RD496 - Virginia-Israel Advisory Board FY2016 Annual Review


Executive Summary:
Summary

1. The most significant activity for the previous year was the planning and execution of Governor McAuliffe’s economic development mission to Israel. The first visit was postponed for eight months with the visit taking place in July 2016. The additional lead time allowed the VIAB to identify and develop additional, significant opportunities. The Governor was on the ground for46 hours, participated in 11 high-quality meetings, made four announcements and signed an MOU between the Strauss Group and Virginia Tech, which will augment our growing activities in agro-technology.

2. One of the most significant meetings has resulted in Project Turbine. An Israeli company with strong financial backing and success in Israel and Europe was convinced, after having met the Governor, that Virginia can offer a unique opportunity for the company to enter the US market. The goal of the company is to build multiple facilities of either wind, solar or hybrid solar & wind that will add up to 500 MW of power or more. The company visited Virginia in August, approximately a month after the Governor met with them, has hired a team of Virginia experts to lead the analysis and development, and plans to revisit Virginia in early December 2016 to close deals. The project has added significance since Virginia has no wind farms at this time.

3. An MOU was signed between the Strauss Group and Virginia Tech. If activated properly, the MOU should result in several new programs or projects per year with the Strauss Group sourcing many of the opportunities. As the Strauss Group is a 50% owner of Sabra Dipping and PepsiCo owns 50%, we expect the MOU to augment interaction with these companies as well.

4. The first phase of the Chickpea research at VSU had disappointing results. The VIAB worked with the Secretary of Agriculture to shift the research to Virginia Tech along with modest State funding for Chickpea development. While research is currently being done at Virginia Tech determining the “best practices” for growing chickpeas in Virginia, the consensus is that only a full breeding program will result in a Virginia Chickpea that will be resistant to diseases that express themselves in a chickpea grown in a more moist Virginia climate. Virginia Tech will work with the Chief Sabra Agronomist to determine the best course of action to be taken as we move forward.

5. EPC, a manufacturer of an onsite waste treatment facility for remote locations, announced their entry into the US market through a successful RFP in Tazewell County and their intention to expand manufacturing and assembly in Tazewell.

6. During the Governor’s visit, Tessa Dairy announced a $500,000 gift of their micro dairy production facility to Virginia Tech which will provide the company with a showcase facility from which they expect to expand into the US.

7. Aquaculture continues to be a major focus for the VIAB. The VIAB initiated Project Jonah, which is expected to be a major transformational project creating 426 jobs in Southwest Virginia. The VIAB worked with the company and VCEDA to secure a conditional grant of $10 million. The grant is conditional on the company raising over $60 million in equity. A major management change took place in 2015 which has raised concerns by VIAB management.

8. Independent of Project Jonah, the VIAB has been working with three other aquaculture companies with proven innovations. The VIAB will join Virginia Tech’s Aquaculture expert, Dave Kuhn Ph.D., for a working visit to Israel in January 2017 to meet these companies and additional companies in the field.

9. Because of the time consumed in planning the Governor’s mission to Israel and the soft economy, the number of new jobs created during FY2016 was less than in FY2015, 97 vs. 144 respectively. However, the pipeline of new jobs has grown. The 97 new jobs represent additional tax revenue to the Commonwealth of $323,495 on a tax base of $5.63 million.

10. From FY2000 – 2016, the VIAB has been involved with activities adding approximately 2,051 new jobs to Virginia's workforce. These jobs have generated approximately $67.7 million in state tax revenues. If we discount this amount by a conservative 78% for multiple parties involved in the facilitation process, the amount of tax revenue generated by the VIAB is $14.9 million which represents a 550% return on Virginia’s investment in the VIAB over the past 16 years.

11. The current pipeline of jobs is very robust and includes Project Turbine which we are aggressively pursuing and are optimistic that we will close in FY2017. The VIAB projects that the current pipeline of activities will increase jobs in Virginia by 1,104 jobs over the next one to three years. This would translate to an additional state tax revenue of $3.68 million based on a tax base of $64.0 million.

12. Based on the longer term projects in our pipeline, the VIAB projects the potential for an additional 1,405 jobs over the next five years which would increase the additional state tax revenue by $4.69 million based on a tax base of $81.5 million.

13. The State Auditor of Public Accounts completed the VIAB Audit for FY2016 and reported no issues.

VIAB Objectives

The primary mandate of the Virginia Israel Advisory Board continues to be economic development in Virginia. Our goals and strategies are:

• Facilitating new Israeli company entry into Virginia.

• Working with the Israeli companies already located in Virginia to help facilitate internal growth and expansion via the VIAB extensive network.

• Leveraging each company’s strength to create a multiplier effect for job creation.

• Place emphasis on job creation in Southwest Virginia in the area of Agro Technology. This will augment a “new economy” for a rural area that has been dramatically affected by the decline in both the tobacco and coal industries. It also leverages a great strength in the area due to the presence of Virginia Tech which has a world class reputation in Agriculture.

• Devoting from 10% - 15% of our energies to unique educational and cultural projects.