The state of Fairfax
- June 28, 2012
Fairfax County got a rare dose of its own medicine in June when ExxonMobil announced that it planned to move 2,000 local employees to Houston.
Fairfax usually is at the receiving end of such relocations. It has benefited from a steady stream of major companies — such Northrop Grumman, CSC, SAIC and Hilton Worldwide — that have put down roots in the county in recent years.
The loss of Fairfax employees to Houston obviously represents “a big loss” for the county, says Gerald L. Gordon, president and CEO of the Fairfax County Economic Development Authority (FCEDA), but “it is not devastating.” He expects the 1.15 million-square-foot ExxonMobil site in the Merrifield area to be repurposed to serve other corporate, governmental or institutional interests.
In other words, rather than sulk about losing jobs, Fairfax already is thinking about who can be recruited to use the freed-up space.
That kind of attitude is one reason that local leaders are bully on their county. Many interviewed by Virginia Business consistently gave Fairfax a solid 8 or 9 on a 10-point scale. Most would have given the county a perfect score except for that fitful economic recovery and their anticipation of coming reductions in federal spending. Congress, for example, voted last year to slash defense spending by nearly $490 billion over the next 10 years, and larger cuts could be on the way.
With so many federal contractors, worrying about how painful the squeeze will be when the federal belt is tightened is inescapable. Nonetheless, Stephen Fuller, director of the Center for Regional Analysis at George Mason University, says that those who do business with the federal government have been repositioning themselves to be less dependent on Uncle Sam.
In the meantime, Fairfax County continues to tick along nicely. Gordon says federal procurement spending actually increased in the county in the past couple of years — in fiscal year 2011, it reached $26.5 billion — and across the board, the county continues to grow.
According to the 2010 Census, Fairfax now has nearly 1.1 million residents, making it not only the most populous county in the commonwealth, but also bigger than seven states. The median age of residents is 37.3 years old. Jane Strauss, chairman of the county’s school board, says that these demographics led to a record 12,000 students enrolled in last September’s kindergarten class.
The recession has slowed revenue growth, but County Executive Edward L. Long Jr., says Fairfax nonetheless has been able to add to its coffers as new jobs keep pace with new residents. Last year, 9,000 new jobs were announced as 159 companies either moved to the county or expanded there. In the first quarter of this year, another 2,000 positions at 46 companies were announced, pushing the total employment to more than 583,000 jobs. At the end of April, Fairfax’s unemployment rate was just 3.7 percent at a time the national jobless rate was 8.1 percent and the Virginia rate was 5.6 percent.
Most jobs in Fairfax are white collar and generously compensated. The county’s median family income of $122,000 is about double the national average. Ninety-seven percent of Fairfax jobs are linked to employers with fewer than 100 workers, but an enviable number of Fortune 500 companies adds luster to the county economy. Tysons Corner-based ITT Exelis, a 2011 spinoff from ITT Corp., recently became the 10th Fortune 500 company to have its headquarters in Fairfax. The county now is home to nearly half of the Fortune 500 companies in Virginia.
Bechtel Corp. is another shiny trophy. The multinational engineering and construction company announced last fall that it would move its global operations offices from Frederick, Md., to Reston this year, bringing with it 625 jobs. Democratic Maryland Gov. Martin O’Malley was forced to guarantee Bechtel $9.5 million just to get it to promise to leave at least 1,250 employees in Frederick.
“Gaining an international company like Bechtel Corp. is a huge coup for Virginia and Fairfax,” Gov. Robert McDonnell said at the time of the announcement. The Governor’s Opportunity Fund provided a $1.5 million grant to help Fairfax reel in the big fish.
Success stories such as Bechtel have contributed to Fairfax becoming the biggest economic entity in the Washington region. Fuller, the George Mason University economist, says the county now generates 23 percent of the D.C. area’s economy, and it is well positioned to become a global business center. For fiscal year 2013, its budget of $6.7 billion exceeds those of some third-world nations; It also represents a 4 percent increase from 2012, and includes property tax and storm-water fee increases.
And Fairfax is poised to get even bigger, as the hot spots for development — Springfield and Tysons Corner — continue to cook with gas.
Mostly because of the Base Realignment and Closure (BRAC) Commission’s mandate to concentrate Department of Defense agencies in and around Fort Belvoir in the southeastern part of the county, commercial development in the Springfield area is expected eventually to reach 8 million to 10 million square feet. Corporate Office Properties Trust is building a 240,000-square-foot office building at Patriot Ridge that will be accepting tenants by November.
Amy Phillips, vice president and development manager for Monument Realty, says her company has begun demolishing old houses at another site near Fort Belvoir in preparation for a fourth-quarter start on an 878,562-square-foot commercial project called Liberty View. Boston Properties has an 18- to 24-month timetable for breaking ground on still another commercial venture of a half-million square feet near the Springfield/Franconia Metro station.
Jeff C. McKay, a Democrat on the Fairfax County Board of Supervisors, has been working closely with Vornado Realty Trust, owner of the Springfield Mall. He says the much-delayed renovation of that aging shopping center will add a movie complex and a food court. The renovation will begin this month with the closure of all stores except Macy’s, Target and JCPenney. “I expect to be cutting the ribbon” on the new and improved mall “in two years at the latest,” McKay says.
At Tysons, construction cranes rule the skyline. HOT toll lanes and HOV-3 lanes, plus new interchanges with Interstate 66 and state Routes 7 and 123 should be finished this year, while the first phase of Metro’s Silver Line, or Dulles Corridor project, is scheduled to open next year. This unprecedented transportation infrastructure is expected to help double the number of jobs at Tysons in the next 20 years, from 100,000 to 200,000, and nearly triple commercial space from 26 million square feet to 70 million. Development projects are mostly in the planning phases, but construction has begun on a residential tower at Spring Hill Station near the new Tysons West Metro Station. The McLean-based Georgelas Group tapped Greystar Management to build the tower, which is envisioned as the first phase of a 28-acre mixed-use development.
Metro is expected to benefit nearby Reston, too, as the first phase of the Silver Line ends at Wiehle Avenue, just short of the Reston Town Center. Once it completes a 2,300-space parking lot at the new Metro station, Comstock Partners LC plans to develop office, retail, residential and hotel space in the surrounding area there.
Mark Ingrao, president and CEO of the Greater Reston Chamber of Commerce, says that regardless of what Loudoun County supervisors decide this month about providing $260 million in funding for the second phase of the Silver Line to Ashburn, Metro service to the airport is inevitable.
(The regional body building the Silver Line, the Metropolitan Washington Airports Authority, bowed to pressure from McDonnell and scrapped a union-friendly provision in the project contract. The governor had threatened to withhold $150 million in state funding for the Silver Line unless the provision was dropped.)
Fairfax already has 360 foreign-owned businesses and avidly pursues more international companies through Gordon’s economic authority. In May, for example, the county and George Mason University jointly hosted a 40-member business delegation from India. Having a rail connection to Washington Dulles International Airport will make Fairfax that much easier a sell to multinationals, Ingrao says, and when Metro does reach Dulles, he expects Reston’s economy to rate a 10.
To keep pace with all this bustling change, rival health-care behemoths the Hospital Corporation of America (HCA) and Inova Health System are expanding and diversifying their services in Fairfax, too.
Tim McManus, until recently president and chief executive officer of Reston Hospital Center and president of HCA Northern Virginia market, says HCA is constructing a 150,000-square-foot medical office building and adding 40 percent more operating room space at its Reston campus. (McManus has been named CEO of HCA’s Chippenham and Johnston-Willis hospitals in Richmond.)
Inova has a $2 billion project under way at its Fairfax Hospital. It will include a 660,000-square-foot women and children’s hospital as well as an 11-story patient tower that will serve as the new entrance to the existing facility. CEO J. Knox Singleton says Inova further is “developing a new focus on personalized medicine,” which includes its $150 million startup funding for genomic research at the Translational Medicine Institute.
Ironically, HCA’s and Inova’s push to deliver more health-care services is just another sign among many that Fairfax County, despite the economic malaise infecting many other jurisdictions in Virginia, has a sound constitution and can boast of robust health.
|Population (2010)||1.08 million|
|Increase since 2010||11.5 percent|
|Percentage of population 25 or older who have a bachelor’s degree or higher||58 percent|
|Median family income||$122,000|
|Unemployment rate (April)||3.7 percent|
|Foreign-owned firms (2011)||376|
|Number of jobs||583,000+|
|Civilian labor force (April)||643,538|
Sources: Virginia Economic Development Partnership, Fairfax County Economic Development Authority
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