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Volume 20, No. 7, May 29, 2019

Harrisonburg Housing Shortage Follows Nationwide Trend




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Easy Short Term Dumpster Rental

Inside This Issue The Shenandoah Valley Business Journal is a monthly publication of the Daily News-Record, 231 S. Liberty St., Harrisonburg, VA 22801.

Focus Section: Real Estate ■ Housing Shortage ‘Not New Or Unique’............Page 10

Other Business News

Editorial Staff Publisher: Craig Bartoldson Managing Editor: Clarissa Cottrill Staff Writers: Ian Munro, Jessica Wetzler Contributing Photographers: Daniel Lin

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

■ Merck Plans To Invest $1 Billion In Expansion.....Page 6 ■ Area Jobless Rates Tick Down In March..............Page 8

By fax: 433-9112

■ Dairy Leaders Seek Solution To Volatility......Page 13 ■ Tariffs Bring Instability To Some, Hope To Others...Page 14

By phone: 574-6267 (news) 574-6229 (ads)

Columns ■ Leadership with Robert McFarland.................Page 3

On The Cover:

■ Investments with Matthew Frakes.................Page 7

Daniel Lin / DN-R Construction crews work on a new house off Suffolk Drive north of Harrisonburg.

“Christmas in July” Facebook campaign. Central Virginia chapter of the American Marketing Association covers a large part HARRISONBURG — Sarah Elson, of Mas- of the state, including Charlottesville, the sanutten Resort, was recently recognized by Shenandoah Valley, Lynchburg, Farmville, the Central Virginia chapter of the American Roanoke and Blacksburg. Marketing Association. Elson, director of business relations for the — Staff Reports McGaheysville resort, was named Marketer of the Year at the organization’s 2019 Excellence in Marketing Awards gala on Thursday, Black Joins F&M Bank As according to a press release. New Executive Vice President The award recognizes someone who stands TIMBERVILLE — Barton Black has joined out through both work and community serF&M Bank in the newly created role of execvice. Elson moved to Virginia in 2005 and built utive vice president, chief strategy and risk Massanutten Resort’s marketing and public officer. relations department from the ground up, the Black has more than 25 years of experience release says. The resort has received more than 20 local in the banking industry, according to a press and national awards and accolades over the release announcing his hiring. Most recently, he was managing director last couple of years under her leadership. Elson has organized events held at the re- at Richmond-based Strategic Risk Associates. sort that have raised more than $1 million for He has also held various leadership roles at community organizations over the years. The resort was also recognized for its See MOVERS, Page 3

Massanutten Resort’s Elson Named Marketer Of The Year

Contact us

Allegheny Bancshares Announces Plan To Buy Mount Hope Bank

company headquartered in Franklin, W.Va. Pendleton Community Bank has four full-service financial centers in Franklin, Moorefield, Marlinton and Petersburg in West Virginia, and two financial centers and a mortgage division in Harrisonburg in Virginia. It also has a loan production office in Wardensville, W.Va. Mount Hope, a bank holding company headquartered in Mount Hope, W.Va., reported $124 million in assets as of March 31, and operates three community banking offices in Mount Hope, Beckley and Oak Hill in West Virginia.

FRANKLIN, W.Va. — The parent company of Pendleton Community Bank has acquired another West Virginia community financial institution. Allegheny Bancshares announced Thursday it will acquire the outstanding shares of common stock of Mount Hope Bankshares and its wholly owned subsidiary, Bank of Mount Hope. The $21.775 million deal has been approved by both companies’ boards of directors and is expected to close this year. — Staff Reports Allegheny will pay $58 per common share under the terms of the deal, according to a press release, subject to adjustment if Mount Hershey To Expand Stuarts Hope’s adjusted shareholders’ equity as of the Draft Production Facility effective date of the merger is less than the STUARTS DRAFT — Hershey Chocolate target mutually agreed to by both parties. After the deal is finalized, Bank of Mount of Virginia formally announced a more Hope will be consolidated with Pendleton than $104 million expansion to its Stuarts Community Bank. See SCENE, Page 3 Allegheny is a $320 million bank holding

Harrisonburg, Va.


Wednesday, May 29, 2019


Don’t Blame The Team If They Don’t Know The Rules My family hosted a foreign exchange student at our house for about a month last summer. When he arrived at our house, his first question to me was “What are the rules at your house?” Not wanting to sound like some kind of ogre, I said, “We don’t have many rules at our house.” But over time, I noticed that he did some things that annoyed me. And my thought was “That’s really rude. Why doesn’t he know any better?” So I told him that I was disappointed with what he was doing. Later he told me, “you didn’t tell me what all the rules were.” At that moment I realized I couldn’t hold him accountable for something I didn’t tell him. He asked to know what the rules were, but I didn’t tell him what they all were. This same thing applies to your employees at your workplace. They won’t know how to operate in your organizational culture if you don’t tell them. Here are the things you need to tell your people so they know how to follow the rules of your culture. 1. What do you always do? If there are certain things that must always be done, then you must train your team to do those things. If you want certain things done a certain way, then you must provide that level of training. The average amount of training that an employee receives in the retail industry is 16 hours. At The Container Store, the amount of training employees receive is 240 to 270 hours. But The Container Store has 10% employee turnover per year in an industry with

more than 100% turnover. Culture is an important part of having employees who will do what you want them to do. And training is essential to create the culture you want to have, because culture is the process by which the organization runs when you are not around. 2. What do you never do? If you want people to not do things, then you have to make sure that you tell them what you don’t want them to do. You can’t expect them to know that on their own. One of my clients had a policy of how their service technicians were to collect payment from their customers. One time when the office manager was following up with a customer, she discovered that the service technician collected the payment in an incorrect way. As a result, that discovery tipped off the company that this service technician was operating in a way that the company never did business. That led to this service technician’s dismissal shortly thereafter. You must incorporate your training program as part of your onboarding process. Only by having this component included in the process of introducing everyone to the culture of your company will it take root inside your company. 3. What limits do they have on their authority? It is important to explain what everyone is allowed to do within the extent of their authority. Make it clear what decisions they can make and what they need to get approvals for. Last year my son went to grocery stores


City Attorney Attends Estate Planning, Administration Seminar


Capital One, Hibernia National Bank based in New Orleans, and Deloitte. In his new role with Timberville-based F&M, Barton will be responsible for developing and executing the overall strategy for the corporation and ensuring the bank operates with an appropriate risk management culture that enables the bank to reach its goals, the release says. F&M Bank has 13 full-service branches in the Shenandoah Valley Black and a variety of financial services, including home loans through F&M Mortgage and real estate settlement services and title insurance through VS Title.

— Staff Reports

Leadership Robert McFarland here in the Valley to request donations for a service project he was doing for a nonprofit organization in the area. To receive even nominal donations of $25 or less, most grocery store chains required a customer service manager level approval. However, Martin’s grocery store authorized whoever was working at the customer service desk to approve a $25 gift card on the spot in exchange for a letter on organization letterhead describing the purpose of the request. Decentralizing the authority to make such low-dollar decisions frees up managers from having to make minor decisions and enables them to have the bandwidth to make more high level decisions. 4. What freedom do they have to use their judgment? Take time to explain the level to which your team can exercise their authority and judgment. While it is important to hire people who have good judgment, it is important to allow those who have good judgment to be able to use it.



HARRISONBURG — Harrisonburg attorney Michael Layman attended the Conner-Zaritsky 40th annual Advanced Estate Planning and Administration Seminar. The event was held in Williamsburg on May 3 through 5. Founded in 1983, Michael Layman Law Group practice areas Layman include tax planning, estate and business succession planning, wills and trusts, estate administration and charitable planning, among other areas.

Draft facility during a ceremony May 9 with Hershey representatives along with state and local officials. The expansion will be a total of 111,000 square feet, with 64,000 as an addition to the standing building and 46,000 square feet as a standalone peanut roasting operation. One new line will be constructed to produce Reese’s Peanut Butter Cups. This line will result in a 15% increase in production volume and finished goods manufacturing space for the facility, which has been in Stuarts Draft for more than 35 years. The standalone building will be called a “Hershey Peanut Roasting Center of Excellence” and will increase peanut roasting output by more than 50% per hour.

— Staff Reports

— Ian Munro

The Nordstrom’s Code of Business Conduct and Ethics says in bold capital letters “USE GOOD JUDGMENT IN ALL SITUATIONS.” They expect employees “to use good judgment when it comes to taking care of our customers and in your interactions with other Nordstrom employees and vendors. … When we talk about using good judgment, it’s really about how we treat our customers, how we treat each other and how we do business.” Your team needs to know the rules. When they know what the rules are, then they can conform the culture you want to create. But you can’t blame the team if they don’t know the rules. Robert McFarland is the author of the bestsellers, “Dear Boss: What Your Employees Wish You Knew” and “Dear Employee: What Your Boss Wishes You Knew.” Robert is also President of Transformational Impact LLC, a leadership development consultancy helping companies improve their employee cultures to make the companies healthier, more productive, and more profitable.

Texas Company Buys Local Shed Manufacturer Byler Barns HARRISONBURG — Ulrich Barn Builders, a Fort Worth-based shed manufacturer, has acquired Byler Barns & Backyards, a Shenandoah Valley shed manufacturer, according to a Tuesday press release. “This acquisition will bring the Ulrich Barn Builders quality of outdoor living structures to the Virginia market allowing Ulrich to continue on our mission to help families all across America live more memorable and organized lives,” said Steve Blyer, market president. Byler Barns has locations in Harrisonburg, Mechanicsville, Orange and Waynesboro. Manufacturing will continue in Harrisonburg, according to the release.

— Ian Munro See SCENE, Page 8



Wednesday, May 29, 2019


Chamber of Commerce Letter From The President


he Chamber of Commerce’s original mission, as you have probably heard several times as I quoted from the original April 1916 Charter, is to promote a healthy business climate in this community. The Chamber’s Public Policy Committee is constantly looking at a variety of elements of economic competitiveness on your behalf. One key component of business competitiveness and community quality of life that everyone understands is the ability to travel, both short and long distances. Transportation in today’s internet world is as important as it was one hundred years ago. Actually, one can argue that communities are not as self-sufficient as they were in 1916 and we are more interconnected and dependent now than we were then. Granted it is much easier now to conduct business almost anywhere in the world from Harrisonburg, but goods and people still need to move in, out and around the Shenandoah Valley somehow. And I-81 wasn’t going to get any better on its own, with the exception of a few interchange improvements our VDOT office has been putting on the wish list every year. In a simplistic way, this explains the Chamber’s interest and voice on the I-81 improvement issue, particularly these past two years. The Chambers along I-81, working in unison, proposed no specific solution(s), leaving that to the transportation experts and the workings of the political system, but admonished that “doing nothing is not a viable option” anymore. And the reality was that the money to do something was not coming from either Richmond or Washington, D.C. out of

the goodness of their hearts. We needed an I-81 solution. In the beginning, there was no one solution that everyone embraced. In the end, there was no one solution that everyone embraced. Either “The Political Science of Getting Something Done…. or Not….or, wait, Done” or “What Just Happened?” could be the title of an essay on this past year’s story of Improve-81. Unless something unforeseen happens, 2019 will be remembered as the year that something was done about I-81, regardless of whether you agree or disagree with the Governor’s amendments to the original bills. And for those wondering what the above title has to do with I-81, it is not actually about I-81 per se, but making this community more livable and economically attractive. In mid-April, Chamber staff was doing some Spring cleaning and found a plastic bin with files we thought were no longer in existence. The original binder of notes and minutes from the March 10, 1916 meeting “for the purpose of taking initial steps looking to the organization of a Chamber of Commerce” (C.G. Price, Temporary Secretary) through the “Board of Directors of the Harrisonburg Chamber of Commerce held November 27, 1922” (Samuel Duke, Acting Secretary) was among the materials discovered. The first four meetings dealt with the usual organizational items, plus “efforts to bring about improved street conditions”, approaching the two railroad companies on “the matter of changing their schedules so as to bring about better connection”, a Town Council Committee recommended bond issue of $40,000 “was endorsed for street paving” and a committee was formed for “the matter of a Horse Market” in Harrisonburg. Transportation and commerce have been intertwined and important for most of ancient and modern history, and definitely for this Chamber of Commerce from its inception to the present.


Frank Tamberrino President and CEO

ValleyFest: Shenandoah Valley’s Beer and Wine Festival 2019 This year’s ValleyFest: Shenandoah Valley’s Beer and Wine Fes�val on May 25 was our best yet! We want to thank all of our amazing sponsors, the �reless volunteers, the variety of vendors, the incredible musicians and everyone who helped make this year’s event wonderful.

Harrisonburg, Va.

STAFF Frank Tamberrino President & CEO Sheena Armentrout Director of Membership & Investment Sara Wittig Director of Marketing & Communications Carlie Floyd Director of Marketing & Communications Trent Turner Finance & Administration Manager

CONTACT US Harrisonburg-Rockingham Chamber of Commerce 800 Country Club Road Harrisonburg, VA 22802 (540) 434-3862



Harrisonburg, Va.

Wednesday, May 29, 2019

CHAMBER COMMITTEES If you’re interested in building relationships with local businesses and community leaders who share similar interests and passions, join a Chamber Committee. Visit the Chamber’s Online Events Calendar or call the Chamber Offices for more information on upcoming committee meetings for Chamber Members.

Aging in Place Roundtable educates the community about local services supporting vitality and choice in the second half of life and provides a forum for discussion and collaboration about the issues surrounding aging in place. Shenandoah Women’s Alliance is a network of dynamic, diverse women empowering one another through inspiration, education and service.

Hearing at Home - Ribbon Cutting on April 29, 2019

Business Councils - including Broadway-Timberville, East Rockingham, Greater Ashby, and Diversity - provide businesses opportunities to connect through informational and educational meetings in order to promote the economic vitality and quality of life throughout the community.

Hospitality Committee exists to improve the economic competitiveness of the hospitality industry through dialogue and relationship building. Public Policy identifies, evaluates and monitors social, political and environmental trends, issues and concerns affecting the business community.

CHAMBER MEMBER2MEMBER DISCOUNT PROGRAM Save money and help support the local economy by choosing Harrisonburg-Rockingham Chamber of Commerce members for your business and personal needs. If you’re a member and haven’t taken advantage of this member benefit, contact 540-434-3862 to sign up today!

Spotlight On New Members Valley View Advisors, LLC Advanced Network Systems, Inc.

2019 Calendar of Events ANNUAL EVENTS: June 5 | Diversity in Business: Diversify Your Workforce to Strengthen Your Business August 12 | Presidential Address September 6 | Golf Tournament October 3 | Connections 2019 Winter | Pre-Session Legislative Breakfast Winter | Shop Local Holiday Campaign

AT&T JMU Sports Properties War Paints Fortress Foundation Solutions Marketing Idea Shop Senior Care Authority Harrisonburg District United Methodist Church DDL Business Systems



Business Smarts Educational & Professional Development Classes, Networking Events and the following committees: Ambassadors, Public Policy, Regional Business Alliances, Aging in Place Roundtable, Member Success Orientations (open to new, current and prospective members).

Mather Architects


Business at Breakfast, Leadership Smarts, Shenandoah Woman’s Alliance, Speed Networking

Marketplace Agency & Eldercare Associates Shenandoah Automotive Service Center SpotOn Grace Retirement Village

Visit our website for an easy-touse, online database of all Chamber Members or pick up your free copy of our Membership Directory at the Chamber Office. There are current opportunities to secure your place in the next issue of Community Profile and Membership Directory. Contact Nick Yankosky at nyankosky@tspubs. com or 513-275-3684.




Wednesday, May 29, 2019

Merck Plans To Invest $1 Billion In Expansion Almost 100 Jobs Coming To Elkton-Area Plant By JESSICA WETZLER Daily News-Record

ELKTON — Virginia Gov. Ralph Northam announced on May 6 that global health care leader Merck & Co. plans to invest $1 billion in stages over the next three years to expand its manufacturing operations. Merck has close to 69,000 employees and delivers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. The manufacturing plant in Rockingham County has been operating for more than 75 years and has roughly 900 workers on-site, according to a press release. The expansion will add 120,000 square feet to its existing 1.1 million-square-foot facility to increase production of Gardasil, a human papillomavirus, or HPV, vaccine. “This is exciting,” Northam said. “For Merck to make a commitment to expand — to invest close to another billion dollars to employ close to 100 more individuals — is just something. I am here to say thank you.” According to a press release from Northam’s office, Virginia competed with other states for the project anticipated to create close to 100 new jobs. The Virginia Economic Development Partnership worked with Rockingham County, the Shenandoah Valley Partnership and the General Assembly’s Major Employment and Investment Project Approval Commission to secure the project for Virginia. According to the press re-

Courtesy of Rockingham County

Gov. Ralph Northam, right, speaks with Sanat Chattopadhyay, executive vice president and president of Merck Manufacturing Division, after announcing the pharmaceutical giant’s plans to invest up to $1 billion in expanding its Elkton facility on May 6. lease, Merck will be eligible to receive an MEI custom performance grant of up to $7.5 million for stormwater and infrastructure upgrades to support the expansion of the facility that is subject to approval by the General Assembly. Dominion Energy will provide support to enable the expansion, including substantial infrastructure upgrades. The company is also eligible to receive sales and use tax exemptions on manufacturing equipment, as well as a Major Business Facility Job Tax Credit for new, full-time jobs created. Blue Ridge Community College and James Madison University will work with Merck to address short- and long-term workforce needs through the development of a custom solution. BRCC and JMU are eligible to receive up to $2.5 million for the development of a custom workforce solution, according to the press release. BRCC and JMU will establish a pipeline of biotech-

nology engineering and computer science talent that will allow the Valley to accommodate the future growth of Merck and other life science industries and manufacturers in the region, according to a press release. “Really, the key is to be able to train talent here in Virginia at our great colleges and universities and then be able to keep that talent in Virginia,” Northam said. “So this is really a win-win situation for Virginia.” Northam said he has been asked what his main initiatives for 2019 are, saying “it really is to make sure that Virginia is the most business-friendly and worker-friendly state in this great country of ours.” “What we’ve tried to do, especially in 2019, is to identify what the jobs of the 21st century are, and they are in areas just like this, in biotechnology and cybersecurity.” During the announcement, Northam presented

See MERCK, Page 7

Harrisonburg, Va.

Harrisonburg, Va.


Wednesday, May 29, 2019


Steps For Maintaining A Thriving Family Business “In a family business, every decision and policy has to be evaluated based both on how it works for the business and also how it will affect the family dynamic — and that adds an extra dimension,” says Daniel Prebish, Director of Life Event Services for Wells Fargo Advisors. Here are six steps he suggests you can take to ensure your family business is positioned to thrive and survive: 1. Put people in jobs based on ability. It’s best to hire when you have a business need for a position, not because a family member needs a job, Prebish says. Then choose the candidate whose talents, not lineage, best fit the job. “The most successful family business owners are very honest about the talents of their family members,” Prebish says. “The oldest child may be a better fit in a sales role rather than CEO. Or maybe a child is better off

being an artist and not affiliated with the business at all.” Sometimes, recruiting talent from outside the company is the best way to fill a job. 2. Clarify and define job responsibilities. Family firms tend to be more informal than other companies, and that can lead to misunderstandings about expectations. Take the time to write formal job descriptions that detail each employee’s responsibilities and goals, and establish regular reviews. The older generation should also refrain from micromanaging. “Parents tend to constantly second-guess what a child is doing, and then the child never feels like he or she is actually contributing,” says Jim McKown, High Net Worth Strategist for Wells Fargo Advisors. “You need to think, ‘If they weren’t a family member, how would I be handling this situation?’ And that’s how you

should handle it.” 3. Leave work at the office; leave your personal life at home. Try not to talk shop during family gatherings, especially at holidays, weddings, and other special events. And refrain from bringing personal drama into the office. 4. Groom the next generation. Invest in education and experiences for young family members, sending them to industry conferences and getting them training to develop a skill the business can use. McKown recommends encouraging them to work elsewhere before joining the family firm to establish themselves as employees and giving them an opportunity to mature and make mistakes outside the business. Having the next generation develop a solid background in business may help secure your investment as you pass it on. 5. Outline your succession


exceeded my expectations,” Chattopadhyay said. “Elkton truly deserves to be considered for these kinds of investments as a bio-pharmaceutical company.” State Sen. Emmett Hanger, R-Mount Solon, said he was excited for the expansion, telling Northam that he came to the “best place in Virginia.” Hanger said Merck has distinguished itself in the industry of pharmaceuticals, and the commitment by Merck furthers the opportunity in the Valley to be a leader in the field of science and medicine. “We are able to not only make a good investment because of the good workforce that’s already here and the investment that is already in place here, but also in conjunction with our higher education,” Hanger said. Mike Breeden, chairman of the Rockingham County Board of Supervisors, said the proposed expansion reaffirms Merck’s commitment

to the area. “Merck is a major corporate player for Rockingham County, so it’s huge for us to know they are going to invest this money back in this business,” Breeden said. “It will bring a lot of jobs. … It’s good news.” Charlie McCurdy, director of global communications for the Merck Manufacturing Division, said construction for


Sanat Chattopadhyay, executive vice president and president of Merck Manufacturing Division, with a Virginia flag that has flown over the Capitol in Richmond in hopes the flag would find a new home in Elkton. “We wish you nothing but success,” Northam said. Chattopadhyay said it was “indeed a proud privilege and a rare moment” for him to accept the state flag as a symbol of Northam’s support. Chattopadhyay said he was grateful for the community, as well as the strong partnerships with local and state elected officials, educational institutions and organizations throughout Elkton for helping Merck sustain the commitment to the area’s economic growth. “It has always been a nobrainer for me to make up my mind about making an investment in Elkton because they have always met and

Investments Matthew R. Frakes plan. Passing a family business on to the next generation can be tricky, and that’s why it’s important to have a strong succession plan. “It should start with how you define success: Is it keeping the business as a family entity over many generations, or are you comfortable selling it to another firm with more resources that could build it into something better?” Prebish says. You will also need to consider how to pass along ownership in a tax-efficient the expansion is already underway. McCurdy said once plans are approved by the Food and Drug Administration, the expansion should be completed by 2021. Contact Jessica Wetzler at 574-6279 or jwetzler@ Follow Jessica on Twitter @wetzler_jessica

manner, how company founders (and spouses) will be taken care of in retirement, how to replace the current talent and adapt it for a changing market, and how the business may (or may not) be a part of your personal retirement plan. 6. Know when to seek outside help. Many business owners consult with outside estate and financial planning experts to help with succession planning. But a disinterested third party can also help resolve disputes and look at the business

rationally because there is no emotional attachment, McKown says. This article was written by/for Wells Fargo Advisors and provided courtesy of Matthew Frakes, Financial Advisor in Harrisonburg, VA at 540-801-3211. Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. © 2018 Wells Fargo Clearing Services, LLC. All rights reserved.



Wednesday, May 29, 2019



Park View Federal Credit Union Receives Award For Human Resource/Training HARRISONBURG — Park View Federal Credit Union in Harrisonburg, Virginia was recently honored with an Excellence Award, which recognizes outstanding human resource/training and development achievements in the credit union industry, according to a press release. The award was presented by the Credit Union National Association HR & Organizational Development Council, a national network comprised of 900+ credit union human resource and training and development professionals. Awards are given in each of three categories, including Employee Engagement, Management Practices and Innovative Staff Development. The Excellence Awards recognize and honor credit unions that exemplify excellence in HR and training & development in the credit union industry. Park View won the Innovative Staff Development category for its entry, entitled Connecting People with Purpose. In 2018, Park View launched a Member Advisor Development Program. This program provides Lobby and Contact Center Member Advisors the opportunity to map out their career path, prepare them for future leadership positions and get involved with strategic credit union initiatives, the release said.

— Staff Reports

Area Jobless Rates Tick Down In March By IAN MUNRO Daily News-Record

HARRISONBURG — The unemployment rate in the Harrisonburg metro area returned to 3% during March, matching January’s levels after a small increase to 3.1% in February. In March 2018, the unemployment rate for the area was 3.2%. March’s labor force numbers, employment and the number of unemployed also dropped slightly from February’s levels in the metro area of Harrisonburg and Rockingham County, according to data from the Bureau of Labor Statistics. Locally, the labor force dropped by around 1,000 people between February and March, from 67,324 to 66,255. Last year, there were 65,569 potential workers in the metro area during March. Employment also dropped by around 1,000, from 65,230 in February to 64,279 in March, though still higher than March 2018’s 63,497 employees. The unemployment rate and number of unemployed has been mostly

2018 - Reader’s Choice Daily Progress 2014 - “Best Small Architectural Firm” USGBC Best of Building Awards 2011- “Best Green Residential Renovation” Virginia Sustainable Building

Harrisonburg, Va.

dropping since hitting 8.1% and 5,141, respectively, in February 2010, in the wake of the 2008 financial crisis. In the metro area, total nonfarm jobs increased slightly from 69,300 to 69,400, matching October 2018’s level. The increase also marks a 1.2% increase over a 12-month period in the sector. Trade, transportation and utility jobs also matched October 2018 levels to stand at 13,600. However, this marks a somewhat larger increase for the sector — 3.8% over a 12-month period. Rockingham County’s unemployment decreased from 2.9% in March 2018 to 2.7% in March 2019. February’s rate was 2.8%. Augusta County’s March unemployment matched Rockingham’s unemployment for the second month in a row, dropping to 2.7% from 2.8% in February. The two counties’ unemployment rate also matched in March 2018, at 2.9%. Shenandoah County also saw a decrease in March’s unemployment rate, to 2.9%. This marks an improvement over

February’s 3%, which also was the county’s unemployment rate in March 2018. Page County was not so lucky, with unemployment increasing over the past 12 months from 4.9% in March 2018 to 5.1% in March 2019. However, this is still a marked decrease in unemployment for the county, which was facing a 5.7% unemployment rate in February. Statewide, the March unemployment rate was a seasonally adjusted 2.9%, with no change from February’s level. Local unemployment rates are not adjusted to account for seasonal factors. Many industries in the state have seen an increase in workers over the past 12 months, including manufacturing, construction, leisure and hospitality as well as education and health. However, other industries, such as mining and logging, information, and financial services, have lost workers over the past 12 months. Contact Ian Munro at 574-6278 or Follow Ian on Twitter @IanMunroDNR

Harrisonburg, Va.



Wednesday, May 29, 2019

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Wednesday, May 29, 2019


Harrisonburg, Va.

Harrisonburg’s Housing Shortage ‘Not New Or Unique’ By IAN MUNRO Daily News-Record

Daniel Lin / DN-R

Construction crews work on a new house off Suffolk Drive north of Harrisonburg.

HARRISONBURG — Harrisonburg is facing a shortage of affordable housing and numerous factors contribute to a rise in housing prices including scarcity, demand and rising interest rates. “I think it’s definitely a multifaceted approach that is needed for the inventory levels to come up for home affordability and correction to happen,” said Renee Whitmore, associate broker at Old Dominion Realty and president of the Harrisonburg-Rockingham Association of Realtors. Whitmore attended the 2019 National Association of Realtors Legislative Meetings and Trade Expo in the week of May 13, during which she had an opportunity to talk to Realtors from across the country. The lack of inventory levels in Harrisonburg is “not new or unique to our area, because it is

happening across the board,” she said. “We’re definitely trending with the same things that are happening across the nation.” Listings for homes have been dropping nationwide and new “entry-level” builds, such as smaller homes and town homes on smaller lots, are the key, she said. “I would say, if you look at the market numbers and the trends you see a direct correlation in the numbers that show the decline in inventory,” Whitmore said. Between April 2018 and 2019, there was an approximate 17% decrease in the listings available per month, Whitmore said. “I’m not sure there’s a really quick way of addressing the issue,” she said. Though there is housing being built in or around Harrisonburg, such as the 140-unit Altitude at Stone Port apartment complex, it depends if they will affect local in-

See HOUSING, Page 11


Harrisonburg, Va.

nomic downturn, said Bob Hill, CEO of the Harrisonburg-Rockingham Association of ventory, Whitmore said. Realtors. “There was a glut of housing available,” Short-term housing aimed at college students “really does not impact our inventory he said. “During that time, very little new levels or people looking to purchase homes,” housing was being built until the market restored itself.” she said. More long-term rental Since then, buyers’ properties could bring down “pent-up demand” for homes the number of people curhas overstepped the availabilrently seeking to buy homes, ity of properties, Hill said. There was a glut of though, Whitmore said. “What we’re hearing from housing available. “I think that could be a way our national economist is to alleviate it, but I don’t know we’re starting on turn the corDuring that time [a if that’s going to be the longner on that with new housing decade ago], very term answer, either,” she said. suppliers,” he said. little new housing was Harrisonburg’s population However, there is also bad is expected to grow to 58,687 news, Hill said, because buildbeing built until the by 2020 and 74,521 by 2040, ing prices have also risen. market restored itself. according to the University of Natural disasters such as Virginia’s Weldon Cooper Cenhurricanes, floods and fires n Bob Hill, ter for Public Service, and was have contributed to an inHarrisonburg-Rockingham the ninth-fastest growing city creased cost in getting buildin Virginia for 2019, according suppliers, while labor Association of Realtors ing to HomeSnacks, a regional costs of building structures data aggregator. have also increased due to the labor short“I think that’s also playing into those in- age, he said. ventory levels being low,” Whitmore said. “We “It’s like a snowball effect,” Hill said. have a lot of people, and new builds aren’t On June 14, the Harrisonburg-Rockkeeping up with the population.” ingham Association of Realtors will host A decade ago, the housing landscape was a rural housing forum to discuss the revery different as a result of the 2007 eco- gion’s housing needs.


Wednesday, May 29, 2019



Daniel Lin / DN-R

Construction continues on new town houses in the Preston Lake subdivision. Two years ago, the Harrisonburg-Rockingham Association of Realtors completed a survey to find out how to address the lack of affordable housing, Hill said. The forum will be focused on finding out what progress has been made and what new steps need to be taken, he said.

Finding common ground by those involved in the industry, including city and county staff and builders, to streamline code and the construction process would help alleviate some of the problems,

See HOUSING, Page 12



Wednesday, May 29, 2019



Hill said. “A lot of zoning was developed back maybe 30 to 40 years ago with good intent to maintain the character of the area, but now that we have maximized that, it is restricting what used to be a desired lot,” Hill said. “Now we really need a smaller lot to get a smaller house built into the space we have left.” Dick Blackwell, founder of Blackwell Engineering, filed a zoning ordinance request to allow homes on smaller lots in the city. Blackwell also agrees that building costs have gone up, mentioning increased regulations such thicker pavement and more road and sewer management. “There aren’t many single-family homes being built in the city of Harrisonburg, to be honest, because of the regulations,” he said. A 5-acre section of land would have to sell for $80,000 to be developed in Harrisonburg with current regulations, Blackwell said, adding “I don’t call that affordable.” “If everything else stays the same but if the lot is smaller, you can get more lots in a 5-acre tract and bring the cost down,” he said.

The zoning application is for an R-8, which specifically would allow single-family detached homes to be on 2,800-squarefoot lots, significantly smaller than current zoning allows, said Rachel Drescher, the acting zoning administrator for Harrisonburg. For example, the R-1 zoning requires 10,000 square feet and the R-3 requires 6,000 for single-family homes, Drescher said. An R-8 would be able to fit about 15 dwellings per acre, Drescher said. The process for passing a new ordinance and zoning an area of land are very similar, she said. The request was recommended for approval by the Planning Commission on May 8 and will be heard by City Council on June 11. If passed, it would immediately go into effect, Drescher said. Blackwell said city staff have been working on the request for two years and City Council is expected to pass it. Detached homes and duplexes would be allowed by right, with the construction of town homes requiring a special-use permit, Blackwell said. The R-8 zoning would decrease the cost of lots and including building, homes with four bedrooms and 2.5 baths could cost around $225,000 to $230,000, Blackwell

Harrisonburg, Va.

Daniel Lin / DN-R

Construction occurs on a new house on Suffolk Drive north of Harrisonburg. said. Though still not cheap, “better than Blackwell said. what’s out there now,” he said. Contact Ian Munro at 574-6278 or imunro@ “We’re just trying to get housing that people can own and live in themselves,” Follow Ian on Twitter @IanMunroDNR


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Wednesday, May 29, 2019


Dairy Industry Leaders Seek Solution To Volatility By IAN MUNRO Daily News-Record

HARRISONBURG — Dairy producers across the country are facing steep economic challenges in the form of weather difficulties, trade wars and price swings. In response, dairy leaders are looking for a way to change the current industry system to bring more stability, and want to hear from producers on the subject, according to Eric Paulson, executive secretary and treasurer of the Virginia State Dairymen’s Association. “When we lost 25 dairies in the first quarter of this year — is that truly what we want from our industry?” he questioned. Dairy has had a rash of bad years, resulting in many dairies going out of business across the nation and reaching a rate of about seven per day during 2018. Virginia has lost one dairy per week on average in the past several years, and the industry has lost 16% of licensed dairy farms since 2016, according to previous Daily News-Record reports. Five years ago, 2014, was one of the best years for dairy, Paulson said. Since then, prospects have not looked as good.

“Unfortunately, we seem to have more of those down years than those good years,” Paulson said. Even small changes, such as a 2 to 5% change in supply or demand, can be disastrous for dairy farmers by impacting prices, he said. Though changes in the market are inevitable and expected, he said, “farmers can’t handle when your price is half of what it is a year or two before.” The instability makes planning more difficult for dairy farmers, as well as pushes farmers to produce more milk when the price is low. This producer-versus-producer competition results in a situation of “who can hold on longer?” According to Paulson, “It only stops when enough cows and farms have left production,” he said. Though safety nets have been set up, such as the Margin Protection Program for Dairy, they do little to address the root problem, Paulson said. Some practices, Paulson said, which could improve the stability of the dairy market include supply management and federal order reforms.

See DAIRY, Page 15 Dairy cows feed between milkings at Windcrest Holsteins in August 2016.

DN-R File


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Harrisonburg, Va.

Tariffs Bring Instability To Some, Hope To Others By IAN MUNRO Daily News-Record

HARRISONBURG — Summit after summit, American and Chinese government trade representatives have failed to agree on changes to the trade conditions between two of the largest economies in the world over the past several years. The conflict between the nations over trade has created tough situations for some Shenandoah Valley producers and logistics firms, but opportunities for others. On May 10, President Donald Trump announced an increase on the tariff, or import tax, on some goods from China from 10% of the items value to 25%. In response, the Chinese government of president Xi Jinping announced retaliatory tariffs on Monday for over 5,000 American exports headed to the Asian economic powerhouse. Supporters of the tariffs claim it will encourage businesses to move back to America, where many prices for production are higher due to higher wages in the U.S. and more rigid health and environmental regulations. Trade wars, such as the mutual tariffs be-

tween the U.S. and China, bring instability to agriculture markets and changes to the markets may take years to correct, said Lareth May, president of the Rockingham Farm Bureau. “Farm producers need a sure and stable export market for their agriculture products,” he said. “Right now everything seems to change about as fast as Trump can tweet something.” Pork and soybean products may take a hit early on, he said. And farmers may switch from planting soybeans to corn since the market has gone down in soybeans. This rush to change crop could result in an oversupply and then crash of prices, or an undersupply and an increase in prices, May said. In fact, between 2007 and 2017, China bought approximately 30% of the annual American soybean crop, said Robert Harper, a grain merchandiser for the Virginia Farm Bureau Federation. And since trade conflict has begun, China has been purchasing those beans from South American countries such as Brazil, Paraguay, Uruguay and Argentina, he said. “It looks like, to me, South America has been the real winner between the battle between us and China on how we tax each other’s imports,”

Harper said. The government has developed programs to compensate farmers for their loss, such as the Market Facilitation Program. The MFP has given soybean farmers $1.65 for every bushel, Harper said. Though some are worried about the instability the tariffs and trade war bring, others see it as an opportunity. The poultry industry has not shipped a considerable amount to China since the country banned poultry imports from the U..S in 2015 following the Avian influenza outbreak, said Hobey Bauhan, president of the Virginia Poultry Federation. “Therefore, the poultry industry’s issue with China is not tariffs, which do not apply to poultry,” he said. “Our concern is this non-tariff trade barrier.” The export market is an important sector for American growers, Bauhan said. American poultry growers export 16% of chickens and 10% of turkeys grown in the states to other countries, despite the lack of access to Chinese markets. The largest importer of American poultry is Mexico, who is a participant in trade deals such as the North American Free Trade Agreement,

and its Trump-era replacement, the U.S.-Mexico-Canada Agreement, both of which are good for the American poultry, Bauhan said. The negotiations between the United States and China could reach a point where the Chinese government would repel its stance against American-grown poultry, he said. “We’re hopeful,” Bauhan said. Importers of Chinese goods will also be affected by the tariffs between the countries, along with exporters of American goods. Classic Distribution in Mount Crawford, moves cabinets made in China. The business is a sister-company with InterChange, the Mount Crawford based logistics firm. Prices will have to rise to deal with the effect of the tariffs, said Chris Thompson, vice president of business development for InterChange. “We’re having to raise prices to have to account for the additional cost of the tariffs and we are anticipating that supply chains are going to have to change,” he said. However, InterChange itself is not anticipating any significant turbulence from the

See TARIFFS, Page 15

Harrisonburg, Va.




Each of these leading practices have strengths and weaknesses, he said. However, when prices eventually pick up after bad years, potential solutions and changes to the current system lose momentum, Paulson said.

Supply Management

Most famously used in Canada, this practice would bring production in line with demand, limiting expansion of farms by balancing costs between large and small operations, Paulson said. “The current trend, right now, is we’re seeing a lot of consolidation and it’s becoming harder and harder for small farms to remain competitive,” Paulson said. Local dairy farmer Paul Horst, of Winterbourne Dairy in Hinton, is one of those farmers facing challenges from large farms. “These great big expansions in New Mexico DN-R File where they milk thousands of cows — we just can’t compete with that,” he said. Cows graze at Hidden Hollow Farm near Ottobine in April 2017. The European Union employed a quota sysThere have been many ideas, but no matter tem for milk production, but ended the practice to the practice because it takes away some freedom in 2015 after 30 years. in operating their business and would not be seen what the potential solution is, it must be univeras free market-friendly, he said. sally accepted to be successful, Paulson said. Daniel Knicely, of K&K Dairy in Mount CrawFederal Order Reform “We need to come together to find something Another potential solution is federal order re- ford, has such reservations. that works for everybody,” he said. “None of us like to give up our freedom to do form, which would direct farmers to reduce prowhat we want to do, but you have to look at whatduction in times of oversupply, Paulson said. Contact Ian Munro at 574-6278 or imunro@dnronline. However, some dairy producers may be opposed ever comes out and decide from there,” he said. com. Follow Ian on Twitter @IanMunroDNR

Wednesday, May 29, 2019




trade war, Thompson said. Many of the prices of items produced in China will be increased to compensate for the duties at American ports. Walmart has announced that it will raise prices in response to the tariffs. Bank of America estimates Apple will have to raise the price of an iPhone made in China by 14% to account for the tariffs. Though announced, both tariffs have yet to hit home just yet, said Frank Tamberrino, president and CEO of the Harrisonburg-Rockingham Chamber of Commerce. Both countries’ tariffs are set on items that have left the shores of the countries. Most of the shipping between the United States and China is by sea, so the actual duties will not be collected until ships dock that left after the commencement of the tariffs. “You’re looking a little bit down the line before people are seeing what the real impact is,” he said. Contact Ian Munro at 574-6278 or Follow Ian on Twitter @IanMunroDNR


Wednesday, May 29, 2019


Harrisonburg, Va.

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