A key win

Lidl, a Germany-based discount supermarket chain, is making headway in Virginia, just months after announcing plans to establish its U.S. headquarters in Arlington County.

The company, which operates nearly 10,000 stores in 26 European countries, is moving into its Arlington offices and has broken ground on a regional headquarters and distribution center in Spotsylvania County. It also has purchased a 4.8-acre parcel near Chesterfield Towne Center as the site for its first store in the Richmond area.

The company is investing more than $200 million ($77 million in Arlington and $125 million in Spotsylvania) and has pledged to create 700 jobs in Virginia by 2018. Five hundred positions will be in Arlington. The other 200 will be based at the 82-acre Spotsylvania site, which is expected to open within two years.

The U.S. headquarters will occupy 217,000 square feet at the National Gateway I building in Arlington. It was built about five years ago but had no previous tenants. The company has spent $15.4 million on improvements to the building’s interior.

The county started discussions with Lidl in early 2014. Its main competitor was Charlotte, N.C. “Lidl was highly sought after, and the competition was very tough,” says Alex Iams, assistant director at Arlington Economic Development. “It would have been a prized win for any other community in the running. The most challenging aspect was also the most rewarding — putting together the perfect combination of a real estate site and incentive package to meet Lidl’s needs.”

The state incentives include $4 million in grants from the Commonwealth’s Opportunity Fund and $2 million from the Virginia Economic Development Incentive Grant program. The program awards grants to exceptional projects involving large numbers of jobs promising high wages compared with average pay for a particular area. The Virginia Jobs Investment Program will provide additional funding and services to support employee training activities.

Lidl said Arlington was a top contender for the project because of its location, public transportation system and young and highly educated workforce. These factors presented “an incredible opportunity for Lidl to launch its expansion in the U.S.,” Brendan Proctor, Lidl’s U.S. president and CEO, said in a statement.

Also important was Arlington’s real estate and incentives package as well as the county’s ability to meet Lidl’s timeframe, says Iams. “Additionally the project site benefited from many nearby conveniences and amenities — easy access to the entire National Capital region and close proximity to Reagan National Airport.”

The deal is expected to boost the county’s efforts to diversify its economy and lessen its reliance on the federal spending. “It will provide significant tax revenue and job creation benefits for decades to come,” says Iams.

Arlington Economic Development officials say the Lidl deal is the start of a robust effort to attract international business prospects. Last spring, the department co-hosted a reception for Chinese delegates to the Select USA Global Summit. Recently it was picked to be the sole U.S. host for the global Dongsheng-AC Bridge Entrepreneurship Competition. During the event, targeted early-seed technology companies from around the world competed for cash prizes, office space and access to investors.

“Companies from around the globe are looking for a U.S. base, and, as Lidl’s decision demonstrates, Arlington offers many of the location assets those companies seek,” says Iams. “Our workforce, proximity to the nation’s capital, and strategic location along the East Coast are very attractive, and we are actively exploring ways to enhance these global opportunities between Arlington and other markets.”