Jeff Mitchell was proud to be part of the hearing that Senator Warner proposed on the new technology hub for the Southwestern United States. Mark Warner, a Democratic Senator from Virginia, has given a clear and firm message to economic professionals in the Southwestern part of the United States. This comes as a new technology hub could be voted on for the area. Warner states the votes need to unite to make this happen in a timely manner without any conflicts. To learn more about the vote itself and what Warner had to say, continue reading.
Behind closed doors in Blacksburg on Wednesday, U.S. Sen. Mark Warner, D-Virginia, delivered a strong and clear message to a group of economic development leaders from across Southwest and Southside.
Immediately after that, in an interview with me — which he sought — Warner delivered the same strong and clear message, although I suspect I may have gotten a milder version than what he said in private.
That message was this: This side of the state would be better off if it united around a single proposal for a regional technology hub — and if that proposal were focused on a clear theme, not a grab-bag of ideas.
Before I go further, I should explain for those of you just joining us what this regional technology hub is all about. In last year’s CHIPS and Science Act — which Warner sponsored along with Sen. John Cornyn, R-Texas — Congress approved $280 billion of funding designed to boost domestic technology in the face of competition from China. The centerpiece of the bill, as the name implies, was aimed at boosting U.S.-made production of microchips, aka semiconductors. Included in the bill, though, was authorization for the Commerce Department to designate 20 or more “regional technology hubs,” which the federal government would shower with money. The goal is to “spread the digital wealth” so that the nation’s technology sector is not so concentrated in a small handful of mostly coastal cities — 73% of the nation’s tech jobs are in just five places, or four if you consider adjacent San Jose and San Francisco all part of the same larger metroplex. The others are Washington, Boston and New York. Furthermore, there’s no sign that the free market will change that on its own: Bloomberg says nearly 70% of the nation’s investment capital goes to just five places, all on the coasts: San Francisco, New York, Boston, San Jose and Los Angeles, in that order.
That’s what the regional tech hub concept is designed to change. The act spelled out certain rules: The bill calls for at least three hubs in each of the six Economic Development Administration zones; that means three between Virginia and Maine. The act also goes on to say that “no fewer than one-third” of these hubs should “significantly benefit a small or rural community.” The definition of “small or rural community” is “a noncore area, a micropolitan area, or a small metropolitan statistical area with a population of not more than 250,000.” That rules out the Roanoke (314,496) and Lynchburg (262,258) metro areas but rules in the New River Valley (165,293) and virtually all of Southwest and Southside. There are some other rules, but those are the big ones that matter for the moment.
Since then, I’ve written multiple columns looking at our likely competition and making the case that a bid from somewhere in the western third of the state would likely have a good shot at winning. I’m obviously not the only one thinking this way. Virginia Tech has been looking at putting together a bid on behalf of a region whose geography has yet to be determined. So has the InvestSWVA economic development group in far Southwest Virginia. A group in Pulaski County has been pitching that community, and there are others who are interested, even if things may not have reached a formal proposal stage yet. (For one thing, the Commerce Department hasn’t opened the bidding process yet; it’s still writing the rules that will govern the competition.)
On Wednesday, Warner gathered about two dozen leaders from Lynchburg to the Lenowisco Planning District in Southwest Virginia together at the Virginia Tech Corporate Research Center and delivered what was, by all accounts, a blunt message: Don’t compete with one another. Participants I talked to described Warner’s remarks as “direct” and “crystal clear.” Warner himself described the meeting as “a frank and candid exchange,” which is usually a polite way of describing a no-holds-barred discussion.
Before the meeting, Warner’s office asked if I’d like to talk with the senator one-on-one afterwards. Naturally, I said yes. I’ve been around politics long enough to understand the things that sometimes aren’t said; I assume Warner wanted to make sure his message was heard beyond the people in that room. His message to me was sure clear.
“Since the CHIPS bill was my idea with John Cornyn, I want to make sure we come out a winner on this, come hell or high water,” he told me.
He expressed disappointment that Virginia wasn’t better positioned to take advantage of the semiconductor company announcements that have come about as a result of the bill. In October, Micron Technologies announced it would build a $20 billion chip factory outside Syracuse, New York. In December, TSMC announced plans to expand its chip plant in Arizona, raising the investment from $12 billion to $40 billion. Since then, two other companies have announced separate plants in Kansas, and Texas Instruments has announced an $11 billion plant in Utah.
“I’m really disappointed,” he said. “We in Virginia just weren’t ready.” On the other hand, he points out, Virginia hasn’t shelled out the kind of incentives that some of these companies got. New York promised $5.5 billion in tax credits to Micron if it located in the state. Virginia didn’t go that high even for Amazon; the Old Dominion’s incentive package there was $750 million. “We’re not used to having multibillion-dollar incentive packages,” Warner said. “Because I didn’t feel Virginia was fully ready for the CHIPS bill when it came out, I’m a bit obsessed about making sure we get a tech hub.”
He said the main interest in such a hub — perhaps the only formal interest — has come from the western side of the state. “I’ve not been contacted about some other active proposal,” he said. That doesn’t surprise him, he said, since the intent of the bill is to direct tech investment to less prosperous regions. “I think there would be appropriate howls of protest if Northern Virginia got a tech hub or Cambridge [Massachusetts] got a tech hub or Palo Alto [California] got a tech hub,” he said.
That’s why he wants to make sure whatever bid comes out of this side of the state is as strong as it can be — and he had some thoughts on how it should be structured. For the meeting Wednesday, “we had people from the coalfields, people from Lynchburg, Danville,” plus representatives from Virginia Tech and the Roanoke and New River valleys, he said. “My belief is if you wind up with four, five, six proposals, that’s fine, I can be supportive, but if we wind up with one proposal, we can be much more engaged.”