inroads

a quarterly publication of the hampton roads economic development alliance

2009 QTR 3

CHAIR Mike Barrett Runnymede Corp.

VICE CHAIR Robert BrownRobert Brown and Associates

TREASURER Bob BoydBB&T

SECRETARY Rick Bagley Wachovia Securities

President & CEO Darryl Gosnell

Senior Vice President Amy Parkhurst

Vice President Thomas Clemens

Vice President Steve Cook

Operations Debbie Ogan& Technology Director

Investor Sarah CavanaughDevelopment Director

Research David Gray& Information Services

Business Recruitment Chris Gullickson

Marketing Lisa LitwillerCommunications

Executive Kate RodenhouseAssistant

International Consultants

China Catherine Magill

Germany Ingo Bentz

United Kingdom Charles Macdowell

staff

officers

500 Main Street | Suite 1300

Norfolk, VA 23510

T +1 757 627 2315

11820 Fountain Way | Suite 301

Newport News, VA 23606

T +1 757 627 2315

4 East Bank House | Tide Mill Way

Woodbridge, Suffolk IP12 1BY UK

T +44 1394 610022

World Trade Center | Birkenstrasse 15

28195 Bremen, Germany

T +49 421 174660

Darryl Gosnell, President & CEO

FROM THE PRESIDENT’S DESK

We are in the home stretch of 2009, and the Alliance anticipates an active

and productive fall.

During the 3rd quarter of this year our business recruitment team traveled

to several U.S. and European cities promoting Hampton Roads at some excit-

ing venues. In July, the Alliance, sharing the venue with VEDP and the Greater

Richmond Partnership, hosted a special event at Wimbledon in the U.K. and

was able to secure several corporate appointments during the week-long

occasion. We also conducted marketing missions to the New York area and

Western Canada. The month of August included a

consultant mission to New York and New Jersey and

a marketing mission to Washington, D.C. and Mary-

land. In September we visited Germany and Austria,

a trip that incorporated visits to Munich, Karlsruhe,

Heidelberg, Freiburg, Salzburg, Linz and Vienna in

order to meet with several corporate headquarters

with operations in Hampton Roads. September also

saw our marketing team attend the Defence Systems

& Equipment International Exhibition in the U.K., conduct a Kansas marketing

mission and participate in the IAMC Professional Forum in Minneapolis.

The combination of these marketing activities culminated in 17 new busi-

ness contacts, 76 corporate appointments and 13 consultant appointments.

In addition, HREDA’s project managers worked on 14 new inquiries and

hosted 13 client visits.

As you are no doubt aware, recent headlines have indicated that Virginia

has weathered the weakened economy better than most states; and the Al-

liance is optimistic Hampton Roads will continue to fare well. We are seeing

our efforts of the past several months yield hoped-for tangible results, while

continuing to add new projects to our pipeline. And of course, we remain

grateful to our partners for their ongoing support. With the force of our com-

bined efforts, we can – and will – successfully promote Hampton Roads as

the premiere location for business relocation and expansion.

inroads is a quarterly publication of the Hampton Roads Economic Development Alliance. Comments and suggestions should be forwarded to Lisa Litwiller at llitwiller@hreda.com.

“Face-to-Face contact is the broadest bandwidth communication

you can have in professional life.”

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ork

Washington, DC Marketing Mission (8/09)

NY/NJ/CTMarketing Mission (7/09)

DSEi, London (9/09)

Munich, Germany Marketing Mission (8-9/09)

Wimbledon & Corporate Appts. (7/09)

Western Canada Marketing Mission (7/09)

NY/NJ Consultant Mission (8/09)

“Our battered suitcases were piled on the sidewalk again; we had longer ways to go. But no matter, the road is life.”

– Jack Kerouac, Author, Painter, Poet

The following is an excerpt from Harvard Business Review, June 2009 Report 1

2,300 Harvard Business Review (HBR) subscribers were surveyed and 79% rated in-person meetings as the

most effective way to meet new clients to sell business while 89% said face-to-face meetings are essential for

sealing the deal and almost all, 95%, said such personal interac-

tions are a key factor in successfully building and maintaining

long-term relationships. In shaping new business opportunities,

you need to see the body language to get a view as to whether

or not what is being proposed is being processed and, ultimately,

is acceptable. The non-verbal communication is equal to, if

not more important than, the verbal. This is especially true when working in the international arena where body

language is often crucial to communicate perspective.

All savvy business leaders recognize that travel is an investment - an investment of time and money and an

investment in your clients that helps to align and speed up decision making. More than ever, it is an investment

worth preserving.

1 A Report by Harvard Business Review Analytic Services: Managing Across Distance in Today’s Economy

Can Your Company Afford NOT to Travel?

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k

Steve Cook participated in a

marketing mission to the Kansas

City region with VEDP’s Steve

Bridges in September. One of

the more interesting companies

they met with was Impact Design,

an embroidery and art needlework

facility located on site at the Lan-

sing Correctional Facility in Lansing,

Kansas. The company employs ap-

proximately 300 inmates in the de-

sign and production of artwork for

all types of apparel for colleges and

universities, golf clubs, high school teams, etc. Interestingly enough, the first item the visiting team noticed

as they entered the workroom was a Virginia Tech polo shirt at the embroidery station! Due to the success of

their innovative company, Impact Design is researching expansion options in the Mid-Atlantic.

HREDA and VEDP Visit Correctional Facility in Kansas

Impact Design Researching Mid-Atlantic Opportunities

During the second week of

July Amy Parkhurst and Sam

Workman (Newport News)

covered a lot of territory in the

Northeast conducting 14 corpo-

rate appointments in New York,

New Jersey, Connecticut and

Pennsylvania. Six companies

indicated an interest in investigat-

ing Hampton Roads for a future

expansion or relocation in the

next 1 to 3 years. Many cited

the high costs of doing business

in the Northeast as an incentive

for considering a more business

friendly location.

A late July marketing mission

to Vancouver, BC, Canada’s larg-

est metropolitan area, found Tom-

my Miller (Franklin-Southampton)

and Thomas Clemens facilitating

14 appointments with maritime,

distribution and computer sci-

ence related industry corporate

decision makers. Prompted by

government initiatives and incen-

tives, the Canadian based high

tech sector is enjoying a boom.

“From start-ups to expansions

companies are beginning to seek

out more centralized customer

support locations to better serve

their ever-broadening base of cli-

entele; many with operations on

the eastern coast of the United

States,” said Clemens. “And we

want them to think of Hampton

Roads as their location solution.”

This was the Alliance’s third mis-

sion to Canada and second to

Vancouver this year.

Carla Howard (Norfolk) and

Scott Hall (Virginia Beach) ac-

companied Steve Cook in Au-

gust to the New York City/New

Jersey metropolitan area to

meet and update consultants

on the latest and greatest hap-

penings in Hampton Roads.

Detailed planning resulted in

successful meetings with 11

representatives from 8 differ-

ent companies. “This trip was

such a great experience,” said

Carla. “I love sharing the excit-

ing things happening in Norfolk

and the region. The meetings

gave me a fresh perspective on

how consultants view Hamp-

ton Roads.”

Mission Briefings: The Northeast, Canada and the Midwest

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orkFor a third consecutive year

the Alliance hosted select cli-

ents, contacts and consultants

to view world-class tennis at

Wimbledon’s Grand Slam tennis

tournament. This traditional,

high profile event is consistently

well received and provides our

team a unique opportunity to

engage and entertain British cli-

ents with whom the Alliance has

developed business relation-

ships throughout the year.

This year’s VIP guests rep-

resented 7 projects considering

Hampton Roads as an expansion location. Amy Parkhurst and Charles

Macdowell, HREDA’s U.K. consultant, represented the region at the July

2 event held at the historic All England Lawn Tennis Club.

United Kingdom - All England Lawn Tennis Club

Designed to thank

companies and decision

makers for their invest-

ment in our region Darryl

Gosnell, Thomas Clem-

ens, Scott Hall (Virginia

Beach) and Tom Elder

(Chesapeake) embarked

on a brand new type of

marketing mission. In late

August, the delegation,

divided into two teams,

covered 3,200 miles in 5

days visiting German and

Austrian headquarters of

companies with opera-

tions in Hampton Roads. The meetings, 11 in all, provided face-to-face opportunities to engage and thank

business leaders for their investment in our region. And the sentiment was returned. The corporate hosts

expressed sincere appreciation for the team’s investment of time and resources to become more familiar with

their companies, operations and future plans.

Headquarters Visit - Germany and Austria

The Power of Gratitude HREDA Team visiting Plasser & Theurer’s headquarters in Linz, Austria.

Pictured above, from left: Allan Edwards (Frontline Engineering), Matt Hatson (Babcock), Gerry Fabian (SELEX), Amy Parkhurst (HREDA), Jeff Taylor (De-fence Manufacturer’s Association -DMA), Simon Walstrom (QinetiQ)

Pictured above L-R: Joseph Neuhofer (President, Plasser American Corporation Chesapeake); Patrick Vierlinger (Export, Plasser & Theurer, Vienna, Austria); Tom Elder (City of Chesapeake); Robin Laskowski (Vice President, Secretary/Treasurer, Plasser American Corporation Chesapeake).

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kDefence Systems & Equipment International (DSEi)

Hampton Roads knows defense. And, HREDA

knows Hampton Roads. So, it is not uncommon for

the Alliance’s marketing calendar to contain a fairly

large number of defense related events. Attendance

at September’s Defence Systems & Equipment Inter-

national (DSEi) in the U.K. marked the fourth out of six

such events scheduled in 2009.

As the leading integrated defense and security

exhibition in the world, DSEi provides a forum for all

those concerned with defense, security and military

aerospace to meet with senior international trade and

military experts. The event offers a valuable platform

for attendees to view the latest systems and equip-

ment from the world’s defense and security industry.

Among the 29,000 attendees from over 40

countries at the 8-11 September U.K. conference

were HREDA team members Chris Gullickson and

Charles Macdowell, Jim Noel (York County) and

Steven Wright (Chesapeake). The tireless delegation

facilitated appointments with 16 different companies

and learned the following perceptions and/or factors

are regarded as regional strengths: our pro-military

representation in D.C. via Forbes, Webb, Allen and

Nye; the large number of primary (tier one) defense

contractors; and the fact that every branch of the

military is represented in Hampton Roads.

“Golden nuggets of potential projects are still out

there,” Macdowell commented. “We just have to sift

deeper to find them. At the moment, British interest

in the U.S. is highest in the defense sector, which ap-

pears to be unaffected by the economic downturn.”

“Although the economy has suffered, the U.S.

defense industry is strong with a budgeted defense &

homeland security spending for 2010 at over 600 bil-

lion dollars,” noted Gullickson. “Many of the compa-

nies we met with expressed an immediate need for a

U.S. location. And, we are happy to report, one such

company has already scheduled an October visit to

Hampton Roads.”

According to a report featured in the September 15th Virginian-Pilot, Hampton Roads’ economy is considered in the top 20 of the nation’s 100 largest metro areas. And, according to Alan Berube, the Brooking Institute study’s coauthor, the region’s significant concentration of defense and government related industry is the most important contributing factor.

Pictured above, L-R: Chris Gullickson (HREDA), Charles Macdowell (HREDA U.K. Consul-tant), Steven Wright (City of Chesapeake), and Jim Noel (York County).

Pictured below, L-R: Aran Croker (Vice President of the Americas, Astute) and Geoff Hill (Manager Director, Astute) at the Astute booth.

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ort

3rd Quarter YTD TOTAL 2008

PROJECTS Total Active 129 N/A 129

New 19 38 38

PROSPECT VISITS

Total 13 32 39

New 10 24 27

Repeat 3 8 12

RECRUITMENTACTIVITIES

Trips 9 35 48

Appointments 89 246 269

Contacts 17 194 n/a

ANNOUNCEMENTS Total 0 5 4

Capital Investment 0 $22,850,000 17,820,000

Jobs Created 0 286 63

Square Footage 0 109,200 326,300

third quarter report

The trade relationship between the U.S. and the United Kingdom is the strongest in the world, and Britain

is the largest foreign investor in the U.S. economy, valued at $300 billion. However, British business is typically

more focused on services as compared to manufacturing. As a result, British investment activity has tended to

take place in financial centers like New York or Chicago, and biased towards acquisition – like HSBC’s pur-

chase of Household – instead of organic expansion.

The current economic climate is impacting investment into the U.S. The UN’s World Investment Report

stated that direct investment between developed nations experienced a downturn of 60% in the first quarter

of 2009, while investment in developing nations fell 25%. In the U.K., business investment slumped by 10.4%

between the first and second quarter of this year, the biggest drop since 1985. Annually, the decline is the

largest on record since 1967.

The effects the Alliance is facing with our marketing activities in the U.K. are:

- Fewer companies prepared to risk ‘stretching their wings’ across the Atlantic, preferring to focus on

their domestic markets;

- Greater difficulty in raising sufficient finance for a new U.S. operation or expansion;

- Slowing of the pipeline of projects already under consideration – although not many have cancelled

their plans altogether;

- Greater interest in lower risk methods to enter the U.S. market, through JVs, partnerships and the

licensing of IP.

Due to the region’s favorable business climate and low cost of doing business, Hampton Roads remains

attractive to British companies. But, the lack of direct transatlantic air service is seen as our single greatest

disadvantage.

A View from Across the PondCharles Macdowell, HREDA’s U.K. Consultant’s Update to the Board September 24, 2009

HREDA operates on a calendar fiscal year; therefore YTD reflects January through September 09

500 Main Street, Suite 1300Norfolk, VA 23510

inroads

Investor Calendar Notes All meetings scheduled for 8:30 AM unless indicated October 22 Executive Committee MeetingDecember 10 Board Meeting, VMASCJanuary 14, 2010 Annual Meeting of Investors

Safco Celebrates New Operation in Isle of Wight

Safco Products Co., a division of Liberty Diversi-

fied Industries, is the newest tenant in IOW’s Intermodal

Park occupying 329,000 SQ FT of state-of-the-art distri-

bution space. A leading provider of organization and

comfort enhancing products for the workplace, Safco

serves as an importer and exporter for well-known

office and business retailers. At the grand opening

ceremony held last June, Liberty Diversified Industries

President Mike Fiterman complimented the profes-

sionalism of the IOW Board of Supervisors, County

staff and the county’s ability to simultaneously attract

quality business while maintaining its rural and aesthetic

beauty.

The Alliance introduced representatives of Safco to

the region in January 2008 and the project was officially

announced for IOW in July 2008.

Pictured above, L-R: Dan Zdon (Vice President of Liberty Diversified Industries and General Manager of Safco Products Company); Mike Fiterman (President of Liberty Diversified Industries) and The Honorable James B. Brown, Jr., Chairman of the Isle of Wight County Board of Supervisors.