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With the first cohort of high school students set to enroll in the new Isle Marine Trades Academy lab school this fall and new manufacturing and warehouse space being built on the outskirts of Windsor, representatives of the Hampton Roads Alliance say Isle of Wight County is in a prime position to see economic development from the trilateral “AUKUS” security partnership among Australia, the United Kingdom and the United States.

The 2021 agreement calls for the Australian government to invest $3 billion in the U.K. and U.S. shipbuilding industries. Newport News Shipbuilding, which operates across the James River from Isle of Wight County, is one of only two shipyards in the United States capable of building the Virginia-class nuclear submarines Australia hopes to acquire, according to the Norfolk-based Alliance, which serves as Hampton Roads’ regional economic development organization.

Alliance representatives briefed Isle of Wight County’s Economic Development Authority on April 8 and spoke to the Times via conference call on April 16.

“Eighteen months ago we didn’t know what AUKUS was,” Alliance CEO Doug Smith told the Times.

That changed in 2023 when Smith attended a breakfast at Newport News Shipbuilding at which he said the shipyard’s former CEO, Jennifer Boykin, told the group of economic development professionals that the U.S. was entering “a 1939 moment,” referring to the military buildup that preceded America’s entry into World War II. A different Jennifer Boykin serves on Isle of Wight County’s Planning Commission.

“Fast forward, we probably had 40 Australian companies visit Hampton Roads,” Smith said. “We’ve hosted a number of delegations. We’ve been to Australia. … Last summer, we signed a cooperation agreement with Mayor Oliver Coppard from South Yorkshire (England), which is where the Sheffield Forgery and the Sheffield Advanced Manufacturing Research Center are, that we would all work together.”

Hampton Roads, which is home to over 80,000 active-duty military personnel, saw $11.2 billion in defense contracts and grants in fiscal year 2023, according to the Alliance’s website.

The Alliance announced April 16 that Perth, Australia-based Hofmann Engineering had established Hofmann Engineering Defense LLC, a U.S. subsidiary that will temporarily base itself in the Alliance’s IDEA Lab co-working space in Norfolk. That business and others expect to need larger manufacturing spaces, and that’s where Isle of Wight could come into the picture.

 

A need for land and labor

Over opposition from Windsor-area residents, Isle of Wight County supervisors voted 3-2 in March to approve light industrial zoning for the Tidewater Logistics Center, which proposes four warehouses totaling 726,000 square feet on 154 acres of what is currently farmland and forestry fronting the four-lane Route 460. The county’s Economic Development Authority is also developing the “460 Commerce Center,” a roughly 352,000-square-foot manufacturing and distribution facility in Isle of Wight’s Shirley T. Holland Intermodal Park that’s on track to be completed this summer. The existing Keurig Dr Pepper coffee roasting plant in the Shirley T. Holland park is also set to close by April 30, potentially making the 330,000-square-foot facility available to a new tenant. All three sites are roughly 35 miles from Newport News Shipbuilding and the Port of Virginia.

“Isle of Wight has some land. … The supply chain for Newport News Ship is going to require that suppliers here in the region expand and many suppliers that are not here need to get closer to Newport News Ship,” Smith said. “… We believe that creates some real opportunity for Isle of Wight among others to actually host some of these facilities.”

Smith said the Alliance is developing what he termed a “regional investment playbook” that focuses on three categories: defense manufacturing, the energy supply chain and critical industries. A final version is due to be released this summer.

The Alliance is also working with the Hampton Roads Workforce Council to ensure there’s an adequate supply of qualified employees for the new jobs that would be created if these defense-related manufacturers expand their Hampton Roads presence.

Shawn Avery, CEO of the Workforce Council, told the Times that an estimated 40,000 new maritime industry professionals will be needed, most at Newport News Shipbuilding, over the next five to 10 years.

Isle of Wight County Schools already has a plan to feed into that pipeline of new hires.

Last year, Virginia’s Board of Education awarded $1 million in state startup funds plus $1.7 million from the state’s College Partnership Laboratory School Fund spread over four years to to the Isle Marine Trades Academy, a shipbuilding-focused lab school at Camp Community College’s Smithfield campus that will operate in partnership with IWCS, Old Dominion University and Newport News Shipbuilding’s parent company, Huntington Ingalls. The concept will allow up to 80 high school students – 40 in the program’s first year – to earn an associate of applied science degree in technical studies and industry credentials in either maritime welding or marine electrical concurrently with their high school diploma.

Isle of Wight County Schools’ role in the partnership, in addition to providing the students, calls for offering the use of Smithfield High School’s and Windsor High School’s facilities and transportation to and from Camp’s Smithfield campus.

Students would enroll during their junior year and complete general education courses at Camp’s Smithfield campus in the morning, then travel to either SHS for welding or WHS, which houses the school division’s electrical career and technical education equipment, from 11:45 a.m. to the end of the school day. Seniors would spend their mornings at Camp’s Workforce Trades and Innovation Center in Suffolk.

“Isle of Wight has been at the lead when it comes to their K-12 system around the maritime academy,” Avery said. “… This is an ‘all hands on deck’ now and it’s for the foreseeable future, so … if you’re talking to your students or you’re talking to your kids that are in the schools, there’s no better time right now than to be interested in the maritime industry.”

 

Will AUKUS move forward?

President Donald Trump’s return to office in January and his subsequent on-and-off tariffs has rattled some of the United States’ allies. In March, Reuters reported that Canada was reconsidering buying U.S. fighter jets, and in April, the wire service reported Trump administration officials and a U.S. Congressional Budget Office report had expressed concern over selling Virginia-class subs to Australia without replacements ready for the U.S. fleet.

But Smith said he hasn’t seen any signs of Australia, the U.K. or the U.S. wanting to back out.

“Everything we’re seeing in terms of the change in administration is strong support for reinforcing, paying attention to the things that are happening in the Indo-Pacific (Ocean) and support for the sub program being a really important part of those solutions,” Smith said. “So we remain encouraged that this will be a big opportunity for the region.”

Even if the AUKUS defense contractors looking to set up in proximity to Newport News Shipbuilding don’t choose to base themselves in Isle of Wight, the county could potentially still see revenue if they choose instead to locate in the Kings Creek Commerce Center, a former Navy fuel depot-turned-industrial park in York County. Isle of Wight supervisors voted in 2020 to contribute a $10,000 initial investment, and $5,000 annually in subsequent years, toward the park, which is owned and operated by the Eastern Virginia Regional Industrial Facility Authority, or EVRIFA.

In exchange for funding, the concept calls for 90% of any tax revenue from the resulting tenants, minus operating costs, to be distributed proportionally among the participating localities: Isle of Wight, Gloucester, James City and York counties and the cities of Chesapeake, Franklin, Portsmouth, Williamsburg and Virginia Beach.

Whatever percentage of the project’s annual budget each locality contributes is the portion they receive from the 90%. The remaining 10% is split 50/50 – 5% among all EVRIFA participants and another 5% to York County as the host site.

“EVRIFA may, if we do it well – and we will over the next five or 10 years – I think it’ll become maybe the most important regional organization we have,” Smith said.

Economic development is currently “winner take all,” Smith said, where localities compete against each other to host new and expanding businesses. Those who make themselves the most attractive location receive the resulting tax revenue and the runners-up receive little to no direct revenue.

“With the EVRIFA and communities being able to invest in projects in other communities, that allows them to share the burden but also, but more importantly, share the revenues that come out,” Smith said.

Alliance Chief Operating Officer Steve Harrison said six communities, including Isle of Wight, purchased the 432-acre property from the state in 2020 for $1.3 million, and leased 250 of those acres to KDC Solar for a solar farm that was later acquired by Dominion Energy.  To date, Isle of Wight’s $5,000 annual contribution has remained in EVRIFA’s reserves for site readiness and contingency.

“Once other parcels are sold or leased, associated revenues from those sales or leases, less reserves and operating expenses, will be distributed to the communities based on their percentage of total investment,” Harrison said.

Harrison said the Kings Creek Commerce Center Committee also received a GO Virginia grant to bring the site up to fourth-tier or “business ready” status, and that Dominion is working to complete the approvals required to begin construction of the solar farm later this year.

“Several prospects are exploring other parcels on the property,” he said.