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A mixed quarter for area economy
Second-quarter economic review for the Fredericksburg area

 Plans were announced to tear down the Fredericksburg Hardware building and build high-end townhouses there.
file/ROBERT A. MARTIN/THE FREE LANCE-STAR
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Date published: 7/18/2010

BY BILL FREEHLING

New vehicle registrations, local sales tax receipts, home building permits and median housing prices were among the economic indicators showing signs of improvement in the Fredericksburg area during the three months ending June 30.

Meanwhile total home sales, unemployment figures and commercial vacancy rates in the region were all slightly worse for the second quarter than during the same time period in 2009.

See the included numbers for all the details. Here were some of the business stories making news in the Fredericksburg region during the second quarter of 2010:

Spotsylvania Regional Medical Center opens, giving the Fredericksburg area three hospitals. A dispute with health insurer Anthem is resolved near the end of the quarter. Mary Washington Healthcare reports that 2009 earnings fell 60 percent from the year before due in large part to expenses associated with opening Stafford Hospital--where an expanded nursery is planned. The Family Maternity Center of the Northern Neck opens.

Kalahari Resorts and the Fredericksburg Economic Development Authority agree on a compromise fee that the water-park resort operator will pay for issuing its bonds through the EDA. The resolution follows weeks of at-times-contentious negotiations that briefly bring Spotsylvania County's EDA into the picture. Kalahari is also allocated another $5 million in tax-exempt financing from the governor's office on top of the $25 million already received. Kalahari plans to start selling bonds in September. Also at Celebrate Virginia South, the Haven apartments win approval from City Council.

McKesson Corp. announces plans to build a 340,000-square-foot pharmaceutical distribution center in Carmel Church. The $50 million facility is expected to create 150 to 190 jobs and bring in more than $500,000 in annual revenues to Caroline County when it opens by 2012. Spotsylvania had also tried to woo McKesson. Nearby, Caroline preps for the National Scout Jamboree, and the Union First Market Bank Hall opens as a venue for events and meetings.

Pending housing sales spike at end of April as federal tax credit for first-time home buyers expires. Some worry that the end of the tax credit could threaten a fragile housing recovery.


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Here is a look at local economic indicators for the second quarter of 2010 (April-June, where possible) compared with recent quarters. Unless otherwise noted, the data are for Fredericksburg, Caroline, King George, Stafford and Spotsylvania.

HOME BUILDING PERMITS*

March-May 2010: 322

March-May 2009: 259

*This is for single-family detached homes and also includes Orange County. Numbers for June weren't yet available.

Source: Fredericksburg Area Builders Association

Home sales

Q2 2010: 1,180

Q1 2010: 819

Q2 2009: 1,222

Source: Metropolitan Regional Information Systems Inc.

Median housing prices

June 2010: $224,796

March 2010: $200,000

June 2009: $205,000

Source: Metropolitan Regional Information Systems Inc.

Unemployment rates

May 2010*: 6.4 percent

April 2010: 6.1 percent

May 2009: 6.1 percent

*June data aren't out yet.

Source: Virginia Employment Commission

New vehicle registrations

Q2 2010: 3,246

Q1 2010: 2,375

Q2 2009: 2,614

Source: Virginia Automobile Dealers Association

Local sales-tax receipts

March-May 2010*: $9.45 million

March-May 2009: $8.87 million

*Taxable sales receipts aren't yet available for June.

Source: Virginia Department of Taxation

Commercial real estate vacancy rates

(Retail, Office, Industrial/Flex)

Q2 2010: 8.5 percent, 14.3 percent, 18.4 percent

Q1 2010: 7.8 percent, 13.7 percent, 18.5 percent

Q2 2009: 7.3 percent, 14.0 percent, 20.1 percent

Source: Thalhimer/Cushman & Wakefield Alliance

Commercial real estate average rents

(Retail, Office, Industrial/Flex)

Q2 2010: $17.77, $22.32, $5.57

Q1 2010: $17.81, $23.00, $5.42

Q2 2009: $18.53, $21.62, $5.47

Source: Thalhimer/Cushman & Wakefield Alliance

This is a quarterly feature in which The Free Lance-Star Business team gives a snapshot of area market conditions and reviews some of the important happenings over the past three months that have affected the area's economy. Look for it a few weeks after the end of each quarter, and let us know if there are additional things you'd like to see here.