Federal budget cuts could curb Prince William’s rapid growthMay 29, 2012 6:00 AM
by Bruce Potter
When Dalena Kanouse wanted to move her company’s headquarters back to Virginia from Texas in 2009, deciding where to locate was easy.
After all, the company, Management and Training Consultants Inc., had been founded by her husband a decade earlier in their Manassas basement. Company leaders knew Prince William County was business-friendly, more conservative than many other areas of Northern Virginia and convenient to its major client, the Department of Defense (DOD).
“It was the logical choice to come back to the county,” says Domonique Basler, MTCI’s vice president of administration. “It’s just close enough to the beltway but not in it.”
MTCI, which provides training, training analysis and curriculum development, is one of nearly 150 defense contractors now based in Prince William. The county is quickly shedding its image as a bedroom community with less expensive housing than the rest of Northern Virginia but longer, more arduous commutes.
During the past several years, Prince William has withstood a major economic blow, made significant infrastructure improvements and witnessed a wholesale change in many of its major institutions and organizations. The county consistently ranks among the top localities in the country in terms of household incomes and job growth.
But although county leaders say the future is bright, there are still stumbling blocks — including potential cuts to the federal budget, particularly the DOD. Those cuts could threaten not only defense contractors such as MTCI but also the thousands of employees who live in Prince William and work for the government and contractors in other areas of Northern Virginia.
“That will have a disproportionate impact on Northern Virginia and Hampton Roads, including Prince William County,” says Corey Stewart, chairman of the county Board of Supervisors. “It could result in a decline in the employment base, which would eventually hurt the housing market.”
Stewart and others note that while the defense industry has grown in Prince William, so have other industries, such as life sciences, spurred in part by development of George Mason University’s satellite campus at Innovation Technology Park just outside Manassas. GMU expanded its campus with the opening of a biomedical research facility in 2010, and another academic building and a graduate dormitory are being built.
“The life sciences [industry] is really beginning to explode, and that has led to a lot of new development and interest at Innovation,” Stewart says, citing developments in medicine specifically tailored to individuals, as opposed to treating a condition the same way in every patient. “That is cutting-edge, health-care technology, and a lot of it is growing in Prince William.”
Innovation also is home to the FBI’s Northern Virginia regional office, several other large employers and one of the county’s new gems — the Hylton Performing Arts Center. (See related story on page 78.) But the development also includes a sore spot: an incomplete steel structure at state Routes 234 and 28. The building, started by Eli Lilly, was sold in 2007 to another pharmaceutical company, Covance, which planned a $175 million, 410,000-square-foot drug testing lab. In 2010, though, Covance pulled out of the project.
Jeffrey Kaczmarek, the county’s new director of economic development, noticed the eyesore on one of his first trips to the area. Kaczmarek’s staff is developing a strategic plan to market that building specifically, but he notes, “Prince William is a lot more than that facility.”
Kaczmarek, the former top economic development official in Kansas City, Mo., started in Prince William in April. He replaced Martin Briley, who was named president and CEO of the Virginia Economic Development Partnership last fall.
“Coming from the outside, I can really appreciate what the area has to offer,” especially the opportunities for economic development, Kaczmarek says.
He is particularly excited about Prince William’s labor force — the first key to attracting companies. Workers in the county generally are well educated and technically skilled, and they’ve moved to Prince William because houses are less expensive than elsewhere in Northern Virginia.
“That labor force would rather commute 15 minutes to a job than an hour and 15 minutes to a job, and be able to get home in time for their kid’s soccer game,” Kaczmarek says. “That’s the kind of employee who’s going to be a happy employee and a productive employee.”
His plan is to focus the county’s economic development efforts on key business sectors and to emphasize the county’s strengths, including its proximity to Washington Dulles International Airport, its school system and recent investments in parks and roads.
“All the social and physical infrastructure that helps with economic growth is here,” he says. “Prince William is a fantastic product. We need to market it more effectively than we have. We need to brand it in a way that resonates and differentiates us.”
The picture was not always so pretty. More than 18,000 homes in the county, Manassas and Manassas Park went through foreclosure from 2006 through 2010; at the peak in 2008, more than 800 homes a month were in foreclosure. Home values dropped as much as 60 percent in some parts of the county. The real estate market has started to recover, with prices increasing 5.5 percent last year and up again this year.
During that period, the county cut $143 million from its budget and used those savings to finance road improvements. “The whole county is going to be under construction,” Stewart says.
Major projects include widening portions of U.S. 1 on the eastern side of the county, improving several major county thoroughfares and upgrading the interchange of U.S. 29 and Interstate 66 in Gainesville. U.S. 1 has long been a sore spot for the county, but recent developments along the road include a residential community, Belmont Bay, on the Occoquan River and a mixed-use project called Stonebridge with more than 50 high-end retailers.
Just off U.S. 1, a master-planned golf-course community on the Potomac River called Harbor Station was stalled by the recession until being bought last year by California-based SunCal Cos. The project features a Jack Nicklaus-designed golf course that is expected to open soon, as well as high-end hotels and retailers.
The southern section of U.S. 1 in Prince William features one of the county’s landmarks, the National Museum of the Marine Corps in Triangle. The museum opened in late 2006 and draws more than a half-million visitors a year. Across Interstate 95 in Dale City, plans and fund-raising are under way for a 70-acre Americans in Wartime Museum that will feature displays of tanks and other vehicles from all major conflicts of the 20th and 21st centuries.
All these developments have occurred at a time of change for the county. Both of its major hospitals, previously community-owned, were bought by out-of-town chains. Potomac Hospital in eastern Prince William merged with Norfolk-based Sentara Healthcare, opened an emergency-care and diagnostic-testing facility in Lake Ridge and is now called Sentara Northern Virginia Medical Center. In the western part of the county, Prince William Hospital merged with Novant Health, based in Winston-Salem, N.C., and won approval to build a 60-bed hospital to serve the rapidly growing Haymarket area. Groundbreaking is scheduled in June with the facility expected to open in early 2014.
In 2010, the county’s two competing chambers of commerce merged to form the Prince William Chamber of Commerce. The merged chamber is the largest business organization in Northern Virginia, with more than 2,100 members, and is gaining influence in local and state politics, says Rob Clapper, its president and CEO. “What everybody had always hoped about the organization — it’s happening.”
Prince William and the cities of Manassas and Manassas Park also have hired new county and city managers within the past two years. The county also has a new attorney and planning director, in addition to Kaczmarek’s appointment as economic development director.
Meanwhile, the county also is playing a bigger role at the state level. In addition to Briley’s new job, former Board of Supervisors Chairman Sean Connaughton is state secretary of transportation, and Stewart is running for lieutenant governor in 2013.
“There’s a lot of opportunity for new day, new way,” Clapper says. “There’s a lot more collaboration going on.”
There are still concerns, though. The county lacks large hotel conference space, so major organizations hold events in neighboring Fairfax or Loudoun. The region’s Metro system still ends far short of Prince William, although Virginia Railway Express commuter rail trains serve both sides of the county. And those pesky federal budget cuts are on the horizon. “There’s no question it’s a big issue out there,” Kaczmarek says. “We have to be prepared.”
MTCI is preparing. The company, which has about 100 employees in 24 states, lost its preferred status as a service-disabled, veteran-owned contractor when founder Sam Kanouse died. Today, it is woman-owned and is trying to diversify its business and collaborate with local community colleges. MTCI also has worked within the chamber and the business community to develop partnerships with other defense contractors and bid on projects together.
“That’s sort of the epitome of how the businesses in the county work,” says Kent Milliken, the company’s executive vice president. “When you team with these other companies that share the same value system and the same work ethic, it’s a perfect marriage.”
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