Lynchburg Living

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By Mitchell Malcheff

More than 150 years ago, Stephen Wilcox patented the water boiler. In 1867, Wilcox and George Babcock founded Babcock, Wilcox, and Company to manufacture that same water boiler. Flash ahead to 2010 and B&W is now on the cutting edge of nuclear technology.

What does that water boiler have to do with today? Whether they knew it or not, those two pre-Civil War entrepreneurs laid a foundation in Lynchburg for the technology industry. Today, technology is playing a major role in transforming a region, once based largely on manufacturing, into a home for a diverse and ever-expanding economy that was recently recognized by Forbes magazine as the 28th best place in the country for business and careers.

Four broad categories comprise the Forbes ranking (Lynchburg ranks in parentheses)–the cost of doing business (42), projected job growth (174), educational attainment (160) and in the metro area population. Forbes only ranks the top 200 metro areas and Lynchburg falls toward the bottom with 247,000 in the metro area. Last year’s ranking slotted Lynchburg at 70. The jump was one of the largest made by any city over the last year as many plummeted because of the economy.

“One thing that came out of this study, for me, is it shows a resilience to this poor economy and that we’re fortunate to be structured in a way that we’re more impervious to the negative forces of this economy than a lot of communities were,” Rex Hammond, President and CEO of the Lynchburg Regional Chamber of Commerce, said.

That resilience is a result of a diversification that has been the goal of Region 2000, a partnership between local government, industry and educational leaders aimed at promoting the 2,000 square miles surrounding Lynchburg. Brian David is the Executive Director of Region 2000.

“It gives us a wonderful opportunity to get on people’s radar screens,” David said of the ranking.

Lynchburg is certainly on the radar screen in Virginia, where it ranked first overall in Forbes ranking, ahead of Roanoke, Richmond, Charlottesville and Washington, D.C., to name a few, despite lagging far behind them in Gross Regional Product (GRP). Lynchburg’s GRP for 2008, the most recent available data, was nearly $8.5 billion while Roanoke’s was almost $12.5 billion. One of the big reasons Lynchburg fared so well is the low cost of doing business that has always been a hallmark of the area. For example, Lynchburg ranked 42nd in cost of doing business while Roanoke was 61st and Washington, D.C., was 195th out of 200.

“Cost of living, largely driven by real estate, is also a competitive advantage that Lynchburg has,” Hammond said.

The one number in the ranking that David takes exception to is projected job growth. David said Lynchburg’s rank of 174th is the result of thinking in reverse.

“It’s kind of like driving a car looking in your rearview mirror,” David said of the ranking that is reflective of past data, which indicates that Lynchburg’s economy is dependent on manufacturing.

While manufacturing remains vital to Lynchburg’s health, high wage, high job growth industries are starting to make inroads. According to David, in 2000 for every 100 jobs, 1.5 jobs were in professional and technical services. In 2008, that number had jumped to 5.8, ahead of Roanoke and just shy of Richmond. Those high wage positions have far-reaching benefits. Every dollar spent in the local economy out of those paychecks turns over 2.5 times.

To outsiders, the local economy’s evolution may be surprising. Abe Loper, Executive Director of Young Professionals of Central Virginia (YPCV), is responsible for keeping young talent in the area and showing outsiders and locals alike that opportunities for career advancement are in their own backyard.

“I’ve been pretty impressed since I moved here…for the size of Lynchburg…there are a lot of world class organizations here,” Loper said.

Loper, who jokes that Lynchburg’s ranking has only gotten better since the YPCV was launched, hosts three monthly events focused on developing relationships between young professionals.

“One of the reasons we have found that a lot of people leave is they don’t develop strong relationships…and they feel alone,” Loper said.

With that in mind, one of the YPCV’s monthly events is always community service related.

“Statistically, if someone is involved in community service where they live, they’re half as likely to leave,” Loper said.

Though conventional wisdom says that bigger cities equal higher salaries, Loper says that just isn’t true. According to Loper, salaries in Lynchburg are just 3 percent lower than Chicago despite the cost of living being 15 percent lower.

Retaining that young talent in turn aids in the growth of existing businesses. The result is that supporting businesses are attracted to the area. What they find is a city that is an attractive place to start a business or to relocate. Gary Case has been selling commercial real estate in Lynchburg for more than 30 years.

“The thing that has kept us in the game over the years is we never get the extreme boom, but we never get the bust either. The underlying thing that helps us tremendously is we have a very diverse economy,” Case said.

Case was proven right during the recent downturn that was largely driven by the sub-prime mortgage bubble bursting nationwide. Though Lynchburg’s real estate market dropped in volume, prices were largely unaffected, contributing to the low cost of living. Case also said that Lynchburg is attractive because of its colleges and universities, as well as its strong public and private education system that can be the deciding factor for professionals concerned about relocating their family to the area. Practical considerations like the ability to expand water and sewer systems, the presence of natural gas and a relatively low cost for energy further Lynchburg’s appeal.

“If they’re just looking for cheap land, they’re not going to come here or anywhere like Lynchburg, they’ll move to Alaska,” Case said. “Lynchburg has always been a jewel and we’ve always taken it for granted.”

If the Forbes numbers are any indication, it won’t be taken for granted much longer. Despite the low projected job growth ranking, projected economic growth was strong at 64th. According to David, wireless companies like local Innovative Wireless Technologies are finding Lynchburg attractive, as well as data storage companies who see Lynchburg as a potential future destination for large server farms that gulp up huge amounts of energy.

While the above reasons given by Hammond, David, Loper and Case are all part of Lynchburg’s success story, there are many other factors at play, like Lynchburg’s proximity to outdoor activities.

“There’s a diversity of recreational life here where, no matter what you’re into, there’s something you can do unless you’re into nightclubs,” Loper joked. “We’ve got great restaurants here, and restaurants attract young people. Having good restaurants here makes a big difference.”

One other important factor in the Forbes ranking is Lynchburg’s low crime rate, which ranked 18th in the study.

Though the ranking is concrete evidence that Lynchburg is doing well, Hammond says community developers must not be content with 28th.

“I look at these business rankings and it would be easy to rest on our laurels, but the attitude that community developers should take when they look at these comparisons is, ‘What can we learn about ourselves? And what can we learn about ourselves in comparing us to other communities?’” Hammond said.

Hammond was most happy to see Lynchburg’s per capita income rise, a number that usually lags behind the rest of the country.

For Lynchburg to continue to thrive, it must continue to diversify, according to David. The results of the transition away from manufacturing are already paying dividends. According to David, Lynchburg’s 8 percent unemployment would be much closer to 15 to 20 percent, in accordance with Danville and Martinsville, had local government and industry not created an environment conducive to transition.

Like Babcock and Wilcox’s decision to locate their water boiler plant here more than 150 years ago, decisions made by many men and women over Lynchburg’s history have all played a part in the Forbes ranking and in creating a bright future. The common thread running through all of those decisions has been a commitment to the continued importance of Lynchburg to the health of the region and the state.

“You can take any enterprise in Lynchburg and trace it back to a point in time where most people weren’t aware of the consequence of what they were doing,” Hammond said. “What would the community look like if it hadn’t merged its hospitals? What would the community look like if Genworth or Babcock and Wilcox hadn’t located here? What would the community look like if Danville hadn’t vied with Lynchburg and, to some degree, took over tobacco distribution in the area? What would the community look like if Jerry Falwell hadn’t invested in his church and college? None of those were by design; they were the vision of one individual or a group of individuals who invested their time, abilities and resources in the community and look what they are today and how they’ve impacted the community today.”