Defense and defensibility

Amid data centers and defense contractors, deals abound

Published February 27, 2023 by Courtney Mabeus-Brown

When it comes to tech and government contractors, Northern Virginia’s national profile continued to rise in 2022.

Arlington County, where Amazon.com Inc.’s multibillion-dollar HQ2 is continuing to take shape in National Landing, made headlines around the globe in spring 2022. Fortune 500 companies Boeing Co. and Raytheon Technologies Corp. announced within weeks of each other that they were each relocating their corporate headquarters to Arlington, making Virginia home to four of the world’s five largest defense and aerospace contractors. (See related story.)

Nevertheless, this was hardly the only economic development news from the past year in a region that continues to solidify its marquee business reputation, adding to growing industries such as life sciences, data centers, information technology, energy, manufacturing and tourism.

Loudoun County

Long known as “Data Center Alley,” Loudoun’s moniker remains true — in fiscal 2022, data centers accounted for $5.61 billion of the $5.74 billion in capital investment in the county. Loudoun added another 3 million square feet of data centers in 2022, bringing the county’s total to about 26 million square feet.

But for Buddy Rizer, the county’s executive director for economic development, there was no story bigger than Metro.

The rail service opened its $3 billion Silver Line expansion in November 2022, including two stations in Loudoun and one, Innovation Center, in Herndon that borders the county. Innovation Center, where the massive 103-acre mixed-use Rivana at Innovation Station project is proposed, is “the most attractive Metro site in the country,” Rizer says.

“Metro represents the single biggest opportunity to grow our economy and to diversify it and strengthen it,” Rizer says.

Loudoun’s other economic development wins included a March 2022 announcement that the U.S. Tennis Association would build a 36-court, $42 million campus, creating  76 jobs. Additionally, data center component manufacturer Hanley Energy announced an expansion, including 343 jobs and $7.9 million in capital investment.

Fairfax County

The first economic development announcement of Gov. Glenn Youngkin’s term took place at Alarm.com’s Tysons headquarters in February 2022, about a month after Youngkin took office. The security company said it would invest $2.6 million to expand its research and development division, creating 180 jobs.

Fairfax worked with 146 business that announced 12,647 jobs in 2022.  Northern Virginia’s largest deal of 2022 came in August when Hilton Worldwide Holdings Inc. announced it was renewing the lease at its McLean global headquarters for another 15 years. The hotelier’s plans included a $50.3 million capital investment and plans to grow from about 800 employees to about 1,150 during the next five years.

Another major expansion came in November 2022, when roofing and solar company SmartRoof Inc. announced it would shift its headquarters from McLean
to a 25,000-square-foot office in Reston, with plans to add 410 jobs during the next five years.

What most excited Victor Hoskins, president and CEO of the county’s economic development authority, in 2022, though, was news that Jeff Bezos’ commercial space launch company, Blue Origin, was landing a new center of excellence in Reston. Hoskins says the move signals the importance of the county’s proximity to the federal government and major contractors, as well as other assets, such as the Mid-Atlantic Regional Spaceport on the Eastern Shore.

Arlington County

Ryan Touhill started his new job directing Arlington Economic Development in late November 2022. On his second day, government consulting firm Technomics Inc. announced it would invest $1.7 million to expand its headquarters, adding 150 jobs. The company leased an additional 10,000 square feet to increase its capacity to about 40,000 square feet, and is pursuing an additional 10,000 square feet.

Additionally, Newport News-based Fortune 500 military shipbuilders Huntington Ingalls Industries Inc. announced it was adding to its regional presence by signing a 15-year lease for 36,809 square feet in an 11-story office tower in National Landing, with plans to move into the space in 2023.

Touhill says announcements like these are “a great example of what we’re going to focus on.”

While Arlington continues to experience higher-than-average office vacancies, Touhill says the county is working on an initiative that looks at modernizing how it uses buildings to allow for greater flexibility to respond to market needs.

Alexandria

After closing in 2017, Alexandria’s Landmark Mall met the wrecking ball in May 2022, clearing the way for the 52-acre WestEnd Alexandria. The $2 billion mixed-use, infill redevelopment project will include the $1 billion relocation and expansion of Inova Alexandria Hospital, says Alexandria Economic Development Partnership President and CEO Stephanie Landrum.

“It’ll be an entire new community,” Landrum says.

Also getting a major facelift is the city’s former George Mason Hotel, built in 1926 and operated until 1971 before becoming offices and then sitting empty. The 90,000-square-foot building is being transformed into the 134-room, $68 million Hotel Heron, to include meeting space, retail, restaurants and bars. The investment, Landrum says, “signaled that there was a lot of confidence in Alexandria’s tourism market.”

Prince William County

The Northern Virginia Bioscience Center continued Prince William’s movement into life sciences when it opened in Innovation Park in March 2022. The $18 million, 30,000-square-foot lab near George Mason University’s Science and Technology Campus offers space for pharmaceutical, immunotherapy and cancer research. The lab is already home to Virongy Biosciences Inc., which in May 2022 invested $471,000 and added 70 jobs at the center.

“It’s helped us actually be able to respond to leads, because before we didn’t have product to do that,” county Department of Economic Development Executive Director Christina Winn says of the lab.

Prince William landed 42 economic development deals last year, representing $1.28 billion in capital investment and 1,775 new or retained jobs. The county, which has also generated interest from data center developers, currently has about 5.9 million square feet in development to eventually add to the 6 million square feet in operation.

The county’s wins also included an announcement in November 2022 that Granules India Ltd. would invest $12.5 million to establish a pharmaceutical packing plant in Manassas, creating 57 jobs. And in Woodbridge, Kaiser Permanente opened its new, 245,000-square-foot Caton Hill Medical Center, the system’s largest facility on the East Coast.

Other deals

Stafford County has long been a stronghold in the distribution market, and while that hasn’t changed, it’s also diversifying into the tech industry, says Director of Economic Development and Tourism John Holden. In October 2022, UVision USA Corp., a subsidiary of Israel-based UVision Air Ltd., opened a 25,000-square-foot facility in Quantico Corporate Center to build its HERO military drones. Holden says the company will add about 50 jobs.

Finally, Spotsylvania County made a splash in 2022 after county supervisors approved rezoning as well as performance agreements to build a massive new water park. Kevin Marshall, the county’s business development manager, says Wisconsin-based Kalahari Resorts and Conventions aims to open the $880 million project between U.S. Route 1 and Interstate 95 in Thornburg in 2025. Plans call for about 1.38 million square feet of commercial space, a 900-room hotel, an indoor water park and other amenities.

“When they’re up and operational … they will be Spotsylvania County’s largest taxpayer by a longshot,” Marshall says. 

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