RD351 - Virginia Israel Advisory Board FY2012 Annual Review
Executive Summary: FY 2012 Results
1. The Sabra factory in Chesterfield County continues to be a major economic success for the Commonwealth despite the challenging economy. The Sabra facility has added approximately 110 jobs during FY2012 and expects to add another 90 jobs in FY2013. There may be an additional 100 jobs added over the next 24-month period.
2. The VIAB initiative that led to the establishment of the “Virginia Israel Bio Sciences Commercialization Center” has progressed to become Virginia Life Science Investments (VLSI). A total of nine Israeli companies are now part of the initiative. An $18 million fund has been raised to support the growth of these and additional Israeli companies and an additional round of investment may be sought in the next 12 -24 months. The VIAB was responsible for securing the fund’s first Israeli investor who has invested $500,000 of direct investment into Virginia via the fund. A manufacturing facility in the Tidewater area producing counter tops based on one of the company’s technology is expected to open in 2013. Potential new jobs are estimated at 60.
3. FY 2012 presented challenges due to a lackluster economic recovery. OSG, an Israeli company, which began operations in FY2007 in Emporia, increased total workers from 25 to 140 in the beginning of FY 2009 after accelerating a three-year plan. The economy and an unexpected time void between contracts caused a cutback in manpower to about 40+ workers. In FY2012, they increased their workforce to approximately 65.
4. Despite lackluster economic conditions, 154 new jobs were added in FY2012 from VIAB efforts representing additional tax revenue to the State of $462,000 on a tax base of $9.24 million. In addition the VIAB was very involved with retention efforts of a company that was considering leaving the Commonwealth. That would have meant a loss of tax revenues of approximately $900,000.
5. From FY2000 – 2012, the VIAB has been involved with activities adding approximately 1,470 net new jobs to Virginia’s workforce. These jobs have generated approximately $40.9 million in state tax revenues. If we assume that the VIAB was involved in 25% of the companies’ decision process to move here, the amount of tax revenue generated by the VIAB is $10.09 million which represents a 523% return on Virginias’ investment in the VIAB over the past twelve years.
6. The VIAB projects that the current pipeline of activities, with eight leading potential prospects, will increase jobs in Virginia by 403 jobs over the next one to three years. This would translate to additional state tax revenue of $1.2 million based on a tax base of $24.18 million.
7. The State Auditor of Public Accounts completed its Audit for FY2012. Their findings are as follows:
• proper recording and reporting of all transactions, in all material respects, in the Commonwealth Accounting and Reporting System;
• no matters involving internal control and its operation necessary to bring to management’s attention;
• no instances of noncompliance with applicable laws and regulations or other matters that are required to be reported.
The primary mandate of the Virginia Israel Advisory Board continues to be economic development in Virginia. Our goals and strategies are:
1. Facilitating new Israeli companies entry into Virginia.
2. Working with the Israeli companies already located in Virginia via networks to help facilitate internal growth and expansion.
3. We leverage the company’s strength in order to create a multiplier effect for job creation.
We devote from 10% - 15% of our energies to special educational and cultural projects.