THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, June 30, 1995 TAG: 9506300499
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY JASON HIDALGO, STAFF WRITER
LENGTH: Medium: 77 lines
A Norfolk-based manufacturer is moving part of its operation to Virginia Beach in the midst of discussions by the two cities not to raid each others businesses.
The company, General Foam Plastics Corp., said it plans to shift 200 of its 1,200 employees from Norfolk to Virginia Beach. Further expansion plans, which could add 1,000 workers, are slated for Virginia Beach, city officials said.
General Foam and Virginia Beach officials insist that the move does not undermine efforts for cooperation among Hampton Roads cities to promote the region and to refrain from courting each others' businesses. Norfolk officials do not seem too bothered by General Foam's move, either. The company, which manufacturers products such as inflatable swimming pools and seasonal items such as Christmas trees, said it doesn't have room to expand its existing plant in Norfolk.
``We did not actively recruit General Foam,'' said Donald Maxwell, director for economic development at Virginia Beach. ``The company actually approached the Virginia Beach Development Authority.''
Maxwell said the company's expansion into Virginia Beach is good for Hampton Roads because it ensures that General Foam will stay in the region.
``They could have just moved out of Hampton Roads.''
Maxwell cited Virginia Beach's potential for land expansion and rail access as the main reason for the city's selection.
``General Foam couldn't expand their facility in Norfolk,'' Maxwell said. ``They also approached a couple of cities in the area but found that Virginia Beach suited their needs best.''
Thomas Bailey, superintendent of new products and process development for General Foam, said the company wanted to expand in Norfolk but was landlocked.
``We worked hard with Norfolk in finding more land, but there really just wasn't any available,'' Bailey said. ``We also made sure Norfolk was aware of what we were doing. We didn't go behind Norfolk's back.''
The East Princess Anne Road facility in Norfolk will remain in operation, Bailey said. About 1,000 employees will continue to work there.
Judy Begland, assistant economic director for Norfolk, said the city understood General Foam's entry into Virginia Beach.
``We think the company's decision to go to Virginia Beach is very reasonable,'' Begland said. ``It's actually very positive because it exemplifies how a lot of businesses in Norfolk are experiencing good economic times.''
General Foam's expansion in Virginia Beach will be done in two phases.
The first phase involves the development of 27 acres, four acres of which will come from the Oceana West Corporate Park, purchased through the Virginia Beach Development Authority. The remaining land will be purchased from the Taylor Group of Virginia Inc. Two facilities, each occupying 200,000 square feet, will be built as part of the first phase.
The second phase involves an additional 30 acres that General Foam has the option to buy from the Taylor Group should it decide to expand further.
``It's just a guarantee so we don't get landlocked again,'' Bailey said.
If the second phase goes through, General Foam will build two more facilities, each occupying 300,000 square feet.
Maxwell said General Foam would create 200 jobs in its first phase, on top of the 200 jobs coming from Norfolk. If the company decides to go through with its second phase, Maxwell said the company could create 1,000 jobs.
The Virginia Beach Development Authority recently approved $400,000 from its Economic Development Investment Program to assist with the General Foam expansion.
Maxwell said Virginia Beach is expecting a return of $135,000 through real estate, personal-property and machinery taxes from General Foam's first year of operation.
If General Foam proceeds with the second phase, the city will receive even more revenue, Maxwell said.
The construction of the access road will open up 270 acres of land for other development, he said.
``It's basically a win-win situation for Virginia Beach,'' Maxwell said. ``It's a good venture for the city.'' by CNB