Brief Ebola Scare at EPA HQ — Hazmat and EMS teams were dispatched to the Environmental Protection Agency headquarters in Crystal City this morning for a possible Ebola patient. After an assessment by a doctor, it was determined that the patient — a man in his 50s — did not have the likely symptoms of Ebola.
Arlington Launches Startup Competition — Arlington County is partnering with the website Tech.Co to run a contest to attract new startups to Arlington. Starting today, startups can apply for the chance to receive three months of free work and living space, plus free legal advice and public transit funds. [Tech.Co, Arlington Economic Development]
Stolen Car Crashes in Fairlington — A stolen car crashed in a quiet Fairlington neighborhood early Tuesday morning, after fleeing from a traffic stop. The suspects fled the scene and police were unable to track them down. [Patch]
Arlington Artist Survey — Arlington Cultural Affairs is surveying local artists about their needs for space to create art. “We would like to understand the space requirements of artists so that we can optimize the use of our current facilities and plan for future growth… Arlington Cultural Affairs is working both internally and externally to ensure that Arlington’s cultural scene remains vibrant and engaging.” The survey deadline is Sept. 30. [Arlington Arts]
Flickr pool photo by Kevin Wolf
Food truck owners say they saw shorter lines on the first day of Rosslyn’s new zoning pilot program.
The new program, spearheaded by Arlington Economic Development, laid out four dedicated areas for food trucks to park from 10 a.m. to 2 p.m. — 19th Street below N. Lynn Street, Wilson Blvd above Kent Street, N. Pierce Street and Wilson Blvd and N. Nash Street and Wilson Blvd. The new locations didn’t stop Arlington workers and residents from stopping at the food trucks, but owners said they weren’t as busy as usual.
“I know the city tried to make the best,” Arepazone food truck co-owner Ali Arellano said. “They have music, a table and there are a lot of flyers, but at the end of the days, this place is not good for business.”
The music, tents and tables around the food truck zones were provided by the Rosslyn Business Improvement District, which is also supporting the zoning effort.
Arellano parked on Wilson Blvd by the Artisphere’s old location and said he noticed that he had fewer customers than when he parked on N. Lynn Street, the main drag for most food trucks. At 12:45 p.m., he had about five customers in line.
“It is better to go to D.C.,” he said. “There are more people, more businesses.”
The four zones do not include any spots on N. Lynn Street and had the effect of spreading the trucks out rather than concentrating them in one location. Arellano said he believes this will hurt business.
“I think it’s not fair for the food trucks to park in other places,” he said. “The trucks should all park in the same row.”
Food trucks are still allowed to park in other spots in Rosslyn, but they will be limited to the time on the parking meters, usually two hours, instead of the extended four hours offered by the program.
When the trucks are together, they act like a food court, where customers have multiple options, including restaurants that also line N. Lynn Street, Arellano said. With the new zones, customers have to walk further to get the same options.
Moving the trucks off N. Lynn Street did have some bonuses, and not just for the businesses.
N. Lynn Street was a bit calmer and less crowded without the line of trucks, said Arlington resident Stephan Guy, who eats at a food truck daily. When the food trucks were all on N. Lynn Street, he said it was chaotic.
“I do know Lynn Street got absolutely crazy with food trucks,” Guy said. He said he understands the reasoning for the zoning plan, but also observed that some lines were shorter than usual.
Habib Seraj, the chef at food truck Fusion Confusion Inc., also saw shorter lines today. The truck was parked on 19th Street in an area with less foot traffic than N. Lynn Street or the Wilson Blvd and Kent Street zone.
However, Seraj was more optimistic and said he thought customers were starting to figure out where they could find the trucks. His only problems with the new zoning program was that cars were parked in some of the zone’s reserved spaces and the meters only ran for two hours.
“As long as they take care of the meters and everything, I’ll be fine,” he said.
TSA currently occupies a complex at 601 and 701 12th Street S. in Pentagon City, across from the Pentagon City mall.
It’s planning to move to the Victory Center building at 5001 Eisenhower Avenue, near the Van Dorn Metro station, in about two years. (In 2013, the TSA renewed its lease in Pentagon City for five years.)
The General Services Administration touted the new lease as a money-saving move that will save taxpayers more than $95 million over a 15-year lease. The government is paying rent of $36 per square foot, more than 25 percent below projected market rents, and getting $50 million for tenant fit-out costs and moving expenses.
“This is yet another great GSA-negotiated deal for government and the American people,” said GSA’s Darren Blue, in a press release. The new lease agreement allows TSA to consolidate four locations into one at a rental rate and utilization rate that will ensure the agency is more efficient and effective in executing its mission.”
The City of Alexandria was similarly triumphant in its announcement of the deal.
“GSA’s decision to locate the TSA headquarters at Victory Center is a huge economic boost for Alexandria as a whole, and for the West End in particular,” said Mayor William Euille. “The City is working on a small area plan for Eisenhower West that encourages new investment, redevelopment and business activity. TSA will serve as a catalyst, and will add a daytime office population and on-site retail activity to this developing market.”
TSA has about 3,400 employees at its headquarters, which will boost total employment in Alexandria by four percent after the move from Arlington, according to an Alexandria press release.
“Over the initial 15-year lease, the headquarters is expected to generate close to $16 million each year for Alexandria’s economy,” the city said. “The economic impact includes new salaries and wages for Alexandria residents, and spending by TSA employees and visitors at local businesses. Occupancy of the existing Victory Center building will result in a 3.0% decrease of the City’s overall office vacancy rate (from 16.5% to 13.5%), making it one of the lowest in the Washington, D.C. region.”
This is just the latest office loss for Arlington County, which is coping with relatively high office vacancy rates.
The U.S. Fish and Wildlife Service moved its headquarters from Ballston to Falls Church last year, while the National Science Foundation is planning to move its headquarters and more than 2,000 employees from Ballston to Alexandria by 2017. In both cases, the GSA said the moves would save millions of dollars in leasing costs.
Victor Hoskins, who took over as the county’s head of economic development earlier this year, said the county was disappointed but not surprised by the deal.
“Obviously, we’re very disappointed in the decision to relocate from Arlington,” Hoskins said. “The TSA has called Arlington home for quite some time, and the County worked aggressively throughout the procurement process to try to keep the agency here. The decision aligns with the trend of valuing direct occupancy costs (rent) over the overall costs of siting federal facilities.”
“This move represents a challenge, but not one that was unexpected,” Hoskins continued. “We pledge to continue to move forward with our strategy of diversifying Arlington’s economic base and focusing on bringing fast-growing technology companies, particularly those in the fields of cybersecurity, ed tech, med tech, big data, clean and green tech, and nonprofits/associations, to Arlington.”
“It is a different strategy than Arlington has experienced in the past, but one that we believe will drive us ahead in the future of the office market,” he said.
Photo via Google Maps
The six-month pilot program may prove to be an answer to the ongoing conflict between food trucks and restaurants about where the trucks choose to park.
Restaurant owners in the county’s Metro corridors have claimed that the food trucks’ practice of parking in front of their restaurants has seriously impacted their business, and a group of restaurant owners in Courthouse recently even formed a coalition to lobby for food truck parking restrictions.
The Arlington Economic Development office spearheaded the project in consultation with the Rosslyn Business Improvement District, local restaurants, food trucks, residents and other stakeholders. For now, the pilot will be limited to Rosslyn, with the possibility of extending the project to other areas of the county once its success has been evaluated.
The pilot will set aside 19 parking spaces in Rosslyn for food trucks, for four hours during the day. Between the hours of 10 a.m. and 2 p.m on weekdays, only food trucks will be allowed to park in these spaces. Currently, food trucks are not permitted to stay in a parking space for more than two hours, and some have said that they struggle to set up and do business within that time frame, especially given the competition for such prime parking.
The reserved parking spaces are spread among four zones in Rosslyn, which were decided by AED: on 19th Street below Lynn Street, along Wilson Blvd above N. Kent Street, at the intersection of N. Nash Street and Wilson Blvd and on N. Pierce Street along Wilson Blvd. Notably, there is no reserved food truck parking on N. Lynn Street, Rosslyn’s main drag, which is where most food trucks currently park.
BID President Mary-Claire Burick says she hopes these reserved parking zones with extended time limits will give the trucks increased flexibility, but emphasized that trucks will still be free to park in other spaces.
“This is not a limiting project,” said Burick.”This is to expand and make it easier for them to be successful in these other areas.”
At the County Board meeting on Saturday, July 18, AED’s Jill Griffin told the Board that the success of the project would be evaluated over time, but the outcome is likely to be clear within three months of the pilot’s launch.
“We think we’ll be seeing if it works or doesn’t work very quickly,” said Griffin.
The BID will also be involved in evaluating the pilot. Burick said they were very interested in incorporating feedback, and while reports from the food trucks would be their “first barometer” as to the project’s success, BID members also planned to reach out and hear feedback from consumers.
“We’ll be out and we’ll be listening, and we’ll be incorporating that feedback with the County,” said Burick.
Burick said the BID has plans in the works for a week of kick-off celebrations once the pilot launches, including musical performances, contests and other promotions.
Photo courtesy Rosslyn BID
At least one department within Marriott held a staff meeting Monday in which employees were told that the company is indeed planning to move, with the requirement that it move to a Metro-accessible location in the D.C. area, a source tells ARLnow.com. That would suggest that there won’t be a repeat of 1999, when Marriott toyed with the idea of moving to Fairfax County but ended up staying in its current Montgomery County campus when Maryland offered a $58 million incentive package.
This time around, Marriott plans to have Maryland, Virginia and D.C. all compete for the headquarters, we’re told. Marriott’s current lease expires in 2022.
Arlington Economic Development officials think history may be on their side in its effort to woo the Fortune 500 company and its 2,000 employees.
“Arlington was the site for Marriott’s first motor hotel in the 1950’s, and as such we are eager to present our compelling business story to the Marriott team,” said Christina Winn, director of the Business Investment Group at AED. “Arlington is home of numerous global headquarters such as the 357,000 square foot expansion of Corporate Executive Board and the recent announcement of 217,000 square feet for Lidl’s U.S. corporate headquarters, and Marriott would be a welcome addition.”
Officials feel Arlington is well positioned to capitalize on the shift from increasingly out-of-fashion suburban office parks — of which Montgomery County and Fairfax County have plenty — to walkable, transit-accessible and amenity-rich urban areas.
Also planning a move out of its suburban office campus is TEGNA, the recently spun-off broadcast and digital arm of USA Today publisher Gannett.
TEGNA announced today that it has agreed to sell its Tysons Corner headquarters for $270 million and is now embarking on a search “to find the most appropriate space to meet our company needs.” Could that be Arlington?
It’s early in the process, but the county will be able to play the company history card again: Gannett was based in Rosslyn until 2001.
Advisory Board Considering Vacant Rosslyn Tower — The D.C.-based Advisory Board Company is considering a move to Arlington — specifically, to the vacant 1812 N. Moore Street office tower in Rosslyn. The tower is the tallest building in Arlington and has remained without a tenant since it was completed two years ago. Arlington and Virginia officials are facing off with D.C. officials in an effort to woo the $2.4 billion company. [Washington Post]
Sewage Spills in Arlington — Two separate sewage spills were reported in Arlington this weekend. On Saturday, the county alerted residents that a broken sewage pipe had released sewage into Donaldson Run. On Sunday, the county warned of a raw sewage release in Four Mile Run, near the 700 block of Arlington Mill Drive. Residents should avoid Four Mile Run from the site of the spill to the Potomac, the county said. [WTOP]
GGW: County Must Seek Transit Consensus — As Arlington begins to chart a course for its next generation of smart growth, one pro-transit writer says the county should do a better job of seeking support for its future transit investments. “As we recently learned from the fallout over the streetcar, broad-based support has to be a top priority for any project,” writes Dennis Jaffe. “If it’s not there, sustainable transportation projects won’t be so sustainable.” [Greater Greater Washington]
Flickr pool photo by John Sonderman
Arlington County has started running a new video series on its local cable TV and YouTube channels.
As the county works to shrink its high office vacancy rate — it was recently reported to be 21 percent — Arlington TV has started featuring “awesome offices.”
In a video released last week, Jessica Miller, co-chair of Arlington Economic Development’s Arlington Real Estate Group, leads viewers on a tour of LMO Advertising, which is based at 1776 Wilson Blvd, between the Rosslyn and Courthouse Metro stations.
LMO, the largest advertising agency in the D.C. area and the Arlington Chamber of Commerce’s 2015 Business of the Year, has the kind of light, airy and amenity-filled office one might expect of a creative agency or a tech company.
Among the notable features:
- Game room with Xboxes and ping pong tables
- In-house, sound-proof studio
- 3-D printer
- Standing desks
- Star Trek-themed conference rooms
- Green roof and rooftop patio with Wi-fi
Scott Laughlin, co-founder of the agency, said that there’s an economic argument for putting ping pong tables, autographed guitars and video game consoles in a work environment. It comes down to building a collaborative, team environment.
“You don’t need an office to do the work we do anymore,” he said. “What you do need is a home, a place where people want to come and be and spend time with others.”
Graduation Live Streaming Nixed — Arlington Public Schools canceled internet live streaming of its high school graduation ceremonies this year due to budget cuts. Graduation ceremonies has been streamed online for the past two years. [InsideNova]
Police Foot Chase in Pentagon City — Last night, after the Pentagon City mall was evacuated due to a power outage, mall security spotted two men lingering and entering closed stores. Police were given a lookout and one of the alleged suspects was spotted outside the mall. A foot chase ensured and the man was apprehended behind nearby Pentagon Row. No word yet on any changes.
Economic Chief Has a Plan For Arlington — New Arlington Economic Development Director Victor Hoskins says he has a plan for economic growth in the county that will reduce the county’s office vacancy rate from the current 21 percent to 10 percent over the next six years. The plan includes “a mix of much more aggressive marketing efforts, incentives and other government aid, and the help of ‘frenemies’ in competing local governments such as the District and Alexandria.” [Washington Business Journal]
A-Town Plans ‘Sunday Funday’ Summer Kickoff — “Ballston’s rowdiest bar,” A-Town Bar and Grill, will be kicking off its summer “Sunday Fundays” this weekend with “squirt guns, beach balls, popsicles, barbecue, water balloons” and multiple DJs. [Clarendon Nights]
Greenbrier Learning Center Gets New Home — Facing the loss of its lease at the Greenbrier Baptist Church, the Greenbrier Learning Center has found a new home. The center, which provides after school enrichment to children, will be based at the Arlington Mill Community Center, after the Arlington County Board on Saturday approved a partnership with GLC. [Arlington County]
State, County Incentives Lured Lidl — German discount grocery chain Lidl is setting up its U.S. headquarters in Arlington, near Potomac Yard, and creating 500 jobs in the county. The decision was made after Virginia Gov. Terry McAuliffe offered $7 million in economic development grants and Arlington County offered $7.5 million in infrastructure improvements and tax breaks, including half off Lidl’s Business, Professional and Occupational License tax. [Washington Business Journal]
Australian Restaurant Eyes August Opening — Oz, a new restaurant coming to the former La Tagliatella and Restaurant 3 space in Clarendon, is expected to open by the end of August, according to a help wanted ad on Craigslist. [Patch]
Rescue on GW Parkway — Arlington County’s technical rescue team helped to rescue a person who fell down a steep embankment along the GW Parkway’s second overlook Sunday night. The victim was loaded on to a fire boat and then transported via an Arlington ambulance to a local hospital for treatment. [Twitter]
Drew Students Make Music Video — A group of 10 Drew Elementary students are getting some local media recognition for a music video they made. As part of an extracurricular project on self-image, beauty and bullying, the group made a video set to Selena Gomez song “Who Says.” [WUSA 9]
Tree Down After Storms — A large tree fell in Towers Park during yesterday’s storms. [Twitter]
Arlington Scores Lidl HQ — Arlington County will be the home of the new $77 million U.S. corporate headquarters of Lidl, a discount German grocery chain that’s seeking to expand in the United States. The headquarters is expected to create 500 new jobs in Arlington and will anchor the National Gateway office development near Potomac Yard. “Lidl chose Arlington for its U.S. corporate headquarters because of our commitment to diversifying our economy, a terrific workforce, regional transit connections and access to a major airport,” Arlington County Board Chair Mary Hynes said in a statement. [Arlington County]
Arlington Teen Advances in Singing Competition — Kenmore Middle School student Samantha Rios, who is competing on the Telemundo singing program “La Voz Kids,” has advanced to the semifinals and is now being coached by Reggaeton musician Daddy Yankee. [Washington Post]
Young Republicans Blast Anti-Gun-Store Tactics — Opponents of a gun store that’s trying to open in Cherrydale are urging their supporters to confront the owners of the store and the shopping center in which it’s opening in person. That has Republicans crying foul. “Having exhausted reasonable avenues, the anti-gunners encourage their flock to harass property owner,” said the Arlington Falls Church Young Republicans. [Twitter]
Immigration Center to Open in Crystal City — A planned immigration services center in Crystal City, which has been delayed due to legal wrangling over President Obama’s executive action deferring the deportation of certain illegal immigrants, is now reportedly set to open soon. Hundreds of U.S. Citizenship and Immigration Services employees will be working out of the office building at 2200 Crystal Drive, processing immigration applications and petitions. [Breitbart]
Praise for ‘Alice’ Production — The Encore Stage and Studio production of “Alice in Wonderland” is garnering critical kudos for its star, Brandi Moore, a Harvard-bound Washington-Lee High School senior. The show wraps up its run this weekend at Thomas Jefferson Community Theatre at 125 S. Old Glebe Road. [InsideNova]
Flickr pool photo by Erinn Shirley
Hoskins started his new position 10 weeks ago, succeeding the late Terry Holzheimer, who helmed AED for nine years. Hoskins said Arlington didn’t necessarily do anything wrong under Holzheimer and interim director Cindy Richmond, but it could have done more to position itself for the future. The energetic Hoskins decided to quote Wayne Gretzky to make his point.
“You’ve got to be able to go where the puck is going,” he said. “Arlington didn’t do that.”
Because Arlington’s economic development plan was too stagnant and dependent on the federal government, “the bottom dropped out” of the commercial real estate market when the Base Realignment and Closure Act left 3 million square feet of office space vacant. That would leave any jurisdiction in a lurch, but Arlington has yet to recover.
In the latest AED economic indicator report, Rosslyn is reported at 28.7 percent vacant, up from 24.9 percent last year. Ballston is at 19.7 percent, up from 14.7 percent last year. The county as a whole is now at 20.5 percent vacant, up from 19.3 percent last year. The only sector that gained commercial tenants was Crystal City, whose vacancy rate dropped from 23.6 percent to 23.
According to AED Deputy Director Alex Iams, the Department of Defense didn’t just leave Arlington, it left some of the hardest buildings to fill in Arlington.
“The average vintage year of the office space left by BRAC is 1974,” he said. “The buildings that are less than 10 percent vacant are 98 percent occupied. In the buildings with more than 10 percent vacancy is where the bulk of the vacancy lives, about 8.6 million square feet.”
Arlington isn’t just losing office space, it’s losing office workers, too. Total employees in the county were down 1.4 percent in the second quarter of 2014 from the previous year, according to the Virginia Employment Commission; a net loss of 1,841 jobs. Wages also dropped slightly, from a weekly salary of $1,520 in 2013 to $1,511 last year.
Despite these foreboding economic indicators, optimism is high around AED. There are more than 10 million square feet of office space in the development pipeline, including almost 600,000 currently under construction. Arlington’s office costs are cheaper than D.C. and comparable to the other inner suburbs, an AED study found, and the whole region is struggling to gain new tenants to make up for BRAC and sequestration losses.
But Hoskins is presenting a plan he calls “The Way Forward” to drag the county out of its commercial real estate doldrums. It includes an aggressive — and expensive — rededication to economic development. Hoskins’ goal: fill 4.5 million square feet of office space in the next three years.
“You have to think a different way or you will lose,” he said. “We are going after the market. We can’t sit here and wait for the market.”
He has three solutions, which he calls a 100 percent solution, a 50 percent solution and a 25 percent solution. The 100 percent solution includes an additional $3.95 million for economic development every year for the next three years, including a $1.4 million incentive fund and $1.2 million for business development, the equivalent of 10 new jobs.
AED forecasts the return on investment from this solution to be 4,000 jobs a year, and $20.6 million in tax revenue.
At 50 percent, Arlington would invest $1.45 million, not offer any incentive fund, instead focusing the money on business development, marketing and tourism promotion.
Hoskins has already made AED more aggressive. He sent Arlington’s first team to the annual SxSW conference in Austin, Texas, targeting the major tech companies and enticing them to move to Arlington. AED hosted a delegation from China looking to invest in the county, and he’s brashly confident about its possibilities.
“We’ll probably get 20 deals out of that,” he said.
Hoskins was brought in after serving as the head of economic development in Washington, D.C., where he brokered deals with international companies and tech incubators. He worked for less than a year as the economic development chief in Prince George’s County before being hired at the county, and he has interpreted his mission to change the way Arlington does business.
“The institution has to make a decision to change,” he said. “I believe changes are on the way. I have not gone to a place that did not change. That’s what I bring, but change is bumpy. You’re going to have conflict just because you are trying to get better, and that’s okay.
“We were standing still for a while,” he added. “Now we’re going forward.”
One possible explanation for the lack of participation in a program that could save companies thousands of dollars a year: many local tech companies say they haven’t heard about it.
Last year, the Arlington County Board approved a measure “to broaden the Technology Zone incentive program for new technology companies.” The action was trumpeted in a press release by then-County Board chair Jay Fisette.
“These updates reflect the reality of a quickly-changing tech world,” Fisette said at the time. “I said that we would lay the groundwork this year for Arlington to become a hub of the innovation economy. This update to our Tech Zones is a big step in the right direction.”
As of March 19, however, only eight businesses had applied and subsequently qualified for “Technology Zone” status for their 2014 taxes, according to Deputy Commissioner of Revenue Ann Bisson. She could not say which companies had qualified nor how much local tax revenue those companies represent.
“Because of the nature of the tech business currently having so few companies applying, I am not allowed by law to give you that information in this case,” Bisson said. “Virginia law prohibits us from giving out any kind of information where it could be determined what one company has in income.”
In order to qualify, a company has to prove that it meets the following requirements:
- Has been in business in Arlington for no more than 18 months, or has grown in full-time employment by at least 25 percent within the past 12 months.
- Is located in a commercial building in Arlington.
- “Has a primary function in the creation, design, and/or research and development of technology hardware or software.”
It’s unclear how many of the current crop of up-and-coming media- and service-oriented tech companies — Uber, Snapchat, Airbnb, Pinterest, Spotify, etc. — would qualify under of that definition.
“The use of computers, telecommunications services, or a web page or internet site shall not, in itself, be sufficient to qualify as a qualified technology business,” according to county code.
For those that do qualify, the savings are significant: the Business, Professional and Occupational License (BPOL) tax rate is reduced from $0.36 for every $100 of a business’ gross receipts, to between $0.18 and $0.10, depending on the size of the company.
“Arlington Economic Development (AED) estimates that the updated incentives would amount to a five-year benefit from about $39,000 for a 20-employee company to $155,000 for an 80-employee company – an average savings of $2.25 per square foot, if applied to annual rent for companies that qualify,” according to the 2014 press release.
ARLnow.com reached out to a number of the Arlington-based tech firms we have profiled for our Startup Monday feature. Of those that responded, most said they would likely qualify for the incentive, but none had heard of it before we reached out.
“Without you pointing it out, I’m not sure we would have figured it out,” said the founder of a Clarendon-based startup, who declined to be identified. “We use an out-of-state accountant and this is a pretty hyper-local set of incentives. We certainly would sign up, now that we know it exists.”
Raymond Rahbar, founder and CEO of UberOffices, which houses at least a dozen local tech startups at its Rosslyn coworking space, said no one has reached out to him or his company about informing its members of the incentive.
Rami Essaid, the founder and CEO of Distil Networks in Ballston, also said he had not been contacted. However, he said incentive program is small potatoes for startups that hope to scale into billion-dollar businesses.
“When you are in hyper growth, you care more about big picture things like being able to continue to scale and not optimizing little things like taxes,” Essaid told ARLnow.com. “That said, Arlington I feel like has done many of the right things to foster an environment for scale. That means having the right talent pool, good community events, etc. The extra tax perks are nice bonuses but they don’t influence our reason for being in Arlington.”
Ironically, despite being an incentive for tech companies, little information about the program can be found on Arlington County’s own website.
There’s a blurb buried deep on AED’s website, but no information about how to apply for it. “Contact Arlington Economic Development for specific details,” the page said.
We couldn’t find anything on Arlington’s Taxes & Payments site. A PDF document on the site, listing business tax rates, does not list the Technology Zone rate. Neither did the paper tax bill mailed by the Commissioner of Revenue’s office. When we asked about it last month, we were referred to the Tech Zone’s section of county code itself.
Marriott International occupies 900,000 square feet of office space in Bethesda, but CEO Arne Sorenson told the Washington Post last month that the hotel chain with more than $12 billion in annual revenue “will be moving.” Sorenson said he still wants the company to stay in the D.C. region, and made more comments sure to make Arlington real estate owners’ ears perk up.
“I think it’s essential we be accessible to Metro and that limits the options,” Sorenson told the Post’s Jonathan O’Connell. “I think as with many other things our younger folks are more inclined to be Metro-accessible and more urban.”
Sorenson also said Marriott has engaged with “local leaders,” but the company won’t move for several years; its lease in Bethesda expires in 2022.
A giant tenant like Marriott doesn’t come to market very often, and it would be a huge get for Arlington Economic Development, which is still reeling from the impending loss of some large tenants like the National Science Foundation. If the hotel chain moves its headquarters to Arlington, it could occupy almost triple the combined space of recently touted deals for Accenture (90,000 square feet in Ballston), CNA (175,000 square feet in Clarendon) and Graham Holdings (35,000 square feet in Rosslyn).
“Because Marriott is, from what I’m reading, a 700,000-800,000-square-foot group, they would sign a long-term deal with probably some new construction,” Arlington Chamber of Commerce Chairman Kevin Shooshan told ARLnow.com today. Shooshan is also the vice president of Shooshan Company, a Ballston-based real estate firm. “Because of the size of that deal, it’s very attractive to everyone involved in the real estate market. Marriott has good credit. It would be twice the size of [Rosslyn-based] Corporate Executive Board. All parties on the commercial side are interested.”
Shooshan said the number of jobs Marriott would bring — more than 2,000 work in Bethesda — could be a boon for the county’s economy, including the added employee spending on retail, restaurants and housing. Another benefit would be the real estate revenue. Arlington’s commercial real estate market has stagnated in recent years, and landing Marriott would be a financial windfall.
“A headquarters tenant like that brings in tens of millions of dollars in real estate taxes over a 10-15 year lease term,” Shooshan said, “and hopefully that term turns into a true long term headquarters location, resulting in hundreds of millions, not to mention more sales and entertainment spending, more residents, more traffic for hotels, restaurants, etc.”
Where could Marriott go in Arlington? Real estate publication Bisnow created a list of 16 potential places it could relocate in the D.C. area that fit its criteria, and four are in Arlington:
- The site of the Key Bridge Marriott in Rosslyn, the longest continually operating Marriott in the company’s portfolio
- 1812 N. Moore Street, the Monday Properties skyscraper in Rosslyn that opened in October 2013 but still sits vacant. That building holds 560,000 square feet, so it could be paired with planned, 513,000-square-foot redevelopment of 1400 Key Blvd just steps away
- PenPlace in Pentagon City, a sprawling, 2.1 million-square-foot planned office park owned by Vornado and already approved by the Arlington County Board
- Crystal City, where Vornado owns a number of office towers that are already vacant and ripe for redevelopment
Arlington Economic Development spokeswoman Cara O’Donnell couldn’t confirm if AED or anyone else from the county have been in talks with Marriott. She did, however, make it known that Arlington will be lobbying hard for the hotel powerhouse.
“Marriott’s corporate headquarters would be an ideal fit for Arlington,” O’Donnell said in an email. “We are known for our urban villages and metro accessibility, which have been cited as important factors both in Marriott’s search criteria and in hiring and retaining the best workforce.
“Arlington has several existing and build-to suit sites that accommodate Marriott’s needs for a corporate campus,” she added. “Additionally, Arlington is also already home to nine Marriott properties and 3,300 Marriott rooms. These factors all demonstrate Arlington would be a model location for a headquarters of a premier hotel operator.”
Marriott is expected to have its pick of just about every local jurisdiction, in Maryland, the District and Virginia. We’re told also Tysons Corner figures to be a premiere player with its new Metro stops and massive redevelopment plans.
Marriott’s decision is several years away, and the competition will only get fiercer. Although AED would not comment on what type of package it would offer Marriott, it’s worth looking at what CEB received in exchange for simply staying in the county and the state: $4.5 million from the governor’s office, $5 million from the Virginia Economic Development Fund and a pledge from Arlington County to match any funding for infrastructure improvements.
CEB’s 15 stories in the under-construction tower that will bear its namesake will contain 350,000 square feet of floor area. Marriott should occupy at least twice that. Wherever it goes, it likely will see a significant financial commitment from its new home.
In a move long anticipated by some in the Arlington business community, the Arlington County Board approved the licensing of its ConnectArlington fiber optic network to private businesses.
The “dark fiber” will first be installed along the Rosslyn-Ballston corridor, Glebe Road, on Columbia Pike and in Crystal City. It’s currently used to connect county government and schools facilities at “unprecedented” internet speeds, but, within a few months, businesses will be able to take advantage.
“This is an exciting step forward in Arlington’s plan to be a technological hub in our region,” County Board Chair Mary Hynes said in a press release. “Arlington’s strategic investments are building a technology infrastructure second to none, that will help us attract the businesses of the 21st century. Just as Arlington had the foresight to insist that Metro be built under the heart of our commercial corridors, it had the foresight, when building ConnectArlington, to build in additional capacity to meet future needs — for our businesses and County government.”
The first phase of expanding the program — adding fiber strands to the first 10-mile stretch in the county’s prime economic areas — is expected to cost $4.1 million up front, with a continuing $700,000-$800,000 operating cost.
Phase II of the program would add fiber to Shirlington, Lee Highway and western Columbia Pike, as well as run the fiber next to Arlington National Cemetery and the Pentagon (the red line in the map to the right). This stretch won’t be installed until the county evaluates the performance of Phase I.
County Board member Jay Fisette spoke to ARLnow.com in October about ConnectArlington, one of the initiatives he pushed last year for his economic competitiveness platform as board chairman.
“Innovation is not restricted to the private sector,” he said. “The capacity we’re putting into the network and making it accessible is an asset and competitive advantage over other jurisdictions.”
One of the speakers at Saturday’s County Board meeting, Jaroslav Flidr, said he works for the University of Maryland providing “services on top of dark fiber.” He praised the county for their decision, saying it has positioned itself for landing significant future office development.
“We have federal agencies like NASA, NIH and NSF [as clients],” Flidr told the Board. “In my experience, when these agencies look for where to locate future development, access to assets like dark fiber is, in their mind, one of their most important factors in their decision-making process; where to go, where to stay, where to relocate.”
Angela Fox, CEO of the Crystal City Business Improvement District, also lauded the program as an economic boon to the county.
“We can use this as an economic development tool to attract businesses to the area,” Fox said. “We want things like this, we need things like this, because it is a vicious market. We need tools in our toolbox to demonstrate why Arlington is a place they should be doing business.”
The county will license 864 strands of fiber to individual buildings and businesses, hicho can install connections to its lines and promote is as an asset, according to the staff report. The connections to the fiber must remain inside Arlington, to ensure it benefits the county and not one of its regional competitors. Each company can license a maximum of 40 strands at at time.
The county will charge licensing fees and recoup its costs, it says, but doesn’t yet have revenue projections because it’s unclear how the market will respond to the new, high-tech infrastructure.
Map (bottom) via Arlington Economic Development. Disclosure: The Crystal City BID is an ARLnow.com advertiser.
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Flickr pool photo by Erinn Shirley