but now, “They truly are on the right path.”
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Roanoke Regional Chamber of Commerce | SPONSORED CONTENT Chamber champions are members who support the Roanoke Regional Chamber through year-round sponsorships in exchange for year-round recognition.
2016 CHAMBER CHAMPIONS BNC Bank Brown Edwards Cox Business Gentry Locke Attorneys LifeWorks REHAB (Medical Facilities of America) MB Contractors
Pepsi Bottling Group rev.net The Roanoke Times Rockydale Quarries Spilman Thomas & Battle PLLC Trane Woods Rogers Attorneys at Law
EVENT SPONSORSHIP
NEW MEMBERS
Thursday Overtime – Dec. 3
The following members joined the Roanoke Regional Chamber from November 10 to December 9, 2015.
Pleasant Ridge Premier Office Park Spilman Thomas & Battle PLLC
ALDI Inc.
2015 State of the
Aquatic Adventures Inc.
Commonwealth – Dec. 9
Blue Safety Association
The Branch Group Inc.
Grant Broadcasting Systems II LLC
First Citizens Bank
Highway Motors Inc.
Advance Auto Parts
Junior League of Roanoke Valley Virginia Inc.
Virginia Chamber of Commerce
SyCom Technologies
Appalachian Power
The Grow Inc.
Mercer
The first professional ice hockey team in Roanoke in a decade has been given the name “Rail Yard Dawgs.” The Berglund Special Events Center hosts the hockey team. Big Brothers Big Sisters of Southwest Virginia was awarded $10,000 from the Comcast Foundation to fund the Salem school-based mentoring program. Katie Bush, marketing coordinator for Branch Highways, has been named “Member of the Year“ for the Roanoke Chapter of the National Association of Women in Construction. Bush joined Branch Highways in July 2013. J. William Karbach, CEO of The Branch Group headquartered in Roanoke, has announced the receipt of Contractor of the Year awarded to one of its subsidiaries. E.V. Williams Inc. received the award from the Hampton Roads Utility and Heavy Contractors Association (HRUHCA). The contractor of the year award is given in recognition of outstanding services and support with HRUHCA. Construction of Pine Ridge, a new 12-unit cottage-apartment hybrid on the campus of Brandon Oaks LifeCare Community, was officially commemorated with a ceremonial groundbreaking Dec. 3. Pine Ridge will be an addition to the existing Pines neighborhood built in 2010.
MEMBER NEWS & RECOGNITIONS Advance Auto Parts, a leading automotive aftermarket parts provider in North America, has announced it has entered into an agreement with Starboard Value LP and its affiliates regarding the membership and composition of the Advance Auto Parts board of directors. Under the terms of the agreement, Jeffrey C. Smith, CEO and chief investment officer for Starboard, has been appointed to the Advance Auto Parts board.
Sherman Jackson Brouillard Ferraro Advance Auto Parts has announced that its board of directors has appointed President George Sherman to the additional role of interim CEO. Sherman will succeed Darren Jackson, who retired as CEO and stepped down from the board on Jan. 2. Board Chairman John C. “Jack” Brouillard has been named executive chairman. The board also named board member John Ferraro as the lead independent director.
Advance Auto Parts held its third annual bicycle build for the Salvation Army of Roanoke at the company’s headquarters in December. A total of 250 new bicycles were assembled by more than 100 of the company’s team members. The new bicycles were then donated by the Salvation Army to local children in need. Tianna Cohen-Paul has been named the vice president of admissions for American National University. She had served as an executive president of institutional governance and Cohen-Paul educational partnership within the ministry of education in India and divisional president of enrollment and business operations. Shonny Cooke has been named the executive director of career support services for American National University. She had been with the Virginia Job Corps and Virginia Western Community Cooke College working with career and employment services.
Justin Mercer has been appointed the director of distance education support services for American National University. He was most recently the director of orientation and retention at Liberty University in Lynchburg.
Myers
Cox Communications has announced that J.D. Myers II has been named senior vice president and region manager of Cox Virginia operations. He has been serving as an interim in that role since January 2015.
Urgent care clinic AFC-Doctors Express recently selected B2C Enterprises as its advertising and marketing agency. The Doctors Express office is located at Towers Shopping Center in Roanoke and will work with B2C Enterprises to market services and lead its upcoming brand conversion. Firefli was recognized with a gold Summit Award at the 14th annual Blue Ridge Chapter of the Public Relations Society of America’s Summit Awards Gala. The agency received the award in the social media category for the “What’s Your Bot-e-type?” social media sweepstakes for the Botetourt County Office of Tourism.
Hamilton
Hollins University has named Jason D. Hamilton vice president of enrollment and marketing. He began his duties in February and comes to Hollins from the Arkansas Commitment Program, where he served as executive director.
ROANOKE BUSINESS
35
SPONSORED CONTENT | Roanoke Regional Chamber of Commerce Susan K. Still, president and CEO of HomeTown Bank, was elected to the board of directors of the Federal Reserve Bank of Richmond for a three-year term as a Class A Director. Each Federal ReStill serve Bank has a nine-member board of directors. HomeTown Bank celebrated 10 years of local banking in November. During the past decade, HomeTown Bank has grown to nearly a half billion dollars in assets through six branches serving Roanoke, Salem, Smith Mountain Lake, and New River Bank in Christiansburg. Jefferson College of Health Sciences presented Carilion Clinic President and CEO Nancy Howell Agee with an honorary doctor of humane letters degree at the institution’s winter commencement ceremony in December. Only one other individual has ever been given an honorary doctorate by the college. The Virginia law firm Johnson, Ayers & Matthews PLC has announced its ranking in the 2016 Best Law Firms. The rankings are given each year by U.S. News & World Report and Best Lawyers. The firm received its Tier 1 ranking in the practice areas of eminent domain and condemnation law, insurance law, personal injury litigation – defendants, and railroad law. The firm earned Tier 2 rankings in the practice areas of appellate practice, commercial litigation and litigation – real estate for the Roanoke metropolitan area.
vices for businesses, site selection consultants and corporate real estate executives. Site selector is a configuration of Esri’s ArcGIS software and JavaScript and allows users to more readily access comprehensive property information in one convenient location. Site selector can be found on the Economic Development website under the sites and buildings menu at www. yesroanoke.org. The new application may also be found in the Maps & Apps Gallery through the county’s GIS page at www.roanokecountyva.gov/GIS. The Association of School Business Officials International has awarded Roanoke County Public Schools its Meritorious Budget Award for excellence in budget presentation during the 2015-2016 budget year, marking the 10th straight year the school system has received this honor.
Tower
Agah
The law firm Spilman Thomas & Battle has announced that attorney King F. Tower recently was named to Virginia Business magazine’s 2015 Legal Elite list for labor and employment law. Masoud Agah, professor of electrical and computer engineering in the College of Engineering at Virginia Tech, has been named the Virginia Microelectronics Consortium Professor of Engineering by the Virginia Tech board of visi-
tors.
LeClairRyan has announced that 24 attorneys in 13 of 18 practice areas were selected by their peers for inclusion in 2015’s Legal Elite published by Virginia Business magazine. LeClairRyan’s Roanoke attorneys who were selected include: Kevin P. Oddo, civil litigation; Joseph M. Rainsbury, appellate law; and Lori D. Thompson, family/domestic relations.
Michael Bertelsen, former director of international research, education and development at Virginia Tech, has been conferred the title “director emeritus” by the Virginia Tech board of visitors. He Bertelsen has been a member of the Virginia Tech community since 1995.
All four LewisGale Regional Health System hospitals were named among the nation’s 2014 Top Performers on Key Quality Measures by The Joint Commission, the leading accreditor of health-care organizations in America. Only 32 percent of accredited U.S. hospitals earned this status for 2014; 34 Virginia hospitals were named. The hospitals were recognized based on 2014 data reported about evidence-based clinical processes linked to better patient outcomes for certain medical conditions and procedures: LewisGale Medical Center – heart attack, heart failure, stroke, pneumonia and surgical care. The four hospitals are: LewisGale Hospital Alleghany – pneumonia and surgical care; LewisGale Hospital Montgomery – heart attack, stroke, pneumonia, venous thromboembolism and surgical care; and LewisGale Hospital Pulaski – stroke, pneumonia, venous thromboembolism and surgical care.
Virginia Tech has hired Kimberly Blair as a principal gifts officer. In this role, a new position within university development, Blair will manage a portfolio of principalgift prospects and will plan and Blair implement initiatives to identify, cultivate, solicit and steward prospects and donors.
The Roanoke County Department of Economic Development has launched a new site selector Web application that will provide enhanced ser36
FEBRUARY 2016
Y.A. Liu, who holds an Alumni Distinguished Professorship, is the 2015 Carnegie Foundation for the Advancement of Teaching Virginia Professor of the Year. The Council for Advancement and Liu Support of Education administers the highly selective U.S. Professors of the Year program. The Virginia Tech College of Science has welcomed 12 tenured and tenure-track faculty members to its ranks. New faculty members are: Jing Chen, assistant professor; Caroline Jones, assistant professor; and Shihoko Ko-
jima, assistant professor in the Department of Biological Sciences; Nicholas Mayhall, assistant professor in the Department of Chemistry; Alec Smith, assistant professor in the Department of Economics; Ryan Pollyea, assistant professor, and D. Sarah Stamps, assistant professor in the Department of Geosciences; Timothy Warburton, the John K. Costin Faculty Chair, and Honghu Liu, assistant professor; Edwin Barnes, assistant professor; Sophia Economou, associate professor; and Sara Petty, assistant professor; in the Department of Mathematics. Four Virginia Tech faculty, including three from the College of Science and one from the College of Engineering, have been named Fellows of the American Association for the Advancement of Science, the world’s largest scientific society. Timothy Long and Joseph S. Merola, professors with the Department of Chemistry; J. Donald Rimstidt, a professor emeritus in the Department of Geosciences; and S. Ted Oyama, a professor of chemical engineering, are among 347 scholars elected to the association in 2015. Ken McCrery has been named deputy executive director for Virginia Tech’s Technology-enhanced Learning and Online Strategies, a unit of Information Technology. McCrery Mark G. McNamee, recently retired senior vice president and provost at Virginia Tech, has been conferred the title “senior vice president and provost emeritus” by the Virginia Tech board of visiMcNamee tors. He has been a member of the Virginia Tech community since 2001. Menah Pratt-Clarke, former associate chancellor for strategic affairs and the associate provost for diversity at the University of Illinois at Urbana-Champaign, has been named vice provost for inPratt-Clarke clusion and diversity and vice president for strategic affairs at Virginia Tech. The IEEE Power and Energy Society recently voted Saifur Rahman president-elect for calendar years 2016 and 2017. He will serve as the president of this society for 2018 and 2019. Rahman is the Rahman Joseph R. Loring Professor of Electrical and Computer Engineering and director of the Virginia Tech Advanced Research Institute, National Capital Region. Jeffrey Reed, professor of electrical and computer engineering in the College of Engineering at Virginia Tech, was reappointed the Willis G. Worcester Professor of Electrical and Computer EngiReed neering by Virginia Tech President Timothy D. Sands and Executive Vice President and Provost Thanassis Rikakis.
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