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.
Two Rescued From House Fire — Arlington County firefighters battled an early morning house fire in the Old Glebe neighborhood overnight. Two adults were rescued from the roof of the three-alarm fire. An ACFD spokesman said hoarding conditions inside the home made battling the blaze more difficult. [WUSA9, WJLA]
Two Trees Considered for ‘Specimen’ Status — The Arlington County Board will vote this weekend, then hold a public hearing, then vote again next month, to determine whether two trees should be protected with a “specimen tree” designation. [Arlington County]
Future of Arlington’s Office Market — The Arlington County Board held a work session Tuesday to discuss the future of the office market in the county. Arlington Economic Development produced a video that discusses how the office market is changing and how that pertains to local policymaking. [YouTube]
Anti-DACA Bill Defeated — A bill that would have denied in-state tuition to some immigrant students has been defeated in the Virginia state senate. Last week, Arlington’s Del. Alfonso Lopez (D) vowed to fight the bill, which was aimed at students who had been protected from deportation by the Obama administration’s Deferred Action for Childhood Arrivals (DACA) program. [Virginian-Pilot]
Flickr pool photo by Erinn Shirley
Hoskins was announced Friday afternoon as the successor to lead Arlington Economic Development after former director Terry Holzhiemer died of a heart attack in March. Holzheimer had led the department since 2005. Cindy Richmond has been serving as acting AED director in the interim.
Hoskins comes to Arlington after serving as Prince George’s County, Md.’s deputy chief administrative officer for Economic Development and Public Infrastructure. Hoskins started in that position on June 16 this year. Before working for Prince George’s, he was D.C. Mayor Vincent Gray’s deputy mayor for planning and economic development from 2011 to earlier this year.
“Victor will bring a wealth of experience, creativity and dynamism to our team. He will be leading AED at a time of increased challenges and opportunities for Arlington,” County Manager Barbara Donnellan said in a press release.
Hoskins has a long track record of working in D.C. and Maryland in both housing and economic development, serving as former Maryland Gov. Robert Ehrlich’s cabinet secretary of the Department of Housing and Community Development. From 2009-2011, he was the vice president of Quadel Consulting, a District-based affordable housing consulting and training firm.
“I’m excited to join the Arlington team, and look forward to marketing a County known across the nation as a leader in transit-oriented, sustainable development,” Hoskins said in a statement. “I can’t wait to be a part of this innovative government that holds itself to the highest ethical standards and promotes a healthy work-life balance.”
When Prince George’s County Executive Rushern Baker hired Hoskins in the spring, he told the Washington Post Hoskins “is someone who is known in the region as a person who is getting things done.”
Photo courtesy Arlington County
A new, county-funded study, polling young professionals who live and/or work in Arlington, found those who live in the county do so because of their job, not necessarily because of its amenities or social scene.
The study was conducted by the Southeastern Institute of Research on behalf of Arlington Economic Development, and polled 400 residents who identify as either Millennials or Generation X-ers. Of those polled, 139 live and work in Arlington, 137 live in Arlington and work elsewhere and 124 work in Arlington and commute from the surrounding area.
Of those who live and work in Arlington, 45 percent said they live in the county because of their job or because of “professional opportunities,” while 39 percent of those who live in Arlington and work elsewhere said they are in the county for professional reasons. “Location” was the second-most popular reason given to live in Arlington, followed by “friends/social scene.”
“Arlington County does not appear to be an area [young professionals] consider initially beyond a focus on a job opportunity,” the study’s authors, two AED interns, write. “It is not a place with YPs who have strong roots there or who are moving there for the people. With this being a strength, Arlington County should lead with jobs when promoting the area to YPs. During a time when it is hard for young people to find a job, this may prove a great strength for Arlington.”
Young professionals, despite moving to Arlington largely for work reasons, like living in the county, with 89 percent of people who live in the county calling it “a great place to live.” Eighty percent of respondents who live and work in the county also called it a “great place to live.”
“There is a great opportunity among those who only work in the County to showcase the reasons why Arlington is a great place to live,” the study says. “These respondents are not likely to recommend Arlington County as a place to live and when asked if they were to consider living in the County, only three in ten say they would. One of the goals moving forward should be to decrease these gaps.”
The top reason among those who work, but don’t live, in Arlington for living elsewhere was the cost of housing.
“I couldn’t even rent a spare bedroom for under $1500 in a decent neighborhood,” one respondent said. “Rent/housing is way too expensive.”
Flickr pool photo by Ddimick
Arlington posted the open position on its jobs page this morning. According to county spokeswoman Mary Curtius, the position has been open for six months after interim deputy manager Jay Farr returned to his original post as deputy chief of the systems management division with the Arlington County Police Department.
Farr had replaced former Deputy County Manager Marsha Allgeier, who stepped down about a year ago into a part-time position as assistant county manager of special products, Curtius said.
The salary for the open position is “negotiable for up to $195,000” and the responsibilities include overseeing the Department of Environmental Services, the county’s largest department.
“This executive will be a visionary leader who will focus on overseeing the Transportation, Environmental and Capital Programs,” the posting states. “The Deputy will focus on ensuring that the strategic vision and goals are being met and are aligned with the County mission and vision by providing oversight to all staff associated with the Programs and in collaboration with task forces, citizen groups and other stakeholders.”
The county also announced it was seeking a new director of Arlington Economic Development, who would become the full-time replacement for the late AED Director Terry Holzheimer. Holzheimer died in March of a heart attack. Deputy Director Cindy Richmond has served as acting director since Holzheimer’s death.
In the fourth quarter of 2013, Arlington reported about $813 million in taxable retail sales in its March economic indicators study today. Over the same period in 2013, Arlington had about $786 million, a drop of 3.3 percent. The change can’t be attributed to the unusually snowy winter, either: nearly all of the snow this winter fell in the first quarter of 2014, after these numbers were recorded.
While the retail industry — which includes everything from restaurants to grocery stores to stands in the Fashion Centre at Pentagon City — lost $27 million in sales year-over-year, Arlington’s workforce grew 1.4 percent while its unemployment rate dropped from 3.9 percent in January 2013 to 3.3 percent in January.
In addition, housing prices were up across the board this February compared to last year, with a 2.2 percent bump in single family detached house prices, 3.7 percent for single family attached (like townhouses and duplexes) and a 4.7 percent jump in condominium prices, from $410,339 to $430,115.
Local retail broker John Asadoorian, of Asadoorian Retail Solutions, said the numbers don’t raise any alarm just yet.
“It’s hard to really discern what the drop means,” Asadoorian told ARLnow.com. “The only thing I could say is there hasn’t been that much new retail space delivered in Arlington, which means there hasn’t been a whole influx of new tenants, which means the mix in Arlington is stable. If it’s stable, is it still competitive with other jurisdictions that may be growing?”
Asadoorian referred to Tysons Corner and Georgetown as two areas whose growing retail options could be poaching customers from Arlington’s shops. However, several buildings under construction in Ballston and Rosslyn figure to bump the retail number back up in the coming years, he said.
While those buildings may help the retail market, they may not do wonders for the office vacancy rate in Arlington, which ballooned to 19.9 percent over the past year, a 3.7 percent jump over 2012. A significant chunk of that is from the 35-story 1812 N. Moore Street building in Rosslyn which is still looking for its first tenants.
The office vacancy rate in Rosslyn grew 8.4 percent year-over-year and sits at 25.2 percent, now the highest area in the county. Crystal City, still smarting from BRAC closures, is the second-most vacant neighborhood at 24.7 percent. Only the Clarendon-Courthouse corridor gained more office tenants than it lost last year, with its vacancy rate falling from 11.2 to 9.0 percent.
Restaurateurs Eye Rosslyn — Rosslyn has been long neglected in the restaurant and bar department, primarily because it has been viewed as a place where only fast casual lunch places can be successful. That may be changing thanks to Heavy Seas Alehouse, which has been doing boffo beer and dinner business since it opened last month. [Washington City Paper]
Streetcar Battles Continue — Arlington County Board member Libby Garvey continued her one-woman campaign against the Columbia Pike streetcar from the County Board dais last week. Garvey used her time in the County Board meeting to do a slideshow of streetcar systems that have well-exceeded their budget or which have performed poorly in wintery weather. Meanwhile, the streetcar remains the central issue in April’s County Board special election. [InsideNoVa, Greater Greater Washington]
Tribute to Terry Holzheimer — Acting Director of Arlington Economic Development Cindy Richmond has penned a tribute to her former boss, Terry Holzheimer, who died of a sudden heart attack on March 1. [Arlington Economic Development]
Grand Opening for Arlington Mill Residences — A grand opening ceremony will be held tonight from 4:00-6:00 p.m. for the Arlington Mill Residences, at 901 S. Dinwiddie Street. The four story, 122-unit apartment complex, located next to the new Arlington Mill Community Center, is 100 percent committed affordable. There was a long waiting list for those hoping to live in one of the units.
Arlington Woman on Jeopardy Tonight — Arlington resident Nancy Akerman, who works as a science policy fellow, will compete on Jeopardy tonight. The game show airs at 7:30 p.m. on WJLA (ABC 7).
Richmond Named Acting AED Director — Cynthia Richmond has been named the acting director of Arlington Economic Development following the untimely death of Terry Holzheimer. Holzheimer died of a sudden heart attack over the weekend. Richmond was serving as the deputy director of AED. Arlington County plans to begin a recruitment process to find a permanent director for AED soon. [Arlington County]
FBI Cracking Down on Corruption in N. Va. — The FBI has created a task force to investigate public corruption in Northern Virginia. Public corruption is the FBI’s “number one criminal investigative priority” at the moment and the agency has “cases in all categories in Northern Virginia.” [Loudoun Times]
Man Sentenced in $30 Million Fraud Scheme — A Florida man has been sentenced in a $30 million scheme that defrauded NASA into awarding contracts on false pretenses. Michael Dunkel, 60, was awarded contracts by NASA intended for minority-owned businesses by claiming he was an employee of an Arlington company supposedly run by a woman of Portuguese descent. Dunkel in turn paid kickbacks to the company. [Associated Press, U.S. Justice Department]
APAH to Purchase Apartment Building — The Arlington Partnership for Affordable Housing is purchasing the Arna Valley View apartments near Glebe Road and I-395. The purchase will allow 101 apartments to remain as committed affordable housing for at least the next 60 years. [Sun Gazette]
Fundraising for Pike Documentary Book — Photographer Lloyd Wolf is raising money to print a book based on photos taken by the Columbia Pike Documentary Project. [GoFundMe]
Photo courtesy Kimberly Suiters/All News 99.1 WNEW
Holzheimer, who turned 66 last month, died of a heart attack. A McLean resident, Holzheimer has served as Arlington’s top economic development official since 2005.
Arlington County issued the following press release about Holzheimer’s untimely passing.
Terry Holzheimer, director of Arlington Economic Development, (AED), has died, Arlington County Manager Barbara Donnellan confirmed today.
“Terry’s family has informed me that Terry died today of a heart attack,” Donnellan said. “I am deeply saddened by this tragic news. Our hearts go out to Terry’s family.
“Arlington has lost a dedicated public servant and a leader who worked for decades to build one of our nation’s most successful and stable communities,” Donnellan said. “Terry was respected across this region as a leader in economic development. His many accomplishments can be seen and felt across our County.”
“This is a double tragedy for Terry’s family,” Donnellan said. “Just six weeks ago, his wife of 34 years, Mary Benedette Pelletter-Holzheimer, died after a long illness.” Terry is survived by his daughter, Francesca, and her husband, Joseph Hammerstrom.
The family has not yet announced funeral arrangements.
From Holzheimer’s official county biography:
Terry Holzheimer was named director of Arlington Economic Development (AED) in March 2005. A veteran of the department since 1996, he previously headed AED’s Business Investment Group, focusing on business retention, recruitment, and economic research. He also was responsible for Arlington’s small business development efforts through AED’s BizLaunch Center.
Before coming to Arlington, Holzheimer served as Loudoun County’s director of economic development from 1989-96. His career also includes heading a management consulting firm, Development Advisory Service, Inc., that provided services to local governments throughout the country in housing and economic development. Earlier, he worked for the National League of Cities, consulting with city and county governments on redevelopment and rehabilitation programs.
Holzheimer has a Ph.D. from George Mason University in public policy, with a specialization in regional development. He holds a B.A. in economics from the University of Florida. He is a member of American Institute of Certified Planners (AICP) College of Fellows and is certified in economic development by the International Economic Development Council. He is a member of the adjunct faculty at Virginia Tech, teaching in Urban Affairs and Planning.
Arlington is “still sorting through the mess” of the BRAC closures that have boosted office vacancy rates, an Arlington representative told hundreds of Northern Virginia commercial real estate developers today.
Arlington, like other communities in the D.C. area, is experiencing weakness in the office market. The high office vacancy rate is exacerbated by new office buildings coming on the market and certain large employers (including military offices impacted by BRAC) leaving.
To combat that, Arlington is considering options providing certain incentives to attract new businesses and hang on to existing employers.
“We’re aggressively planning for the future,” Alex Iams, a commercial development specialist with Arlington Economic Development, told members of NAIOP, an association for commercial real estate developers.
“[BRAC] is still a four-letter word in Arlington for certain,” he said. “We did an aggressive plan for Crystal City, we’ve done planning along Columbia Pike. We have done planning for BRAC in Rosslyn as well, so we’re not only doing planning for the future, but now we’re aggressively positioning ourselves to hold on to what we have.”
Iams was one-fifth of a panel with the directors of economic development from Alexandria as well as Fairfax, Loudoun and Prince William counties. He told ARLnow.com that Arlington is considering tax incentives and other methods to try to encourage businesses to grow — and, just as importantly, stay — in Arlington.
“We’re trying to structure a policy on how to address office vacancy,” he said. “We haven’t done it yet, but you can expect to see it at the end of the season.”
With the delivery of the 35-story 1812 N. Moore Street last fall, Iams said Arlington’s office vacancy rate is now hovering around 20 percent, the highest it’s been in nearly a decade. Iams said projects like Monday Properties’ skyscraper, which is still unoccupied after being built “on spec” are “suffering the most, because it’s so much space all at once.”
Iams pointed to the success at 1776 Wilson Blvd, a five-story office building at the intersection of N. Quinn Street. It opened in winter of 2012 and is about 85 percent leased, he said.
What Arlington can do to solve its vacancy rate, Iams said, is to follow Vornado’s example in Crystal City when the first wave of BRAC closures saw the U.S. Patent and Trademark Office move to Alexandria.
“Vornado didn’t just sit on their hands,” Iams said. “There was an adaptation with rents and an increase in amenities nearby, and they transformed Crystal Drive into a retail center.”
Iams also cited Kettler Capitals Iceplex, Penrose Square and the Village at Shirlington as examples of “placemaking” the county has partnered with private businesses on to make specific areas more attractive to employees and residents.
The other economic development leaders lamented the lack of demand for office space while demand for residential units all over Northern Virginia is exploding, creating a tricky regulatory line to walk to ensure balance. Iams said Arlington, despite its vacancy rate, still sees demand for office development.
“We’re getting questions from our board and our community about approving more office space,” he said. “The office market also works in cycles, and we want different kinds of products available to be able to deploy when a certain company or tenant may be searching in our market.”
The National Endowment for the Arts (NEA) announced 59 “Our Town” grant awards totaling more than $4.7 million, and an Arlington project is among the recipients.
Arlington Economic Development-Arlington Public Art has been granted $75,000 to develop a public art project in the planned Nauck Town Square, which is intended to be the anchor for the Nauck Village Center. The County Board must give final approval for the grant as a formality, and that’s expected in September.
“The residents of the Nauck Community are truly thankful to the National Endowment of the Arts for their grant to assist us in planning a Town Square where all can enjoy its benefits and especially learn the history of Arlington County’s oldest African American community dating back to 1844,” said Nauck Civic Association President Dr. Alfred O. Taylor, Jr.
The NEA received 254 applications from across the country for this year’s Our Town grants. Grant amounts ranged from $25,000 to $200,000 with a median grant amount of $50,000.
“It’s very competitive. We’re very excited to be one of 59 chosen from across the country,” said Public Art Administrator Angela Adams.
The Lucky Seven store, which closed after a fire last year, previously occupied the site but was torn down earlier this year. The county had purchased the property at 2406 S. Shirlington Road in 2010 for $1.4 million.
The square eventually will take up the entire block between 24th Road South and South Shirlington Road. The county website says, “It will serve as a gathering place for residents to host a variety of community events and an area to showcase the neighborhood’s rich cultural heritage with its collection of public art.”
Arlington Public Art has commissioned landscape architect and artist Walter Hood to devise the plaza’s final design. Hood will engage Nauck residents and community leaders in the design process to create a plaza that tells the story of the Nauck community and its heritage. Adams credits Hood’s involvement as one of the reasons the NEA considered Arlington for the grant.
“I think that what we’re going to get with Walter’s involvement is a very sophisticated design that continues to make great public spaces here looking contemporary and fresh, but also reflective of the community,” said Adams. “The Nauck community has waited a long time for this.”
Community meetings to discuss the design of the project are expected to start this fall and go into next year. Construction is expected to begin in 2015.
“The County is looking forward to engaging Nauck residents and community leaders in the process of designing the plaza and art elements,” said Helen Duong with the Arlington County Department of Community Planning, Housing and Development.
Funeral for Arlington Firefighter Injured on 9/11 — A funeral will be held today for an Arlington firefighter who was a first responder on 9/11. Phillip McKee III suffered a severe leg injury while battling fires at the Pentagon following the Sept. 11, 2001 terrorist attack. He also inhaled toxic dust and later suffered from post-traumatic stress disorder. His family says McKee, 41, died from complications from those injuries. McKee, who held degrees from Yale and Harvard, was openly gay and is survived by his husband and partner of 15 years. [Washington Blade]
County Officials: No Subsidies for Gov’t Agencies — With the county still reeling from the impending loss of the National Science Foundation, Arlington officials are sticking to their guns and saying that offering tax breaks and other financial incentives to lure federal agencies is bad policy. Arlington Economic Development Director Terry Holzheimer is pushing for the General Services Administration to disclose additional information related to the decision to move the NSF to Alexandria by 2017. “None of it makes any sense,” Holzheimer said of the decision and its impact to other government tenants in Ballston. [Washington Business Journal]
Bluemont Trail Improvements — Arlington County crews will be widening a section of the Bluemont Trail between Buchanan Street and the Ballston Holiday Inn this month. Crews will also be removing obstructions and landscaping around the trail. [Bike Arlington]
SUPERNOVA Photos — Dozens of artists invaded public spaces in Rosslyn over the weekend for the SUPERNOVA Performance Art Festival. Some of the artists and their performances can be seen in a series of photos published the the Ode Street Tribune blog.
Democratic Primary Today — Democrats will go to the polls today in Virginia to vote in the primary for lieutenant governor and attorney general. Among the candidates is Arlington resident Aneesh Chopra, who’s running for lieutenant governor. Polls will remain open in Arlington from 6:00 a.m. to 7:00 p.m. [Arlington County]
The National Science Foundation, Arlington’s 12th largest employer, will be moving to new offices in Alexandria by 2017, employees at its Ballston headquarters were told today.
NSF employs 2,237 people in Arlington, according to Arlington Economic Development data. It’s the county’s 12th largest overall employer and its 8th largest government employer. Located in the Stafford Place I and II buildings at 4121 and 4201 Wilson Blvd, the NSF is also central to Ballston’s science and technology economy.
In a memo (below), NSF Acting Director Cora B. Marrett told employees today that the General Services Administration has signed a lease for a “new state-of-the-art building” at Alexandria’s Hoffman Town Center development, adjacent to the Eisenhower Avenue Metro station.
“We are told that the construction will take approximately three to four years to complete, so we anticipate a move to this new facility by the end of 2016,” Marrett wrote. “GSA has extended our leases at Stafford I and II for the interim.”
The National Science Foundation’s future in Arlington has been up for discussion since 2008, as the agency and the GSA considered whether to renew its Stafford Place lease, which was set to expire in December 2013. Arlington’s congressional delegation — Rep. Jim Moran and Sens. Mark Warner and Jim Webb — wrote a letter to the GSA in February 2010, urging the agency to renew NSF’s lease in Arlington.
Moving out of Arlington could have a “detrimental effect” on the National Science Foundation and on other scientific organizations that enjoy research synergies the Ballston area, like the Defense Advanced Research Projects Agency and the Virginia Tech Research Center, the lawmakers wrote.
“We believe… Arlington [is] the ideal location for NSF Headquarters,” the letter said.
So far, the lawmakers have not commented on the planned NSF move. Attempts to reach numerous Arlington County and Arlington Economic Development officials were not successful.
The National Science Foundation describes itself as an “independent U.S. government agency responsible for promoting science and engineering through research programs and education projects.”
NSF’s 15-year lease in Alexandria will save a total of $65 million on rent, and will provide the government with $35 million “which can be applied to further rent savings, reduce costs of relocation, and reduce overall operational costs,” according to a press release.
The move, a coup for economic development in Alexandria, “would constitute one of the largest transfers of federal workers in Northern Virginia since the Patent and Trademark Office departed Crystal City for Alexandria in 2005,” the Washington Post wrote.
Update at 4:10 p.m. — Arlington County has issued a statement about the National Science Foundation move.
Arlington County is disappointed by the General Services Administration’s announcement that it will move the National Science Foundation’s (NSF) National Headquarters out of Arlington, Arlington County Manager Barbara Donnellan said Friday.
“We do not believe such a move would be in the best interests of the NSF, the federal government or the American taxpayer,” Donnellan said. ”Moving the NSF out of Arlington would run counter to the federal government’s investments over the last two decades in Arlington’s ‘scientific center of excellence’ that serves our defense and national security interests so well.”
Given concerns with GSA’s recent leasing decisions, County officials expect there will be vigorous oversight by Congress and others in the coming weeks. There are many unanswered questions about this announced move, and whether it would achieve the savings that GSA projects. “We continue to believe that Arlington County offers the lowest cost and highest value option for the NSF and other government agencies,” Donnellan said.
Arlington, with its unique mix of vibrant urban villages, a highly educated workforce, proximity to the nation’s capital and excellent transportation infrastructure, is a great place for the federal government to do business.
Update at 4:45 p.m. — The City of Alexandria has released a press release on the move. An excerpt:
“The NSF’s decision to locate its headquarters in Alexandria is a tremendous gain for our entire community,” said Mayor William D. Euille. “Having the NSF headquartered in Alexandria will strengthen our growing knowledge-based economy, and directly contribute to our professional workforce. Our high quality of life, access to public transportation, and cultural charm are key reasons why government and private businesses are drawn to Alexandria.”
City planners project that NSF will spur more than 1,800 additional permanent jobs beyond its own workforce of 2,400, and more than 800 temporary jobs to construct the new facility. This is a 4.5 percent increase in Alexandria’s overall workforce. Over the initial 15-year lease, the headquarters is expected to generate more than $83 million each year for Alexandria’s economy. The economic impact includes new salaries and wages for Alexandria residents, and spending by NSF employees and visitors at local businesses.
Given the extraordinary economic benefit of the NSF to Alexandria, and in order to make the Alexandria sites’ bids as competitive as possible, the City proposed the creation of an Eisenhower Avenue Science Redevelopment District. The property used by NSF would be subject to a lower real estate tax rate, which is projected to be a $23 million value to the property owner over the initial 15-year lease. This would still result in approximately $50 million in new tax revenue to the City during that period, even after the tax incentive is factored in. The creation of the new tax district is subject to public hearing and approval by Alexandria City Council.