Virginia Tech recently released an outside study of the university’s economic impact. It included a regional breakdown across the state, which revealed this nugget: Tech’s Roanoke operations, primarily the medical school and related biomedical research institute, now has an economic impact of $456 million a year, more than double what it was eight years ago.
Health care is now the largest economic sector in the Roanoke Valley and the second-fastest growing (the other is the much smaller employment sector classified as “management”). The Virginia Tech Carilion School of Medicine and Fralin Biomedical Research Institute aren’t responsible for all of that (health care is growing everywhere), but they are certainly now the crown jewels of the Roanoke Valley’s economy — and their rapid growth suggests that the predictions that they could someday lead to the development of a Blue Ridge version of North Carolina’s Research Triangle are not far-fetched.
It’s important to remember how they came about: through a substantial amount of state (as well as private) investment, which clearly seems to be paying off.
This year, as legislators in Richmond set about reworking the budget that Glenn Youngkin proposed before he left the governorship, there were multiple proposals for more state funding for the biomedical complex: Money to expand the medical school. Money to start a new research center at the institute. Money for a biomedical-focused high school.
And yet before the session started, one Roanoke City Council member told his colleagues that a proposed casino “is our most important priority this session.”
Peter Volosin’s request got the casino added to the city’s legislative wishlist, but did not get acted on in Richmond. The Roanoke Valley’s legislative delegation was universally opposed to a casino and, without them, no other legislator would introduce a bill to add Roanoke to the list of places eligible for one. In the end, the General Assembly took no action on a proposed casino in Roanoke, although it did move to add Fairfax County to the list of localities authorized to have casinos, pending a local referendum.
This raises several questions:
Was the city wise to make a casino its top legislative priority? For one thing, the political landscape was clearly against Roanoke’s casino quest. No local legislators backed it; regional legislators who could have been allies were opposed because a Roanoke casino would potentially be competition to existing ones in Bristol and Danville. For another, why would the city expend its political capital on a casino when it has in its midst a growing economic engine in the biomedical complex — which legislators across the state might be more inclined to support because maybe someday their constituents might benefit from that life-saving research?
The counterargument is that the two things — a casino and the biomedical complex — are not mutually exclusive and that the purpose of a casino would be to draw visitors and their spending money to town in a way that the medical school and research institute cannot.
For the time being, the casino is a moot point. It’s not happening this year, at least. The politics for it look difficult in the future, as well, but my intention today is not to look ahead, but to look behind.
Sometimes history unfolds so slowly that we lose sight of how we got here. To understand both the biomedical complex and the proposed casino in context, we must go back more than four decades — or maybe seven decades.
In the 1950s, Roanoke faced an economic crisis that set the city, and the whole Roanoke Valley, on a path to where it is today. Roanoke then was very much a “railroad town.” While other railroads began switching from coal-burning steam engines to diesel, Norfolk & Western Railway stuck with steam. Its leadership felt that since the railroad’s main business was hauling coal from Southwest Virginia and West Virginia, N&W should be loyal to its main customer by burning coal itself. That finally changed in the late ’50s. The switch from steam to diesel also meant the railroad needed fewer workers, one of many examples of how technological change impacts the workforce.
Along about that same time, in 1958, Roanoke’s other big employer shut down — the American Viscose rayon plant.
This was a twin crisis, one that led to a concerted push to diversify the Roanoke Valley’s economy so it wouldn’t be so vulnerable to the fortunes of one or two specific employers.
Roanoke’s next big economic crisis came in the mid-1970s and, in some ways, stretched into the 1990s. The specific pieces were separate, but the actions they set in motion all intertwine together today.
First, downtown was hollowed out as businesses relocated to suburban malls. That led to the “Design 79” initiative under the energetic and visionary City Manager Bern Ewert to reimagine — and revitalize — a downtown that had become what one council member called a “cancer.” The most notable outgrowth of that was Center in the Square, a renovated building downtown that would bring the city’s top cultural institutions together under one roof. That opened in 1982, the same year that Roanoke officially ceased to be a “railroad town” — or, more accurately, ceased to be a railroad headquarters city. That was the year Norfolk & Western merged with the Southern Railway and moved its headquarters to Norfolk (it’s now in Atlanta, but that’s another story).
The ’80s also saw the beginning of the decline of American manufacturing — or, more to the point, American manufacturing employment.
Throughout the 1980s and into the ’90s, Roanoke went through a long period of angst as the community struggled to figure out what it was, and what it should be. If it was no longer a railroad town, and no longer much of an industrial city, what kind of town should it be? We saw this angst play out politically, with frequent turnover on city council. Voters seemed perpetually unhappy.
The Roanoke Times (where I was a reporter) embarked on a multiyear series entitled “Peril and Promise” that attempted to lay out, in statistical terms, the challenges before the Roanoke Valley. I worked on one particularly controversial story where we hired a consultant with a database (a novelty in those pre-internet days) who crunched a lot of statistics and concluded that Roanoke was, economically speaking, not a Sun Belt city, it was really a Rust Belt city, just one with a Southern accent. There were studies upon studies, one of which concluded that the Roanoke Valley really had no economic prospects other than to invent an entirely new economic sector, and it was unclear what that could be. Things were pretty grim. Against that backdrop, there was an attempt to invent a new economic engine: The Explore Park was envisioned as a Disney-scale tourist attraction, but, after paying for the land, the state was reluctant to fund such a venture and many in the Roanoke Valley emphatically did not want to see the community rely on tourism jobs. That project foundered for lack of funding, with still no answer to the valley’s economic challenges.
All that began to change with the founding of the Virginia Tech Carilion School of Medicine and Fralin Biomedical Research Institute in the early 2000s. Decades later, it’s clear that the biomedical sector is that entirely new economic sector that no one would foresee in the ’80s and even early ’90s. If you went back in time and told community leaders then that someday the brownfields along the Roanoke River would be home to a major outpost of Virginia Tech and a medical research institute that together accounted for an annual impact of $456 million, they would be delirious — or think the time-traveling visitor delusional.
Historically speaking, the casino proposal seems the modern version of the original Explore Park concept — a shiny, sparkly way to attract tourism. The difference is that Explore was intended to create a new sector that would drive the region’s economy; casinos don’t really do that. They do generate lots of tax revenue, but their employment tends to be low-wage. The best argument I heard for the Danville casino came from council member Lee Vogler, who said the casino there was never meant to be about employment, but about revenues — revenues that would help the city speed up its capital improvement plan.
In broad terms, the casino is also akin to the original vision behind Center in the Square — putting all the arts and cultural organizations together in one place was intended to be a tourist draw for downtown. Now that concept has fallen apart — or has been actively dismantled, as David M. Poole recently reported for Cardinal in his two-part series on Center in the Square. (Find part one here, part two here.) The center has pushed out some of its original tenants on the grounds that they weren’t attracting enough visitors to downtown.
Downtown, meanwhile, has not fully recovered from the pandemic. I worked downtown for 39 years and loved the energy. When I go there today, what I often notice is the stench of marijuana and homeless people panhandling. The former is likely to increase with the legalization of retail sales later this year. The latter is a more endemic social problem that has animated a lot of public debate about downtown. Things are not nearly as bad as the 1970s, but downtown Roanoke has partially reverted to some aspects of that era.
The big question that the Roanoke Valley wrestled with in the ’80s and ’90s — what industry can the region attract to replace the railroad? — has been answered. It’s life sciences. The questions that the city, in particular, has always had difficulty with over a half-century — how to generate more tax revenues, and how to draw more people downtown — still remain. Roanoke has a council election this year. Perhaps these are questions the council candidates can debate.
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