Growth gains momentum
Economic expansion spreads throughout the region
- February 28, 2017
Northern Virginia is in an upbeat frame of mind. An economic growth trend that began a few years ago gained momentum in 2016, and all signs point toward an even more prosperous 2017.
“Growth was generally good across the region, even as the nature of it may be changing,” says Terry L. Clower, director of George Mason University’s Center for Regional Analysis. By changing, Clower means that economic expansion in NoVa now is spread out more fully across the region, embracing not just the close-to-Washington suburbs of the city of Alexandria and the counties of Arlington and Fairfax, but the outer-ring jurisdictions of Prince William and Loudoun counties, too.
The region got a big boost with the February announcement that Nestlé’s U.S. subsidiary will move its headquarters to Arlington, a project that represents a nearly $40 million investment and will create 748 jobs (see story on page 24).
Loudoun took home best-in-show honors for the state in 2016. “It was incredible,” says Buddy Rizer, the county’s executive director for economic development. “Our biggest year yet.”
Loudoun led the commonwealth with $2.3 billion in new investment, a repeat of its No. 1 performance in 2015. It was first in the nation in household income for the third year in a row, and, at 6.2 percent, third in job growth.
Its data centers, which occupy 5.2 million square feet and generate $100 million in annual revenue for Loudoun, were go-go-go in 2016, as well. Up to 70 percent of all internet traffic already flows through Loudoun daily, and data center behemoths Digital Realty Trust, Equinix and DuPont Fabros Technology all were adding space last year.
Nonetheless, the county is trying to diversify its commercial tax base, Rizer says. Examples of that diversification include JK Services, which is constructing a $55 million headquarters in Sterling; EPL Archives, a life-sciences company, which was at work on $21 million in offices and labs in Leesburg; and, Unanet, a tech company, which moved to a larger space in Ashburn and promised to add 100 jobs.
Prince William County
Next door, in Prince William County, last year also was “a good one,” says Jeff Kaczmarek, executive director of its department of economic development. In 2016, the county logged 22 projects representing 501 new jobs. Capital investment totaled $1.3 billion.
Like Loudoun, data centers play a major part in the Prince William economy. The county has more than 3 million square feet of data center space and, in March, it announced that Iron Mountain Information Management LLC would develop a $350 million facility in Manassas, creating 25 jobs.
Information technology along with life sciences are major growth drivers in his jurisdiction, Kaczmarek says, noting that a modern life sciences accelerator in Manassas has filled all nine of its labs.
In Northern Virginia’s closer-in jurisdictions, the economy is on an upswing, but “a lot of legacy” is putting a strain on local coffers, Clower says.
Fairfax County is the prime example, where business is good, even as supervisors wrestle with a proposed budget that would give county schools $61 million less than they are seeking. That gap can be attributed to the fact that the school system has 186,000 children and grows by an average of 17 students a day.
Meanwhile, unemployment was at 3 percent in December, and Gerald L. Gordon, president and CEO of the county’s economic development authority, can point to a number of pluses for the Fairfax economy, including $60 million in private contributions to Inova’s new research campus in Merrifield.
The county also has clinched a number of deals, Gordon says. For instance, one of the county’s largest employers, the government and commercial IT contractor CACI International, announced an addition of 344 jobs in Fairfax City; M.C. Dean, an electrical contractor, announced that it is moving into new space at Tysons and creating 250 jobs; and Favor TechConsulting and Cvent both are expanding at Tysons, adding 235 and 121 jobs, respectively.
Gordon says the county plans a push to attract more businesses specializing in cybersecurity, cloud computing and translational medicine. And, with the arrival of an administration that may be friendly to homeland security and defense spending, he says, Fairfax, despite its legacy issues, “is bullish about coming contracting opportunities.”
In addition to the Nestlé deal, Arlington has had several recent project announcements that are expected to create new jobs.
Applied Predictive Technologies added offices in Ballston and promised 368 new jobs, and television station WJLA TV renewed its lease on 100,000 square feet in Rosslyn. The accounting and consulting firm Grant Thornton was consolidating its operations in McLean and Alexandria into 76,000 square feet in Rosslyn. That promises to bring 1,000 workers to Arlington and 348 more jobs within five years. The Metropolitan Washington Airports Authority further announced it was decamping from Ronald Reagan Washington National Airport to 75,000 square feet of space in Crystal City, bringing with it 260 jobs.
Christina Winn, director of business investment at Arlington Economic Development, says the county’s efforts will stay centered on retaining key federal tenants along with nonprofits, professional services, and aerospace and defense companies. The county believes that cybersecurity, health care and education IT, big data and green industries will be important elements in further development.
“We’ve had good success,” Winn says. “We’ve demonstrated that we are open to do business.”
Activity in Alexandria was somewhat subdued in 2016. In Old Town, however, work continues on the Robinson Landing South multiuse project, and the Hotel Indigo is nearing the end of construction and should open in the second quarter of this year.
Metro is figuring large in Alexandria’s assessment of things to come. After a decade of wrangling, the Potomac Yard Metro station finally got a green light for construction last year. The $268-million rail stop is projected to go into service in 2020.
The other milestone for the city was a first-ever incentive program to encourage homegrown businesses to stay put. The first two grants, $350,000 to the Motley Fool investment firm and $250,000 to Port City Brewing, were matched by the state.
Like the rest of the region’s locales, Alexandria is keeping tabs on the dramatic alterations underway in that large government based on the other side of the Potomac.
“Any time there is a change in the administration, we see an influx of activity as new players move in,” says Stephanie Landrum, president and CEO of the city’s Economic Development Partnership. She echoes the expectations of all her suburban counterparts when she says, “Northern Virginia should do well.”