Shenandoah Valley Business Journal June 2016

A Byrd Newspapers Publication

Volume 16, No. 8, June 28, 2016

Clear Skies, More Funds Spotl

ight o

n:

Nonp

rofits

Page 6

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

Harrisonburg, Va.

Inside This Issue The Shenandoah Valley Business Journal is a monthly publication of Rockingham Publishing Company, Inc., 231 S. Liberty St., Harrisonburg, VA 22801.

Editorial Staff

Focus Section: Nonprofits ■ Nonprofits Count On Special Events...............Page 6

Other Business News

■ Local Ledger..................................................Page 10

Managing Editor: Jerry Blair

Columns

Staff Writer: Vic Bradshaw, Kelly Clark

■ Investments by Matthew Frakes.....................Page 3 ■ Real Estate by Tim Reamer.............................Page 4

HARRISONBURG — Tom McGloon has joined the Union Mortgage Group as the manager of its Harrisonburg branch, according to a news release.

A James Madison University graduate with a degree in political science, McGloon has more than 12 years of experience in the mortgage industry, most recently working McGloon with First Bank after stints with TowneBank Mortgage and StellarOne Bank.

In his new role, he’s responsible for helping customers with the home-financ-

ing process; developing relationships with leading builders, developers and real estate agents; and growing Union’s sales team for the Harrisonburg and Rockingham County area.

Union Mortgage Group is affiliated with Union Bankshares Corp. (NASDAQ: UBSH). Its local office is in the Union Bank & Trust office at 390 University Blvd.

By fax: 433-9112 By phone: 574-6267 (news) 574-6229 (ads) On The Cover:

Contributing Photographers: Daniel Lin, Austin Bachand

McGloon Named Manager At City Union Mortgage Group

By mail: Shenandoah Valley Business Journal P.O. Box 193 Harrisonburg, VA 22803 By email: svbjnews@dnronline.com

■ Valley Home Care Merges With N.C. Network......Page 5

Editor and General Manager: Peter S. Yates

Contact us

Daniel Lin / DN-R Cargill employee Mark Lauro of Harrisonburg bowls a frame under the black lights during Bowl For Kids’ Sake, an annual fundraiser for Big Brothers Big Sisters, at Valley Lanes in Harrisonburg in March 2015.

United Bankshares Ups Dividend

Cool Breeze Farm Opens Market

HARRISONBURG — J. Merle Zook has returned to his former position as chief financial officer for Dynamic Aviation.

Zook has worked for the Bridgewater-based international aviation services and solutions provider since 1999, when he

HARRISONBURG — United Bankshares (NASDAQ: UBSI) announced that its board of directors have declared a second-quarter dividend of 33 cents per share for shareholders of record as of June 10, according to a news release. The dividend is payable July 1.

Headquartered in Washington, D.C., and Charleston, W.Va., United Bankshares is the parent company of United Bank. It operates 128 branches in Virginia, West Virginia, Maryland, Ohio, Pennsylvania and Washington, including three in Harrisonburg and one each in Bridgewater, Broadway, Elkton, Weyers Cave, Woodstock and Strasburg.

HARRISONBURG — Cool Breeze Farm has opened a six-day-a-week self-serve farm market at its stables in Mount Sidney.

The regenerative family farm is selling free-range eggs, pasture- and forest-raised pork, grass-fed beef, chemical-free vegetables and fruit, plants and other locally sourced items, according to a news release.

The market is open from 7 a.m. to 7 p.m.

Monday through Saturday.

Customers should go to the multipurpose room in the stables, adjacent to the indoor riding ring at the center of the farm at 273 Salem Church Road. Customers should take the items they want and put their cash or check payment in the locked money box.

A receipt book and checkout instructions are located by the box, and a phone number

See MOVERS, Page 11

— Vic Bradshaw

See SCENE, Page 3

— Vic Bradshaw

Zook Returns As Dynamic CFO

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

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Coping With The High Cost Of Education

O

ver the past decade, the cost of higher education has soared, yet the need to prepare young adults for a competitive job market remains more important than ever.

Despite the difficult costs of education, many Americans still don’t know about the benefits of 529 education savings plans.

Named after Section 529 of the Internal Revenue Code, a 529 plan is a tax-advantaged way to save, or even pay in advance, for college expenses.

By establishing a 529 plan now you’re not only taking advantage of a potential tax benefit, you’re giving a child a helping hand toward the skyrocketing cost of higher education.

A 529 comes in two varieties: a prepaid plan and a savings plan. A prepaid 529 allows the account holder to prepay all or part of the tuition and fees of an in-state college education.

Prepaid plans can also be converted for use at out-of-state colleges. For private colleges, there is a similar but separate plan known as the Private College 529 Plan.

This 529 savings plan works similar to a Roth IRA and offers investment options similar to mutual funds. Its value can rise and fall based on the performance of the investment option chosen.

Earnings in a 529 plan can be tax deferred, with withdrawals being exempt from federal and state income taxes if you use the funds for qualified expenses such as tuition, fees, room and board and

supplies. Many states also offer state tax deductions or tax credits on top of that.

More On Facebook

Federal Register, make it easier for rural business owners to qualify for funding from the department’s Business & Industry Guaranteed Loan Program.

The changes include allowing the use of the New Markets Tax Credit as a form of equity; allowing employees of a business to obtain loan guarantees to buy stock in a business by forming a worker cooperative or Employee Stock Ownership Plan; new scoring criteria that prioritize loans to businesses creating quality jobs, such as those with health care benefits; and expanded eligibility for projects involved in processing, distributing or marketing regionally produced foods.

Scene

FROM PAGE 2

is available if assistance is needed.

For more information, visit coolbreezefarms.com or the farm’s Facebook page.

— Vic Bradshaw

USDA Eases Rural Loan Rules HARRISONBURG — The U.S. Department of Agriculture has altered its rules to increase access to capital for rural businesses.

The changes, announced June 3 and published on page 35984 of that day’s

Broad Flexibility Another key benefit of 529 plans is their flexibility. Some investments that are used for education funding require that the assets be given to the beneficiary when they reach a certain age.

With a 529 plan, the owner of the account continues to make all of the decisions. For example, if the beneficiary suddenly decides not to go to college, you can choose a different beneficiary or use the plan for your own education needs.

The plan’s savings can also be used for any accredited in-state, out-of-state or international educational institution. And while some education investment vehicles have age restrictions, a 529 plan has none, so anyone can contribute to one.

Additionally, you can usually cover full college costs because the contribution limits per beneficiary generally exceed $200,000.

However, contribution limits vary by state, so it’s a good idea to connect with a financial adviser to confirm.

Potentially Significant Tax Benefits For tax-planning purposes, your 529 plan contribution is considered a gift to the beneficiary and qualifies for the $14,000 annual gift-tax exclusion, enabling you to make significant contributions without being charged the gift tax. Further, you can frontload your contribution to as high as $70,000 in one year ($140,000 for married couples), then

— Vic Bradshaw See SCENE, Page 5

Investments Matthew R. Frakes

distribute the gift-tax reduction over a five year period.

Assets, however, can accumulate and be withdrawn federally tax-free only if they are used to pay for qualified expenses – tuition, fees, room and board and supplies.

Nonqualified distributions are subject to income tax and a 10 percent federal income tax penalty.

These plans not only help reduce federal tax, they can reduce state income tax.

Thirty-four states, including the District of

Columbia, offer residents a full or partial tax deduction or credit for 529 savings plan contributions.

A few states even offer a state tax deduction whether you invest in that state’s 529 or not.

Article written by Wealth Management Systems Inc., provided courtesy of Matthew R. Frakes, The Frakes Group at Morgan Stanley, in Harrisonburg. Call 438-7909 or visit online, www. morganstanleyfa.com/thefrakesgroup.

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Tuesday, June 28, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Minimum Wage Push: A $15 Math Problem P

rotesters across the United States have been organizing in an effort to raise awareness of income inequality. Operating under the banner “Fight for 15,” organizers are demanding an increase of the minimum wage to $15 per hour, double the current federal rate of $7.25 per hour.

Political candidates have supplemented the voice of these activists and the large unions that back them. Most recently, Washington, D.C., pledged to join New York, Seattle, San Francisco and other cities to increase the minimum wage for at least some sectors.

California Gov. Jerry Brown signed a bill recently to phase in a statewide $15 minimum wage by 2022 and New York is expected to do the same in the near future.

They’re not alone: Many cities and states have embraced the conversation around an increased minimum wage.

Virginia is not one of them, but should there be an increase in the federal minimum wage, Virginia would likely match it. In the commonwealth, 50,000 employees earned exactly the prevailing federal minimum wage of $7.25 per hour in 2015, according to the Bureau of Labor Statistic. A large percentage of these workers are employed within the restaurant industry and this creates a math problem for all involved.

Mary Kay Henry, international president of the Service Employees International Union, recently stated in an article appearing in the Guardian newspaper: “There is not a price tag you can put on how this movement has changed the conversation in this country. It is raising wages at the bargaining ta-

Real Estate

Tim Reamer

ble. … I believe we are forcing a real to quadruple or more as their top line conversation about how to solve the number, but unfortunately, the math doesn’t change all that much — the grossest inequality in our generation.”

Without question, the SEIU and numbers are just bigger.

Large figures on the top line of fiFight for 15 have changed the conversation, if in no other way than there is nancial statements are often the cause actually a conversation. Moreover, it of misrepresentation. And while it makes for great protest can’t be disputed that signs and memes that these efforts have recan outrage the Twitsulted in increased Without question, terverse, there is often wages for some across a problem with the asthe SEIU and Fight the nation.

That said, putting for 15 have changed sumption that an independent restaurant a price tag on these the conversation, “made” $500,000 last results turns out to be if in no other way year or $12 million a quite easy, at least as day in the case of Mcfar as restaurants are than there is a Donald’s. concerned. conversation.

Simply, the problem A typical restauis, it isn’t true. rant realizes gross Restaurants, like revenues of $450,000 any other business, to $550,000 annually.

Some earn more, some less, but on av- have expenses, and gross revenues arerage an independent restaurant in the en’t profits. Within the restaurant inmarket will sell close to half a million dustry the cost of food, alcohol and ladollars in food, drinks, and other mer- bor divided by gross revenue is known as the Prime Cost and it is an unbelievchandise.

National chains often earn double ably important metric.

“

Most operators aim to keep this percentage of sales at or below 60 percent, but more often than not this combination of expenses slide closer to 65 percent. A prime cost that exceeds 65 percent is generally the sign of a failing restaurant, and if the percentage stays that high for a sustained period of time, it’s the kiss of death because the restaurant still has to pay for operational expenses and occupancy costs.

In total these two categories account for 30 percent of a restaurant’s budget.

Operational expenses, comprised of items like supplies, maintenance, repairs, fees, debt repayment, and marketing, take 20 percent of total revenue and occupancy costs (those associated with the real estate) require another 10 percent.

If you’re doing the math, you know total expense is already at 95 percent of the total gross revenues earned, leaving, on average, somewhere between 5 percent and 10 percent for the item that allows a business to remain viable.

For a business earning a very typical $500,000 per year, this means they will likely be rewarded with $25,000 to $50,000 for their investment, knowledge, and labor.

So, assuming a $15 minimum wage, imagine the typical restaurant described above has ten part-time employees each working an average of 20 hours per week and earning minimum wage. Under the current structure, annual labor costs for this restaurant would be $75,400.

A $15 minimum wage, however, See MATH, Page 9

“SELLING THE MOUNTAIN... AND THE VALLEY”

(540) 289-6335 (800) 931-0400 www.MassanuttenRealty.com View over 2000 Properties Jason Mitchell, Realtor

540-820-9517

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

Valley Home Care Merges With N.C. Network

Cadence Revenues Up

By KELLY CLARK

Scene

Daily News-Record

A medical supply provider for a Winchester-based health care network serving Shenandoah County has merged with a North Carolina-based home health company.

Advanced Home Care completed the acquisition of Valley Home Care, a branch of Valley Health, on June 1.

The mergWOODSTOCK er makes Valley Home Care the 13th health system member of Advanced Home Care’s network.

Valley Home Care provides home medical equipment and supplies to about 30,000 customers in the northern Valley and West Virginia.

It has four locations in Winchester, Front Royal and Woodstock.

Advanced Home Care is based

in High Point, N.C. It provides in- expand our commitment of providhome assisted living and hospice ing extraordinary care to patients services from 30 branch locations in the communities surrounding in North Carolina, South Carolina, Winchester,” he said. “This is an exciting addition to our Tennessee, Virginia and service area with quality Georgia.

“We’ve found staff members joining our Chris Rucker, a Valley Health vice president, that in order to team.” best serve Rucker said customers said the merger was shouldn’t expect a change needed to improve Valley patients, it’s in Valley Home Care’s Home Care’s ability to better to be quality of service, addserve the community.

“We’ve found that in part of a larger ing that joining a larger organization. network will give Valley order to best serve paHealth access to othtients, it’s better to be — CHRIS RUCKER er medical methods and part of a larger organiVALLEY HEALTH VP practices throughout the zation,” he said. “It inSoutheast. creases our buying power “We were running one … and will be part of our charitable mission to provide ser- health care business,” he said. “Now that we’re one of 12 other health vices when needed.”

Joel Mills, Advanced Home networks, we’ll have exposure to Care’s chief executive officer, said other thoughts and ideologies of in a June 1 press release the merg- how best to treat our patients.” er will let his company expand its home medical supply business.

Contact Kelly Clark at 574-6290 or kclark@dnronline.com “The addition ... allows us to

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FROM PAGE 3

Cadence: Revenue Up By 11 Percent STAUNTON — Cadence Inc. announced unaudited results for the first quarter of 2016 including an 11 percent increase in revenue compared to 2015 to $23.0 million.

Earnings per share declined 1 percent over prior year to 80 cents per share. Earnings before interest, taxes, depreciation and amortization were up 3 percent to $3.8 million.

Ken Cleveland, Cadence CFO, remarked in a press release that the year is off to a good start from a revenue perspective.

“Earnings growth is being challenged by a number of growth initiatives current being funded,” Cleveland stated.

At its April 25 meeting, the Cadence board approved a special dividend of $1 per share payable to shareholders of record April 25 on or before June 1.

Cadence, which has its corporate headquarters in Staunton, is a supplier of advanced products, technologies and services to medical device, life science, automotive and industrial companies worldwide.

See SCENE, Page 10

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Tuesday, June 28, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Nonprofits Count On Special Events Weather A Major Factor In Fundraising Success

By VIC BRADSHAW Daily News-Record

HARRISONBURG — You might not realize it, but rain, snow, ice and sometimes even sunshine can have a negative effect on area charities.

Local nonprofit organizations big and small rely on special events for significant funding, and weather conditions that affect attendance and total donations on event days can affect how well those groups are able to fulfill their missions.

The Harrisonburg-Rockingham Free Clinic, for example, counts on its annual Mardi Gras Gala Annual Benefit for $100,000. This year, Big Brothers Big Sisters of Harrisonburg-Rockingham County is depending on special events for nearly 30 percent of its operating funds, with Bowl for Kids’ The position you Sake its dominant moneydon’t want to find maker. yourself in from a K e i t h Gnagey, execnonprofit standpoint utive director is being an organization of the free that it’s sink or swim medical clinic in downtown unless you’ve got a Harrisonburg fundraiser that pays that serves the bills. city and county residents, said Frank Tamberrino, the organization Chamber of depends on its February gala for about 11 percent of its $900,000 annual budget, so a significant shortfall could mean a reduction in services. Because of its importance, a makeup date the weekend after the event is reserved so the medicine cabinet isn’t left bare.

“When you’re into that league,” he said of the organization’s $900,000 budget, “you’ve got to pay attention to the fundraising.”

Other civic organizations, such as the Harrisonburg-Rockingham Chamber of Commerce and Grottoes Ruritan Club, don’t require money from special events for operating funds. They use money they

“

Daniel Lin / DN-R

Blue Toad Hard Cider co-owner Scott Hallock (right) hands Matthew McNeal of Roanoke a freshly poured pint of hard cider on May 28 at the 16th annual ValleyFest Beer & Wine Festival at Massanutten Resort.

raise for scholarships or other community projects, or to defray some expenses.

Avoiding a reliance on special-event proceeds to keep a nonprofit functioning is important, chamber President Frank Tamberrino said.

“The position you don’t want to find yourself in from a nonprofit standpoint is being an organization that it’s sink or swim unless you’ve got a fundraiser that pays the bills,” Tamberrino said. “There are a lot of organizations, particularly when they’re small and someone’s started their pet charity, that if you’re just keeping the lights on as an organization and relying on a fundraiser or charity just to keep things going, then you’re in a precarious position. You want those dollars to go to programs or where they’re needed

instead of just keeping the lights on.”

Vital Source

Sue Totty, executive director of Big Brothers Big Sisters, said Bowl for Kids’ Sake and the recently added Start Something BIG breakfast became more important to BBBS in 2013 and 2014, when federal grant funding that had helped support programs disappeared.

With the mentoring fund money in place from the U.S. Department of Justice’s Office of Juvenile Justice, the local BBBS had a budget of $711,793 in 2012, $72,000 of which came from special events. It served 752 children that year.

By 2015, with all federal funding gone, the budget had shrunk to $494,095. It would have been lower if funds from the

bowling event and breakfast hadn’t grown to $121,000, and the extra $49,000 helped the organization serve 638 children that year.

“We maintained over 600 children served even though the federal money dropped,” said Totty, “because of the wonderful support of our community, in part with our event.”

The breakfast was created to build fiveyear pledges from community philanthropists, funds the organization can count on regardless of the weather. This year, she said, the October event is expected to provide $32,000 after expenses.

Inclement weather hasn’t been an issue for the organization since she arrived See NONPROFITS, Page 7

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Tuesday, June 28, 2016

7

BBBS Moving Toward Firm Ground Nonprofits

FROM PAGE 6

in 2011, but Totty said it wouldn’t be able to serve as many children if Mother Nature took a big bite out of Bowl for Kids’ Sake’s take.

Going forward, Big Brothers Big Sisters should be on firmer financial ground.

Having raised more than $100,000 via special events for four consecutive years, Totty said the organization can count on steady revenue from the bowling and breakfast fundraisers and expects to receive about $100,000 annually following the grant-fund restoration.

April’s bowling fundraiser will contribute about $115,000 toward this year’s operations, meaning the two special events will combine to provide nearly $150,000 of the $508,000 the local BBBS chapter expects to spend this year.

Bowl for Kids’ Sake, however, might have provided a bigger boost

if it weren’t forced to move from its normal February or March time frame to April 23 because Valley Lanes was booked.

“We did extremely well this year,” said Totty, “but I think we would have done better if we’d been back in March. It was a beautiful day in April, and there were a lot of competing activities and a lot of outside activities going on. People were anxious to be outside and maybe not thinking of bowling inside.”

Mitigating Risk Fundraising is the lifeblood of the Harrisonburg-Rockingham Free Clinic.

Gnagey said the 25-year-old health care organization receives 16 percent of its funding from Virginia governmental sources. The remainder comes from donations from people and community groups, private grants, fundraising events other See NONPROFITS, Page 8

Austin Bachand / DN-R

Boris Ozuna (left) helps Sonia Funez, 8, both of Harrisonburg, pick out a bowling ball for the ‘70s-themed Bowl for Kids’ Sake 2016 fundraiser for Big Brothers Big Sisters at Valley Lanes in Harrisonburg on April 23.

Sonia is a little sister in the program.

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

Harrisonburg, Va.

Some Don’t Depend On Fundraisers Nonprofits

FROM PAGE 7

groups hold on the clinic’s behalf, and the Mardi Gras gala.

The money is welcome because of the importance of the clinic’s work.

“We are this community’s response to safety-net healthcare,” Gnagey said.

The gala was postponed in 2015 because there was about 18 inches of snow on the ground, Gnagey said, and the clinic didn’t have its backup weekend in place at the time. However, the Spotswood Country Club was open the following weekend, as was the band scheduled to perform and the evening’s master of ceremonies, so the event was held seven days later.

The potential cancellation of an event so important to the clinic’s finances led to the establishment of the makeup policy.

“It’s a strategy,” Gnagey said, “to help us mitigate the risk of a special event.”

While most event sponsors and ticket buyers probably wouldn’t ask for their money back were a gala canceled, those aren’t the only funding streams the event provides. A silent auction and a live auction for donated items help boost the total raised.

Community Good Other organizations don’t need event fundraisers for their operations but raise money to benefit the community.

Mark Keeler, president of the Grottoes Ruritan Club, said it counts on Caroling in the Caverns to provide $1,000 for the scholarship it awards a graduating high school senior who lives in the Grottoes ZIP code. The Ruritans also collect supplies for South River Elementary School’s Boys & Girls Club chapter at the event, during which visitors see brief performances by three acts inside Grand Caverns.

Last year was their best yet, with $2,150 collected in admissions and 178 arts and crafts items donated as the admission fee for children.

With five events under their belt, Keeler said varying weather conditions haven’t prevented guests from making their way to the caverns in December, which requires a walk up a steep incline to reach the entrance.

“We have not seen as much swing as we thought we would,” he said.

Austin Bachand / DN-R

The Mosaic Handbell Ensemble per forms during the Grottoes Ruritan Club’s Caroling in the Caverns event inside the Grand Caverns in December 2015.

The American flag flies in on a zip line to honor Memorial Day during the 15th annual ValleyFest Beer & Wine Festival at Massanutten Resort on May 23, 2015.

Austin Bachand / DN-R

The club has considered establishing a makeup date but hasn’t yet, Keeler said. There’s also been talk about adding a second day to accommodate the growing turnout but organizers have not opted to do so.

The chamber charges for many of its events, such as its annual banquet, but Tamberrino said the goal for most is to cover expenses.

“Anything we do that has a net profit,” he said, “allows us to do a little bit more that year or keep member dues down over time.”

That, however, is not the case for the ValleyFest Beer and Wine Festival or its annual golf tournament. The business organization clears between $10,000 and $20,000 from those events annually.

The money, Tamberrino said, is used to fund scholarships and awards the chamber supports as well as chamber educational efforts, such as its leadership classes and breakfasts featuring area legislators or college presidents.

If not for the fundraisers, venue rental costs for the breakfasts and other event expenses would have to come from other sources.

“As long as it’s educational,” he said, “we can use the money to cover some of those costs. The bottom line is that if we didn’t make money off ValleyFest or the golf tournament, we’d have to charge significantly more for membership.”

Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

9

Not All Job Losses Attributed To Labor Costs Result From Innovation Math

FROM PAGE 4

pushes labor costs for the same employees to $156,000 annually, for a difference of $80,600 and substantially more than the remaining revenue previously allocated to profit.

In other words, under this scenario, a restaurateur, theoretically, would have to be willing to pay $30,000-$60,000 per year out of pocket to operate their business. This is without considering the fact that other hourly employees earning greater than minimum wage and even salaried employees associated with the business will likely expect a commensurate increase in pay.

If everyone else were receiving a raise, wouldn’t you want one, too?

Of course, there are other options: The owner could choose to increase prices and seek out opportunities for purchasing efficiencies to increase margins.

But let’s be honest, you’re not willing to pay substantially more for your pizza and most businesses operating in

a competitive landscape aren’t so bloat- ical unemployment. ed that they can choose to stop wasting We see examples everyday from money that would have otherwise been self-checkout and ATMs replacing clerks profit. to automation replacing large portions of No, historically, the industrial sector with when the cost of anya thousand more historic thing increases we tend examples. So it shouldn’t [H]istorically, when to purchase less of it and come as a surprise that the cost of anything when the value of someWendy’s and others are increases we tend to thing falls below that considering self-checkout purchase less of it and kiosks in addition to moof a comparable priced alternative, we tend to bile and payment apps when the value of choose the alternative. as a means to reduce exsomething falls below This is fairly universal; penses. ... a comparable priced it doesn’t matter whethAt the corporate level, er it’s cheese steaks or alternative, we tend to some of the bigger chains employees. choose the alternative. are likely to have the Look, this isn’t an capital reserves to impleattempt at fear monment this strategy, but gering, the data is pretwhat about the franchity clear. Meta-analysis of 105 differ- sees (who have all of the same expenses ent economic studies of labor demand described above in addition to marketing suggests that an increase of only 10 fees and royalties that require another 6 percent in the wage rate for low-skill percent of gross revenues) and indepenworkers is likely to cause 6.35 percent dent restaurants? of such jobs to be lost. Some of these job Do they have the capital reserves to losses would be classified as technolog- implement this type of strategy? Likely

“

not. It’s pretty clear they typically don’t have the margins.

Not all job losses attributed to labor costs are a result of innovation as would be in the case with Wendy’s. Some are a result of failure of the business to control expenses and controlling expenses becomes exponentially more difficult when they are legislated.

These types of debates can become emotional and emotions tend to push people to the extremes that result in oversimplifying the debate to lazy people versus greedy rich guys. In this case and in reality, the problem is less about greed versus entitlement or worth versus value.

It’s about math and therein lies the problem.

Tim Reamer provides commercial real estate brokerage and consulting services with Cottonwood Commercial and specializes in retail representation, investment property (multifamily | commercial | NNN), and development projects. Learn more at www.timreamer.com.

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, June 28, 2016

Employs 475 Scene

Local Ledger

FROM PAGE 5

The company employs more than 475 people worldwide with other locations in Cranston, R.I., Pittsburgh, Sturgeon Bay, Wis., Plymouth, Mass., and in the Dominican Republic.

— Staff Reports

WAW Named In Best Of Issue HARRISONBURG — Wharton Aldhizer & Weaver PLC was named one of Virginia Living Magazine’s Best of Virginia for 2016.

The firm was selected as one of the top three Best Law Firms in the Shenandoah Region by readers and the only firm selected in Harrisonburg.

Best of Virginia 2016 lists the nearly 1,500 winners from Virginia Living’s fifth annual Best of Virginia Readers’ Survey, conducted in January. More than 30,000 ballots were cast in 100 categories covering the best in arts, culture and entertainment, living and recreation, shopping and services and food and drink.

Wharton Aldhizer & Weaver is a full-service law firm with offices in Harrisonburg and Staunton that serves individuals and businesses in the Shenandoah Valley and the mid-Atlantic.

— Staff Reports

Farm Bureau Mutual Lauds Agents HARRISONBURG — Four agents serving the region and one agency manager recently were recognized by the Virginia Farm Bureau Mutual Insurance Co. Jerry Funkhouser of Farm Bureau of Shenandoah County was one of six people honored as the 2015 Most Valuable Agent of the Year for their respective districts.

Funkhouser, Shenandoah County colleague Eric Dalke, Garnett Brockman of Page County Farm Bureau and Craig Chrisman of Augusta County Farm Bureau were among 38 people who earned Master Agent designations for their work last year.

Additionally, Jon Dean, who manages the agency that covers Shenandoah and eight other counties, was selected as the Master Agency Manager recipient.

Virginia Farm Bureau Mutual helps meet the insurance needs of families, farms and small businesses that are members of See SCENE, Page 11

Harrisonburg, Va.

Central Valley Area Home Sales Median Price Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

May 2016

May 2015

Pct. Change

$175,000 $205,000 $110,000 $170,000 N/A N/A N/A

$189,000 $185,000 $168,450 $163,950 N/A N/A N/A

-7.14% -9.76% -34.70% 4.00% N/A N/A N/A

Days On Market Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

May 2016

May 2015

Pct. Change

18 49 273 128 N/A N/A N/A

57 45 165 177 N/A N/A N/A

-68.42% 8.89% 65.45% -27.68% N/A N/A N/A

Units Sold Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

May 2016

May 2015

Pct. Change

43 85 15 53 N/A N/A N/A

33 77 10 48 N/A N/A N/A

30.30% 10.39% 50.00% 10.42% N/A N/A N/A

Unemployment April 2016

Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

March 2016

3.6% 2.9 4.8 3.0 3.1 3.4 3.5

4.8% 3.8 6.8 4.0 3.9 4.1 4.2

April 2015

4.7% 3.8 6.6 4.3 3.9 4.3 4.7

Source: Virginia Employment Commission

Labor Force Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

April 2016

March 2016

April 2015

23,737 39,610 11,436 21,015 35,679 11,677 9,774

23,852 39,450 11,326 21,175 35,830 11,781 9,860

24,487 41,337 11,841 21,337 37,215 12,085 10,118

Source: Virginia Employment Commission

Sources: Funkhouser Real Estate Group; Real Estate Business Intelligence

Retail Sales* Harrisonburg Rockingham Page Shenandoah Augusta Staunton Waynesboro

Building Permits* April 2016

April 2015

$105.9 $53.6 $20.0 $34.1 $44.8 $33.7 $44.9

$109.3 $51.0 $14.9 $36.3 $43.0 $34.2 $44.3

Source: Weldon Cooper Center for Economic and Policy Studies * In millions

April 2016 Permits Issued

Harrisonburg 4 Rockingham County 24 Page County 3 Augusta County 21

April 2015

Estimated Permits Estimated Cost Cost Issued

$600,000 6 $4.92M 23 $600,000 4 $3.58M 20

$1.02M $4.64M $475,185 $3.08M

Source: censtats.census.gov/bldg/bldgprmt.shtml *Permits are for residential construction only, single- and multifamily buildings, as recorded by the U.S. Census Bureau.

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Tuesday, June 28, 2016

First Century Sold

Zook Began Working For Dynamic Aviation In 1999

Scene

Movers

FROM PAGE 10

the Virginia Farm Bureau Federation, the state’s largest advocacy group for farmers.

— Vic Bradshaw

Summit To Buy First Century HARRISONBURG — Summit Financial Group (NASDAQ: SMMF) announced that it will buy First Century Bankshares Inc. (OTC Pink: FCBS) and its subsidiary, First Century Bank, in a transaction valued at approximately $42.8 million.

The sale, expected to close in the fourth quarter, is subject to regulatory approval and the approval of First Century Bankshares’ shareholders.

The deal calls for Summit, headquartered in Moorefield, W.Va., to acquire all outstanding shares of First Century, based in Bluefield, W.Va. Summit would pay $22.50 per share or 1.2433 shares of its common stock for each share to First Century stockholders.

First Century Bank has nine branches in West Virginia and four in Virginia, none of which are in the Shenandoah Valley.

Summit operates two Summit Community Bank locations in Harrisonburg.

— Vic Bradshaw

First Bank & Trust Gets Gold Rank HARRISONBURG — First Bank & Trust Co. is among the 585 banks owned by shareholders that earned Seifried & Brew’s 5 Gold Bar Institution status, signifying a ranking in the top 15th among community banks in the company’s Total Risk/Return Composite Ranking.

The index calculates each bank’s risk ranking with their return on assets and return on equity, according to Seifried & Brew’s website. First Bank & Trust, which is headquartered in Lebanon and operates branches in Harrisonburg and Bridgewater, ranked 258th with a 933 score.

Martinsville’s River Community Bank, which is in the process of merging with Luray-based Blue Ridge Bankshares Inc., was 402nd on the list with a score of 896.

Community banks with assets between $10 million and $10 billion in 2015 were considered for the index.

— Vic Bradshaw

FROM PAGE 2

was hired as its controller. He was promoted to CFO in 2002 and remained in the post until 2010, when he was named executive vice president.

A certified public accountant, he earned a bachelor’s degree in accounting from Eastern Mennonite University.

— Vic Bradshaw

Yoder To Head PVFCU Mortgage HARRISONBURG — Veteran mortgage adviser Julie Yoder has been promoted to mortgage manager by Park View Federal Credit Union.

Yoder, formerly a senior mortgage loan advisor for Park View, has 14 years of mortgage experience and has been with Park View since 2004.

In her new role, she is responsible for all residential mortgage lending operations and charged with increasing lending capacity and volume, ensuring regulatory compliance, and providing a good Yoder lending experience for clients.

A Harrisonburg native and resident, Yoder received an associate degree in business from Hesston College in Hesston, Kan., before heading to Eastern Mennonite University, where she earned bachelor’s and master’s degrees in business administration.

— Vic Bradshaw

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Bethel College in North Newton, Kan., and a master’s degree in conflict transformation HARRISONBURG — Harrisonburg res- from Eastern Mennonite University. ident Ben Saadatmand has been hired as Park View operates two branches in Hargeneral manager of Marlow Ford in Luray. risonburg and one each in Broadway and Saadatmand has been involved in the Dayton. auto dealership industry in the Shenandoah Valley since 1985. He’s worked for — Vic Bradshaw the Bob Wade organization and as owner of Landmark Motors Inc. in Harrisonburg Loudoun Mutual Promotes King as well as with WinHARRISONBURG — Harrisonburg reschester dealers. ident J. David King has been promoted The only fran- to senior vice president of Loudoun Muchised dealership in tual Insurance Co., according to a news Page County, Marlow release.

Ford was founded A University of North Carolina-Charin 2000. Part of the lotte graduate, King Marlow Automotive began his career as Group, its 15-person an insurance agent staff sells new and and worked as an unSaadatmand used vehicles and pro- derwriter before joinvides financing, parts ing Loudoun in 1999 and service. as its vice president

Saadatmand New Marlow GM

of marketing. He’s in — Vic Bradshaw charge of field underwriting, marketing Park View Taps Tieszen For Post and agency manageHARRISONBURG — Park View Federal ment for the compaCredit Union has named Jonathan Tieszen ny and is involved in King as a senior mortgage adviser. its reinsurance proThe Harrisonburg gram. resident has worked Loudoun Mutual insures more than for the credit union 58,000 homes and farms in Virginia for 18 years. He’ll be through a network of independent agenbased at Park View’s cies that include local companies Bankbranch in Dayton ers Insurance, Blue Ridge Insurance and work with clients Service, Hammond Insurance, LD&B seeking residential Insurance and Financial Services and and commercial real the Muterspaugh Insurance Agency. estate loans.

Tieszen earned a — Vic Bradshaw bachelor’s degree in Tieszen mathematics from

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Tuesday, June 28, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.