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byline: Joan Tupponce

Sensing success

Call it a sixth sense. When CEO Frank Guidone began to restructure Measurement Specialties, Inc. in the early part of the decade, he studied the global sensor market. What he discovered, recalls Chief Financial Officer Mark Thomson, changed the company’s mission.

Guidone found a market that was “extremely fragmented but extraordinarily large. It was growing at a pace two to three times the gross domestic product (GDP). It was a unique opportunity,” Thomson says.

So Guidone shifted the focus of his publicly traded company, opening the door to international growth. The designer and manufacturer of sensors and sensor-based systems sold its consumer product business — a unit that made items such as bathroom scales and tire-pressure gauges — and concentrated on internal development by expanding through strategic overseas acquisitions.

After closing its New Jersey headquarters, where Measurement Specialties had operated since its founding in 1981, the company consolidated manufacturing to two locations: Hampton and Shenzhen, China.

Today, many people have an almost daily connection to Measurement Specialties. If you’ve had an ultrasound, flown on an airplane or used an oven thermometer, the Hampton-based company played a role.  “Almost everything you see and touch has a sensor,” notes Thomson.

Sensors can measure pressure/force, position, vibration, temperature, and humidity and fluid properties. They are  found in products ranging from helicopters and automobiles to hospital beds and appliances. The company’s products can be used as embedded devices by original equipment manufacturers (OEMs) or as stand-alone sensors for test and measurement.

The company’s  first acquisition in 2004 was the French-based manufacturer Humirel, which specialized in humidity sensing technology.
“In the early 2000s one of our acquisition strategy tenets was to get a presence in Europe,” Thomson says.

Since that acquisition, the company has bought 21 businesses. “The vast majority of businesses we have acquired have technology, development and manufacturing capabilities. They are generally niche businesses involved in various sensor [technologies].”

The 120,000-square-foot facility in Hampton, which employs 220 workers, manufactures position and pressure sensors as well as Piezo film, used in a variety of applications including vibration and ultrasound sensors. The location is a plus because of access to the Port of Virginia, major airports and technical talent.

Hampton is one of 10 company sites in the U.S. Globally the company has 3,640 employees — 783 in the U.S., 688 in seven European sites (in Ireland, France, Switzerland and Germany) and 2,169 in two locations in China. “We’ve invested in low-cost regions such as China. This is our 20th year in Shenzhen,” Thomson says.

Worldwide, Measurement Specialties has more than 3,000 customers. In North America, sales are slightly higher than in Asia and Europe, although Thomson says the three markets are almost equal.

The company has seen double-digit growth in the last nine years. From fiscal 2005 to fiscal 2013 it had an 18 percent compounded annual growth rate. “We have been able to capitalize on technology through key development efforts and augment business growth through strategic acquisitions,” Thomson says. Sales rose from $92 million in fiscal 2005 to $347 million in fiscal 2013. 

Last month the company, which trades under the ticker symbol of MEAS on the Nasdaq exchange, hit $1 billion in stock market value when its share  price rose to nearly  $64.00.

The company has been involved in the global market since 1994 when it opened a factory in Shenzhen.

Doing business in Europe is similar to doing business in the U.S. Thomson says France often gets a “bad reputation” because the country’s labor laws are generally not company friendly. Yet Measurement Specialties has fared well there.

“We are located adjacent to a good university, and we are able to recruit extraordinary technical talent,” says Thomson. Plus, the French government provides “incredible incentives. Their research and development tax incentive covers about 50 percent of our investment in R&D projects.”

The tax incentives coupled with access to young, inexpensive, qualified technical talent allows the company to leverage the site for some of its “key product development efforts such as our urea quality sensor [used in emission control systems),” Thomson says. 

 

Economy in Hampton
Thanks to its location near the Port of Virginia and major airports, Hampton has cultivated a diverse economic base. Key industry targets include aerospace/aviation, advanced manufacturing, modeling and simulation and maritime/logistics. Last year Hampton added eight new companies, including Carson Helicopters in Fort Monroe, a manufacturer of helicopter composite tail rotor blades, and Consentino, an importer of fine Spanish quartz and natural stone surfaces. Large employers include NASA Langley Research Center, manufacturer Alcoa-Howmet in Hampton, Measurement Specialties and Specialty Foods Group, which produces processed meats and meat products. The city is developing a 21st Century Science Park through a public/private partnership. The park, close to the National Institute of Aerospace, is expected to be a hub for research and technology jobs.

Economy in Toulouse, France
One of the largest cities in France, Toulouse is known as a hub for the aerospace industry as well as a university center with a large number of engineering schools. Other industries in the city include biotechnology, nanotechnology, information technology and aerospace. The city is home to the headquarters of aircraft manufacturer Airbus. It has about 11,500 employees in the area around Toulouse as well as in the technical complex Toulouse Space Center. Other companies in the city include silicon innovative Intel and satellite system manufacturer Astrium Satellites.

New technology keeps people safe

Fans traveling to this year’s Super Bowl via mass transit didn’t see Gatekeeper Security’s technology at work, but the Sterling-based company was making sure riders were safe from threats. The automatic under-vehicle inspection systems produced by the company allow the underside of vehicles to be searched and drivers and passengers to be screened from a safe distance.

The company’s patented technology can be used on properties with a regular stream of traffic, including oil fields, shipping ports, airports, prisons, trains and hotels.

Chris Millar and Dick Barcus started the company in 2004 after seeing the limitations associated with the standard inspection of vehicles. Inspectors generally use a mirror attached to a long stick to look for any threats. “We took the most inefficient, antiquated inspection technology and said, ‘Why can’t we automate this?’ The germinating idea behind Gatekeeper was using computerization, optical technology and high-speed imaging,” says Barcus.

Gatekeeper’s technology is more effective at detecting threats such as  explosives, weapons, drugs, cash and bombs that are brought into facilities under vehicles. Companies can use X-ray equipment to look inside a vehicle, but that approach is not viable for under-vehicle inspections because of the large amount of metal. “We thought we could come up with a better and safer way to do it,” Barcus says.

The company’s first order, delivered in 2005, went to U.S. Central Command in Baghdad. “You don’t want to have soldiers on a government facility stopping vehicles and inspecting,” Barcus says. “This allows you to move the inspection point out further and take the humans away. A safe standoff distance, from 500 feet to one mile, became life and death in Iraq.”

Gatekeeper’s products come in different languages — Arabic, Russian, Spanish, Hebrew and English — and are sold in 23 countries. They have to work in all types of terrain and weather — from the cold in Northern Russia to the heat and sand in the Middle East and the jungles of Indonesia and Vietnam. “This has to work in the worst weather possible,” Barcus says.

The company also has several commercial customers, including high-end resorts in Kuwait and the seven-star Emirates Palace in Abu Dhabi. “Our ideal market is anywhere there are huge security concerns,” Barcus says. “The Middle East is a very dangerous place, and they have a lot of money to spend for protection. They are our No. 1  market.”

Gatekeeper works with all of the nuclear stations in Russia and several in Spain, as well. “They need help with defending their property,” Barcus says.
The company has five employees at its headquarters in Sterling, four in its office in Dubai and four in its location in Mexico City. Barcus is hoping to add two more employees in the Mexican office because of a rapid increase in business last year.

Gatekeeper recently won a large contract with Mexico to provide license plate reading equipment for its northern and southern borders. “Mexico has very old, under-performing license plate reading technology,” Barcus says. “There were many vendors trying to win that business. We had to show them that the product did what it claimed. We had the best overall performance and economics in terms of price, maintenance and reliability.”

The Mexican federal police and secret service used the company’s technology when President Obama and Stephen Harper, the prime minister of Canada, visited the country in February.

Eighty-five percent of the company’s clients are international. From 2005 to 2013 the Middle East, Indonesia, Vietnam, Russia and Spain represented an overwhelming share of the company’s business. The company also works with the Department of Defense, the Pentagon, U.N. headquarters in New York City and several Federal Reserve banks.

Sales have grown steadily, from six systems in 2005 to 60 last year. The cost of an individual system averages $100,000. “This year we plan to be closer to 130 systems,” Barcus says. “Our technology is more widely known now, and Gatekeeper is respected.”

The company worked with the Virginia Economic Development Partnership to expand its international reach. “We took our first business development trip to Saudi Arabia and Jordan in 2005,” Barcus says. “We took another to Kuwait and Amman, Jordan.”

Barcus and Millar directly support their customers even though they often use authorized distributors. “One of our key attributes is that we take care of our customers better than anybody,” Barcus says. “We love face-to-face meetings and side-by-side comparisons.”

The company currently provides all of the vehicle tracking camera and license plate reading technology for the new Doha airport in Qatar. The small products are mounted in the open on poles or sides of buildings, for example, wherever there’s a good view of the street.

The company also works with a few U.S. military bases in Kuwait as well as hotels in Jordan. After a suicide bombing several years ago at the Grand Hyatt in Amman, Jordan, the city turned its attention to non-invasive ways to monitor traffic. “When bad stuff is going on, that is a Gatekeeper place,” Barcus says. “We are trying to give people tools to make their lives a little safer.” 

Economy in Sterling (Loudoun County)
Loudoun County is constantly diversifying its economy. Industry targets include aerospace, information and communications technology, data centers, air cargo, life and health sciences and government contractors. The county’s labor force has grown 80 percent over the past 10 years. It has more than 900 federal government prime contractors and is home to a large number of data centers, with more than 4.3 million square feet of space. Up to 70 percent of the world’s Internet traffic passes through the county on a daily basis. Large employers with up to 5,000 employees include AOL Inc.; United Airlines; Raytheon Technical Services, which specializes in defense, security and civil markets; and M.C. Dean Inc., a systems integration firm. The county also is home to Washington Dulles International Airport.

Economy in Dubai
The city of Dubai is moving toward a technology-driven economy that will complement its revenues from oil. Dubai was named the overall leading investment destination in the Middle East Cities of the Future 2012/2013 report of  fDi Magazine, a foreign direct investment publication. It came in first in the categories of economic potential, infrastructure, business friendliness and strategy. The Emirate has a diversified list of industry sectors that include logistics, financial services, hospitality, tourism, construction and manufacturing. It attracts many international organizations and multinational corporations because of its focus on the development of information and communication technology. The city is home to the Dubai Biotechnology and Research Park. Companies based in the Emirate include Emirates airline; Halliburton, a provider of products and services to the energy industry; Leisure Corp., which invests in sports and leisure activities; and Advanced Global Trading, an investment group.

A solid year

Last year was a very good year for Hampton Roads, giving it three straight years of solid growth.

The Hampton Roads Economic Development Alliance, which promotes the region around the globe, assisted in six company projects and almost $30 million in capital investment.

“From 2011 to 2013 we have had 18 new announcements that the Alliance has assisted,” says Darryl Gosnell, the alliance’s president and CEO, noting those companies have invested more than $242 million in the area. “We feel like overall that is pretty good considering the conditions we have been dealing with.”
Gosnell was surprised at last year’s results because the area saw fewer prospect visits. “It was down a little from 2012 but the number of announcements we had went up,” he says.

Three of the new companies — generator manufacturer Grandwatt Electric Corp. in Suffolk; Spain-based Consentino, N.A., an importer of quartz and natural stone surfaces, in Hampton and German-based manufacturer PRUFREX USA in Virginia Beach — were international deals. The remaining three — manufacturer Atomized Products Group in Chesapeake, peanut roaster Hampton Farms in Southampton County and Carson Helicopters in Hampton — were domestic deals.

Target industries for the region range from aerospace to advanced manufacturing. To diversify its targets, the alliance brought in a consultant to study the region and find companies in places such as New York and California that would benefit from relocating their operations. “We came up with a list of over 500 companies in eight different industry sectors,” says Gosnell. “We will communicate to those sectors every month or so to give them information relative to their industry and make them aware of the business advantages we have here.”

Newport News celebrated 2013 by opening of the new Apprentice School for Newport News Shipbuilding and by scoring three major expansions by existing businesses. “It was a very good year for economic development,” says Florence Kingston, director of development for Newport News Economic Development Authority. “We had some significant projects.”

The Apprentice School sits outside the shipyard’s gates in downtown Newport News. In addition to the 90,000-square-foot school building, the $70 million project includes workforce housing, retail space and a parking garage. Students began classes in January. “It’s important for the shipyard,” Kingston says. “It will ensure the workforce of the future.”

In addition, three manufacturers announced expansions. Liebherr Mining Equipment Newport News Co., a maker of construction and mining equipment, is investing $45.4 million in expanding operations in Newport News and Hampton. The project will create 174 jobs over a 48-month period. “They are doubling their plant,” Kingston says.

Another company, High Liner Foods, a processor and marketer of frozen seafood, is investing $6.6 million in expanding its U.S. food-service production. The company expects to add 57 new jobs in addition to retaining more than 400 employees.

Also, Canon Virginia Inc. is investing $27 million to add 30,000 square feet of upgraded space on its campus to start making toner for copiers.

In addition, the city, Virginia Tech and Newport News-based construction company W.M. Jordan are collaborating on the creation of a corporate research center adjacent to Jefferson Lab. They expect the project to attract technology and research-based companies. The research center is part of a $250 million development that will include retail and residential space.

Not including retail projects, Hampton had at least $11.5 million in new capital investment and added 179 jobs last year. Eight new companies joined the community. Announced projects include DLBA Robotics, a manufacturer in the composite industry; defense contractor Threat Tec; Spanish-based Consentino, N.A., an importer of quartz and natural stone surfaces; and Carson Helicopters, which will manufacture composite tail rotor blades.

The city also struck a deal for Bay Disposal and Recycling to construct a $1.5 million, 24,000-square-foot addition to its recycling facility. The expansion, will add 32 employees to the company’s existing workforce in Hampton. In addition, Rappahannock Concrete Corp. of Gloucester also built a new concrete plant at the Copeland Industrial Park, creating 15 new jobs.

The city continues to move forward to create the Science Park at Hampton Roads Center North, a public-private partnership between Hampton’s Economic Development Authority and North Carolina-based Craig Davis Properties. “The city continues to fund the Peninsula Technology Incubator located there,” says Leonard Sledge, the city’s director of economic development. “Seven companies are currently in the incubator.”

The land designed for the Science Park is already home to the National Institute of Aerospace. The Economic Development Authority provided a $200,000 grant to the NIA to buy a high-speed computer cluster to help expand its research capabilities. Other companies in the Science Park will be able to use the computer cluster, as well.

Norfolk kicked off 2013 with plans for the redevelopment of the aging Waterside marketplace, a project headed by The Cordish Cos., and the completion of the $25 million Bon Secours DePaul Medical Plaza, including a comprehensive cancer center. “People are so invested in this city. There is an immense energy,” says Steve Anderson, Norfolk’s director of economic development.

In June, Kinder Morgan Energy Partners LP purchased two liquids-handling facilities from Allied Terminals in Norfolk and Chesapeake for about $24 million. Combined, the two facilities, which sit on 119 acres along the Elizabeth River, have 40 tanks with a total capacity of almost 1.8 million barrels of storage. The primary commodities handled at the two locations are refined products, fertilizer and ethanol.

Ninety percent of the city’s economic development announcements last year involved expansions and consolidations. EOS Surfaces, a company that creates innovative surfaces and countertops, relocated to a new facility in the city’s St. Paul area.

Virginia Beach saw 17 new business locations and 20 expansions of existing companies last year with $141 million in new capital investment and plans for the creation of more than 1,200 jobs. “We are seeing signs of a positive uptick,” says Warren Harris, the city’s director of economic development.

The city started the year with a $20 million investment from Green Flash Brewing Co. It purchased 10 acres in Corporate Landing for a 52,000-square-foot microbrewery. In trying to establish an East Coast presence, the San Diego-based craft-beer company considered several locations, including Wilmington, N.C. “It was a real competition. We did our due diligence,” Harris says.

The city also competed with Gainesville, Ga., for the first U.S. manufacturing facility for Germany-based PRUFREX Innovative Power Products GmbH. The company’s $7.33 million investment is expected to create 60 jobs. The plant will supply ignition components for customers including power-tools manufacturer STIHL Inc. in Virginia Beach

Last year the city opened an office in a suburb of Dusseldorf, Germany, to create a presence in the European market. In addition to Germany, target countries include Belgium, The Netherlands, Austria, Switzerland and Italy.

In an effort to ensure a workforce for the future, the city established GrowSmart, an early childhood education program, as part of its workforce development initiative. The program was the recipient of one of 11 Excellence in Local Government awards from the Alliance for Innovation.

Suffolk had its share of large announcements last year, including Unilever’s investment of $96 million in Lipton Tea. (See related story)

The city is making progress on its efforts to revitalize downtown. It is working with The Monument Cos. from Richmond on an $8.8 million renovation of the 100 block of West Washington Street. The space, vacant for 25 years, is being converted into 68 apartments and 5,000 square feet of retail space. “This is Monument’s fourth project in downtown,” says Kevin Hughes, the city’s director of economic development. “This is their biggest project to date” in Suffolk.

The city also has been able to stave off the loss of 3,000 jobs and 600,000 square feet of space resulting from the disestablishment of the U.S. Joint Forces Command. Suffolk’s work with elected officials and decision makers resulted in a name change to the Joint Staff J7, which employs 1,500 and occupies more than 350,000 square feet of space. The Navy Cyber Command moved into 200,000 square feet of the original space and brought in 1,500 people. “It was no small feat,” Hughes says of the project. “It was so rewarding to keep what was originally gone and replace what we had lost.”

Major employers by number of jobs

Huntington Ingalls Industries Inc. (Newport News Shipbuilding)
Newport News
23,000 jobs

Sentara Healthcare
Norfolk
20,000 jobs

Virginia Beach City Public Schools
10,000 jobs

Norfolk Naval Shipyard
Portsmouth
9,000 jobs

Riverside Health System
Newport News
7,050 jobs

Norfolk City Public Schools
6,527 jobs

Chesapeake City Public Schools
6,000 jobs

City of Virginia Beach
6,000 jobs

Newport News City Public Schools
5,550 jobs

Naval Medical Center Portsmouth
5,400 jobs

Source: Hampton Roads Economic Development Alliance

 

Eastern Virginia’s recent deals

Mills Marine & Ship Repair
Suffolk
142 jobs

Bauer Compressors Inc.
Norfolk
130 jobs

Architectural Graphics Inc.
Virginia Beach
125 jobs

Franklin Lumber LLC
Isle of Wight County
72 jobs

Oceaneering International Inc.
Chesapeake
67 jobs

Urology of Virginia
Virginia Beach
66 jobs

PRUFREX Innovative Power Products
Virginia Beach
60 jobs

Hampton Farms
Southampton County
60 jobs

Plains All American Pipeline
York County
60 jobs

High Liner Foods Inc.
Newport News
57 jobs

Sources: Virginia Economic Development Partnership, Hampton Roads Economic Development Alliance

Scoring a save

Kevin Hughes was surprised to learn that, after having a Lipton Tea plant in Suffolk for 58 years, its owner was considering relocating to another city as it reinvested in its product line.  A 2010 telephone call from the company started Hughes, the city’s director of economic development, on a 2½-year quest to keep the company in the city.

The Lipton plant, which has 300 employees, produces 6 billion tea bags a year, nearly all the tea bags it sells annually throughout North America. It was one of London-based Unilever’s first U.S. factories to achieve “zero-to-landfill” status in reducing waste and was a pilot site in installing LED lighting, which reduces energy consumption. Since the Suffolk plant opened in 1955, the company has consolidated its production there.

In making a decision about the Suffolk plant, Unilever wanted to look at all of its options to determine which move would make the most sense economically.
The company had several options, including relocating the plant to Kentucky, North Carolina or South Carolina, states with Unilever facilities. Another option being considered was to build a production facility in Latin America where the company purchases its teas.

The final option was to stay in Suffolk. “They wanted to see if they could be more efficient with their production,” Hughes says. “We heard them loud and clear.”
As they talked about how best to keep the plant in Suffolk, city leaders considered two scenarios. “Since they were so interested in the efficiency side, we offered them … some land opportunities that we controlled if they wanted to build a new facility,” Hughes says.

The city also looked at the deal from an incentive standpoint — how it could encourage an investment in new equipment. It had been taxing the plant’s machinery since 1955.

The city enlisted the aid of the Virginia Economic Development Partnership and the Hampton Roads Economic Development Alliance to secure the project. In the final deal, the city offered Unilever $3.7 million in phased-in local incentives to help with taxes on new equipment. In addition, then-Gov. Bob McDonnell approved a $1 million performance-based grant from the Virginia Investment Partnership program, an incentive available to existing Virginia companies.
Waiting to hear whether the company accepted the deal was difficult, Hughes says. “You know the project is out there, and you have to sit and wait. The toughest part is being patient.”

Unilever looked at different proposals. “They knew what they wanted to do, but it was always evolving,” Hughes says. “We had to keep up with them and stay in the conversation. We had to be proactive.”

The city was able to provide a response to every question the company asked. Hughes, City Manager Selena Cuffee-Glenn and Mayor Linda Johnson traveled to Unilever’s U.S. headquarters in New Jersey to meet with executives and present Suffolk’s proposal. One of the advantages to staying in Suffolk was the plant’s proximity to the Port of Virginia. The company imports loose tea through the port from various countries. That factor, along with the area’s high-quality existing workforce, low cost of doing business and an attractive incentive package, helped Unilever make its decision to stay in Suffolk.

The end result: Unilever decided to invest $96.2 million to expand and upgrade its plant in Suffolk. The company is in the first year of a six-year project.
In addition to 300 jobs, Suffolk would have lost at least $600,000 in annual tax revenue if Lipton had moved out of Suffolk. “This is one of the most rewarding projects I have worked on, a facility that has such a long tradition in the city,” Hughes says.

A new focus

Northern Virginia had a strong year in 2013, thanks to an overall focus on diversification. In light of federal budget cuts, the region is expanding its economic base, moving away from a dependence on government contracts. Counties and cities are pinpointing new, innovative ways to attract business prospects.
Jennifer Ives, director of innovation and strategic partnerships for Arlington Economic Development, sees the county as a “case study for how a community can create innovation districts and move into the new economy.”

Ives says the recent launch of TandemNSI, a public/private partnership involving the private-sector venture capital firm Amplifier Ventures and Arlington Economic Development, builds on the county’s commitment to fast-growth technology product companies by giving them ways to connect more effectively with national security agencies. “The importance of this initiative can’t be overstated,” she says, noting that Amplifer Ventures will make connections between companies and agencies and also will provide the firms with mentors.

The partnership pairs the owners of fast-growth technology businesses with university officials, government program managers, representatives from Arlington-based federal agencies and members of the local business community. The goal is to help technology product companies better identify business opportunities.

TandemNSI is financed by a $350,000 grant from the Virginia Federal Action Contingency Trust (FACT) Fund with an in-kind $150,000 match from Arlington.  FACT invests in initiatives designed to help boost Virginia’s economy at a time when it faces federal budget cuts and changing spending priorities.

The partnership feeds into the county’s three-pronged approach for economic growth — bringing people and ideas together, diversifying the economy and helping entrepreneurs develop their businesses. “You can’t have one of these without the others,” Ives says.

Several new technology-related firms were founded in the county or moved there last year, including Endgame Inc., a cybersecurity technology firm from Texas with more than 30 employees. “They have a technology that no one else has,” Ives says. “They needed to be near their private-sector users and talent.”
Another recent arrival, Distil Networks, a cloud security provider, has tripled its number of employees since moving to Arlington.  Healthcare IT provider PriviaHealth quickly grew to more than 75 employees after its move from D.C.

Other new arrivals include the fast-growing education technology firm Common Application, which moved from Arizona and now employs more than 75 people, and cybersecurity firm Live Safe, founded by two Virginia Tech alums. “They have about 15 employees, have received funding from CIT Gap Fund and other sources and are in the startup growth phase,” Ives says. “They’re a rapidly growing company with a unique and innovative technology.”

The county also was able to snag the first East Coast location for California-based TechShop, a membership-based, do-it-yourself technology-focused workshop and fabrication studio. It offers classes and workshops with access to high-quality 3-D printers and other technology-based tools. The Arlington location opens this spring.

The county is able to attract and retain innovative companies, in great part, because of its sought-after 25-to 34-year-old workforce. “We have the highest concentration [of residents in that population group] in Virginia,” Ives says. “They make up almost one-third of our population.”

Fairfax County, the commonwealth’s most populous county, wants to expand into several industry sectors, including food service, automotive, life science and large-scale construction. “We’re also looking at new areas such as translational medicine,” says Gerald Gordon, president and CEO of the Fairfax County Economic Development Authority (FCEDA). “It works with genetic code, which has 6 billion characters. This is a computer function that requires an IT base, and that is what we have in Fairfax.”

Last year Fairfax snagged the headquarters of Amazon Web Services and its 500 jobs, thanks to the county’s large IT community and its highly regarded public school system. “The public schools are enormously important for us,” Gordon says. “They help us attract the best IT workers from around the world.”

The county also announced that Cvent Inc., which makes event management software, will shift its headquarters from another county location to Greensboro Station in Tysons Corner later this year. Cvent plans to add more than 400 employees in three years, almost doubling its headcount. It will lease about 130,000 square feet of space.

Fairfax also continues to attract foreign businesses. The FCEDA’s overseas offices are in London, Munich, Seoul, Tel Aviv and Bangalore. It also has Boston and Los Angeles offices.

Gordon says that, while the county probably will feel fallout from federal budget cuts in some areas, it also expects benefit from increased spending for cybersecurity. “We are one of the leading cybersecurity business communities in the country,” Gordon says.

Next door in Loudoun County, Buddy Rizer, director of the county’s Department of Economic Development, describes 2013 as a “really big year.” Loudoun continues to be a hot spot for commercial data centers. “We will have an estimated 5 million square feet of new data center space come online over the next three years,” Rizer says. “There hasn’t been one day in the last five years that we haven’t seen data-center construction in the county.”

The commercial side of the county also is technology based. “Seventy percent of the world’s Internet traffic flows through Loudoun,” Rizer says, noting that he is seeing an influx of companies that serve and use data centers. “We have 3,000 technology companies inside data centers doing business here.”

The county scored two additional data centers last year. Construction began on a 450,000-square-foot facility for Corporate Office Properties Trust, representing a $300 million investment, and a 217,000-square-foot data center for Digital Realty Trust, a $20 million investment. In addition, Pohanka Automotive struck a $15 million deal to build a 52,000- square-foot headquarters housing 80 employees.

Expansions include EPL Archives Inc. in Sterling, which is investing $6 million to construct a 38,000-square-foot medical lab.

The county’s growing rural economy includes 43 licensed wineries, representing $5 million in taxable sales. “Seven years ago we had 18 wineries,” Rizer says. “We have a whole team that focuses on the rural economy and works with landholders and farmers in the development of land for agricultural ventures.

Agriculture brings in about $69 million in tax revenues a year and represents a little more than half of the land base.”

The county also is home to 16 German companies. The latest to open a U.S. office in Loudoun is pharmaceutical company Biogrund, which invested approximately $1 million to open a facility. “That is a direct result of our international outreach program,” Rizer says.

Last year also was good to Prince William County, with announcements of capital investment reaching a 17-year high. The county’s Department of Economic Development registered 20 successful projects, which are expected to create 354 jobs and yield $1.04 billion of private capital investment at completion. 

From June 2012 to June 2013, the county recorded 160 new businesses. “Prince William County presents a tremendous value proposition for companies,” says Jeff Kacz-marek, executive director of the Department of Economic Development. “Our location offers companies significant cost and other competitive advantages, which allow them to compete effectively at the national and international levels.” 

The county solidified its position as a major player in the national data center market based on its robust fiber network, competitive power rates and a record-high $1 billion in capital investment spurred by the data center market. The county also has continued development of Innovation Park with the start of construction on about 9,000 square feet of wet lab space at the Prince William Science Accelerator. “Once completed, the facility will be the only public-private commercially available wet lab space in Northern Virginia,” Kaczmarek says.

 

Major employers by number of jobs

Booz Allen Hamilton
Fairfax County
7,000-10,000+ jobs

Inova Health System
Fairfax County
7,000-10,000+ jobs

Deloitte
Arlington County
5,826 jobs

Federal Home Loan Mortgage Corp.
Fairfax County
4,000-6,999 jobs

Lockheed Martin
Fairfax County
4,000-6,999 jobs

Northrop Grumman
Fairfax County
4,000-6,999

Accenture
Arlington County
4,200

AOL Inc.
Loudoun County
1,001-5,000 jobs

M.C. Dean Inc.
Loudoun County
1,001-5,000 jobs

Raytheon Technical Services
Loudoun County
1,001-5,000 jobs


Source: Northern Virginia economicdevelopment offices

 

Northern  Virginia’s recent deals
Salient Federal Solutions
Fairfax County
530 jobs

Amazon Web Services
Fairfax County
500 jobs

Cvent
Fairfax County
400 jobs

Buchanan & Edwards
Arlington County
300 jobs

Onyx Government Services Inc.
Fairfax County
274 jobs

Buller Group LLC
Fairfax County
250 jobs

Zantech IT Services
Fairfax County
249 employees

Management Systems International
Arlington County
225 jobs

Applied Predictive Technologies Inc.
Arlington County
215 jobs

FrontPoint Security Solutions
Fairfax County
179 jobs

Sources: Virginia Economic Development Partnership, Fairfax County

Staying put

The Arlington Economic Development team was thrilled last year when global energy company AES decided to keep its headquarters in the county. The company has more than 300 employees in a 100,000-square-foot space in the heart of Arlington’s Ballston area. AES, founded in Rosslyn im 1981, has been a member of the Arlington community for more than 20 years. The Fortune 200 company has offices in 20 countries and 25,000 employees worldwide.

AES felt good about the move it made from Rosslyn to Ballston in 2003. “There was more space and it was less expensive and near the Metro, but at the time it was out in the boondocks,” says company CEO Andrés Gluski.

The company likes the way the area has developed during the past few years with more restaurants and retail joining the mix. Even so, it still had to consider economics when it began thinking about its contract renewal. “All companies are under a lot of cost pressure, especially in the utility industry,” Gluski says. “We have to make sure every dollar we spend is efficient.”

It made sense for AES to look at other offers from competing localities that were offering the company a great deal of space as well as attractive rents. Because AES liked the Ballston area, the company had to see if it “could justify staying” in Ballston, Gluski says. “Our alternative was moving to the Dulles area.”

The economic development department began talking with the company about two years ago when other Northern Virginia localities began trying to lure AES away from the county. “There was a lot of pressure from neighboring communities for AES to move,” says Jennifer Ives, the county’s director of innovation and strategic partnerships.  “We worked with AES about any concerns they might have.”

Rent was a major factor and AES was hoping to negotiate a figure that would keep the company in Ballston. To help with the process, the company hired the Chicago-based real estate firm, Jones Lang LaSalle. “They did a great job of helping us look at this area and out in Dulles,” says AES’ chief information officer, Elizabeth Hackenson. “They helped us negotiate a favorable lease with the building owner, Prudential, and we signed an 11-year contract last year.”

The contract negotiation included remodeling AES’ current space. Originally, the company occupied five floors. In recent years, it built an internal stairway connecting three of the floors. The deal involves the remodeling of the company’s current space, creating a more open, collaborative workspace on the three connected floors. “We are in that stage now,” says Hackenson of the remodeling. “By the end of August we will be in our new space.”

Retaining the headquarters of the Fortune 500 company was crucial to the county. Not only is it a member of the business community, but it is also a leader in the global energy sector. “It was important for AES to continue to help anchor the innovation-economy business community within Arlington,” Ives says.

Arlington economic development officials have a longstanding relationship with executives at AES, a factor that contributed to the company’s decision to stay. “We have been actively assisting with the needs of the company,” Ives says. “We are always seeing how the community could be of support.”

Economic development staff, for example, met with company executives during lease negotiations to see how the county could help and address any potential concerns. One of the company’s requests was to add larger signage to the top of its headquarters for better visibility. “We were able to do that,” Ives says, noting there were no incentives offered to the company during negotiations.

The benefits of being based in Arlington helped make the company’s decision easier. AES’ headquarters is just a block away from  Interstate 66, offering easy access to Washington Dulles International Airport, and a block from the Metro with access to embassies and potential clients in Washington, D.C. It also is close to Ronald Reagan National Airport. “It’s about a global company looking for that connectivity,” Ives says. “They felt very comfortable in Arlington.”

The company’s location offered access as well to a young, well-educated workforce. “Live, work and play isn’t just a phrase anymore that economic development officials can use,” says Ives. “Now companies are truly looking for an area where you can live, work and enjoy yourself within the same community and have everything within a few blocks.”

At the end of the day AES wanted to be in Arlington because of its workforce, accessibility and business-friendly community. “We have been very happy with the end result,” Gluski says.

In for the long haul

Grandwatt Electric Corp. plant manager Tom Baise sees meaning in the old adage “slow boat to  China.”  That’s because it’s a long haul in getting shipments from the firm’s parent company, Superwatt Power International in China. “If a customer calls and wants to buy 10 lighting towers, for example, and we get them from our parent company, the soonest we can have them is 60 days because of the boat ride port to port,” Baise says.  

Headquartered on a 6.7-acre site in the Suffolk Industrial Park, Grandwatt Electric is new to the United States. The company was incorporated in November 2012. Baise was hired last March. “We currently have a staff of 10, and we are now hiring staff,” he says. 

Grandwatt is a build-to-order original equipment manufacturer (OEM) of lighting towers and power generators. Products range from six-kilowatt to eight-megawatt, for residential, commercial and industrial prime and standby power for generators. The Suffolk plant began assembling products last August in the company’s 30,000-square-foot facility. The company hopes to complete a $10 million expansion during the next three years and add 50 jobs. “The expansion will be based on projections,” Baise says.

So far, the company is optimistic. It had a good showing at the Power Generation Show in Orlando last year. “We did really well,” Baise says.

The new company is the result of Superwatt’s desire to open a firm in the U.S. that could compete in the North American market. “The president looked at North Carolina and Virginia, and he chose Virginia because of the location [near] the ports in Hampton Roads,” Baise says.

Another plus: The Suffolk warehouse met the company’s special needs. It was equipped with two 10-ton bridge cranes with dual five-ton hoists. “The overhead cranes travel the length of the warehouse. Each is rated at 20,000 pounds,” Baise says. “We can offload trucks, assemble the components and move the generator into the warehouse and then back into the truck.”

The company’s products are sold to local government agencies, rental companies, heavy construction companies and the mining industry. The business affords the company sales opportunities in Africa, Australia, Argentina and Brazil. The company has done particularly well in mining. “Mining is a lot of money,” Baise says. “Our products are used by all kinds of mining — gold, diamonds, silver, copper and coal.”

Grandwatt’s sales manager recently traveled to Argentina and Brazil. “That is a very up-and-coming area for possible sales,” Baise says, adding that the only drawback is that both countries often have conflicts in their governments. “You have to be careful when you deal internationally. You have to look at different credit insurances. Underwriters are looking at the [local] economy to see any fluctuations.”

The company has a strong international presence because of its parent company’s long history of global sales. Grandwatt is currently selling to more than 60 countries. Regionally it sells to the state of North Carolina and local rental companies in the Hampton Roads area. “We would like to establish something on the East Coast,” Baise says of the company’s sales. “We want to get our name out there, but it looks like it will happen internationally before it does locally.”

Products manufactured in Suffolk are of a higher quality than the products made in China. “We have to meet quality demands. People globally are looking for U.S. standards because they are better quality,” Baise says.

The company is currently working on a Foreign Trade Zone certificate and becoming acquainted with domestic EPA restrictions.  “I can’t sell certain types of diesel engines in the U.S. because of EPA regulations, but I can sell them internationally,” Baise says.

He finds the services of local economic development offices in different countries very helpful when it comes to international sales. “We establish a relationship with them,” Baise says of the offices. “They put us in touch with another company that sets up contacts so when our salesman goes there the appointments are already set up. It has a cost associated with it, but it’s well worth it. It’s better than cold knocking on someone’s door in a third-world country.”

The service comes with an interpreter who accompanies the salesperson. “That is much appreciated,” Baise says.

The company is setting up global distributorships. “One of the first things I ask is,  ‘Are you going to have the ability to provide service?’” Baise says. “We don’t want to do business with somebody who can’t back up the product with service.”

Grandwatt’s parent company has two factories in China — one in Huizhou and one in Shandong — in addition to its Shenzhen headquarters. When Baise started dealing with the factories, there were some language barriers to overcome. “It has gotten a lot better,” he says, noting that most Chinese people can read English even if they can’t speak it. “We can communicate without saying anything.”

Baise has become accustomed to the business culture in China. For example, when he presents his business card, he turns it around so it is facing the person he is handing it to. “I hold it at the ends with two hands and present it to him,” Baise says. “He will read it front to back.”

He’s also learned that he must toast each individual dignitary at the table during a business dinner. Last September when Superwatt celebrated its 20th anniversary, he headed one of the 54 tables in the hotel conference room. Each of the tables had to be toasted individually. “It’s very tasteful and very traditional,” Baise says.

The Chinese, he adds, always treat him with the “utmost respect. They won’t let me buy anything; they buy it for me. They love Americans.” 

ECONOMY IN SUFFOLK
Suffolk’s target markets include advanced warehousing, manufacturing, medical, modeling and simulation technologies, retail, hospitality, office administration and food and beverage processing. The military accounts for two of the area’s largest employers — the Navy Cyber Command and the Joint Forces J7 Staff. The city of Suffolk, Sentara Obici Hospital and QVC Distribution rank as some of the largest employers as well. Last year Planters Peanuts celebrated its 100th year in Suffolk. The city recently competed globally to keep the Lipton Tea Co. in the area after 58 years of service. The company’s plant manufactures 6 billion tea bags a year. Lipton will invest $96 million in new equipment as part of the Lipton Tea Reinvestment plan.
(See community profile on Page 69.)

ECONOMY IN HUIZHOU, CHINA
Located in the Guangdong province, Huizhou is a center for the petrochemical industry as well as information technology and exports. Large companies include electronics company TCL Corp.; Viasystems, which makes complex,  printed circuit boards; and the electronics company Desay. Huizhou has an economic and technology development zone, which includes companies involved in automobile assembly and electronics manufacturing. It also is home to an export processing zone and a high-tech industrial development zone with companies such as Sony, Coca-Cola and electronics powerhouse Siemens.

Building a cybersecurity community

Defense Point Security in Alexandria takes pride in helping defend the nation against outside threats. Instead of using guns, however, the company uses technology.

“We are part of one cybersecurity community that helps to make the government a more secure environment,” says company CEO George McKenzie.

“Everybody we hire is part of the community we have fostered. They come to work here to be part of that community.”

McKenzie founded the company in 2007 with two other owners — today he is one of five owners — after deciding cybersecurity was an industry “that needed to be run differently” than traditional IT consultant services. “We wanted to be customer focused,” he says.  

The company’s services touch on all types of cybersecurity issues, from security engineering and architecture to policy creation and incident response. It specializes in computer forensics known as “digital media analysis,” which provides timely information that can help determine whether a security incident has occurred.

Last year the company won contracts from the Centers for Medicaid & Medicare Services. “That allowed us to expand into another marketplace — health care,” McKenzie says. “This is our first large contract outside of Homeland Security, which accounts for the bulk of our work.”

Most of the company’s 52 employees and contractors weren’t affected by last year’s 16-day partial government shutdown. “We did have a select few employees working on a government contract that were impacted,” McKenzie says.

Rather than letting employees affected by the shutdown take unpaid leave, the company brought them into the office to work on continuing education.

They also were asked to help develop computer-based modules that could be used by other employees. “The people that came into the office leveraged their time to bring up the whole community,” McKenzie says. “That was a bright point for us: to keep them working and also help advance the company rather than have them just sit at home.”

Since 2012 the company has more than doubled its number of employees, thanks to a growing number of government contracts. “From the top down, every employee is a security professional,” says McKenzie.

The company’s benefits package attracts applicants. Defense Point pays 100 percent of the premium for medical insurance for the family and individuals. It also reimburses employees for home Internet and cellphone fees. “We provide every employee with a cellphone. If they have a good smartphone, we will reimburse them for theirs and pay for the phone,” McKenzie says. “Once every two years we allocate $200 so they can buy the latest smartphone out there.”

Because of the company’s strong commitment to education, employees who have received certifications are rewarded with monetary bonuses. Each quarter an employee is recognized for outstanding performance with a Shield Award.

The company has also established a fellows program for its technical leaders and subject-matter experts. The program covers different areas of cybersecurity. “It’s for the best and the brightest,” McKenzie says. “They do presentations and how-to videos that we post on YouTube.”

The fellows program is 100 percent employee-run. “To have an employee-driven, employee-run fellowship within a small company is unique in the industry,” McKenzie says.

Each quarter the company hosts a celebratory event. “We are known for our Christmas parties,” McKenzie says. “We also have had picnics, and we rent out restaurants for events.”

Almost all of the company’s employees work on government sites, not the corporate headquarters. “It’s hard to keep that community feel when most of the employees don’t report to our office every day,” McKenzie says, noting that the office has a gym as well as a large computer lab area that is open 24 hours a day, seven days a week. “They can come in to play with the technology and learn their craft anytime.”

The company also holds internal brown-bag training sessions. One of the most recent sessions focused on computer hacking. “We set up some virtual images and walked employees through computer exploitation,” McKenzie says. “A lot of people liked it because they were never exposed to that.”

The company’s culture has attracted the attention of many experienced cybersecurity professionals. “People say they want to become part of the company,” McKenzie says. “We are waiting for new business to bring them onboard. There is a demand for positions, and I am excited about that.”

Best Places to Work 2014 list of small employers

 

Big ambitions

Employees and management at Knight Point Systems LLC in Reston are focused on “10X,” an initiative that challenges the company to grow tenfold by 2022.

To achieve this goal, the company would need to have revenues of $400 million and 1,000 employees by the end of 2022. And it’s well on its way, surpassing $40 million in revenues at the end of 2012.

“We almost doubled our revenue in 2012” and repeated that feat again last year,  says Richard Cable, the company’s human resources manager. The company’s workforce also nearly doubled in 2013.

Knight Point was No. 1 among small businesses (with fewer than 100 employees) on the Best Places to Work in Virginia for two years. Now with 140 workers, it is the top company in the midsize class.

The company’s 10X focus emphasizes not only exceeding customer expectations but also promoting personal growth for employees. “Attaining the 10X goal is obviously beneficial for the company, but employees can realize rewards such as job security, management opportunities, more training and the opportunity to contribute,” Cable says.

New employees are outfitted with the 10X logo before their first day at work. “We send a welcome package to new hires with polo shirts, a hardcover notebook, luggage tags and lanyards with the logo. It shows up before their first day,” Cable says.

The company also sends flowers or some type of gift to the homes of new employees on their first day of work. “We set the tone from day one to let them know we care about them and want them to be happy,” Cable says. “We want to help them grow in their career.”

Last year the company was No. 1,507 on the 2013 Inc. 5,000 list of fastest- growing private companies in the U.S. Cable credits that aggressive growth to the high caliber of people the company hires.

Even though the company has seen substantial growth, it continues to maintain a small-company, family feel. “We have increased our management staff so employees know there is always someone they can go to,” Cable says, noting the company’s open-door policy.

The company hopes to be up to 180 employees by this spring. Most of its employees are located in Virginia, Maryland and Washington, D.C. “We have a strong reputation in the D.C. area,” Cable says.

The company also has an operations office in West Virginia and other offices in Stennis, Miss.; Ogden, Utah; Philadelphia and Oklahoma City.

The company’s offerings range from cloud services to cybersecurity. “We are trying to be a leader in the cybersecurity industry,” Cable says. “That is still big for us.”

Last year, the company won a large government contract and other contract wins that will add more than 80 people to the roster. “We won 10 contracts in 2013, and five of those are very significant,” Cable says.

One of the company’s goals is to recruit more women to the IT industry. “The IT industry, until recently, has been a male-dominated industry,” Cable says. “When I get applications in the office, the majority are from men.”

The company has begun community outreach efforts to make women aware of industry opportunities. “We want to open the door for more women,” Cable says. “This January we started a women’s mentoring program. Our female employees who have been in the industry mentor other female employees to help them grow in the IT field.” 

Efforts also are underway to recruit more minorities for IT positions. The company recently implemented a new career page on its website with an applicant tracking area. “We are trying to do more for minority groups, which are being underutilized in the industry,” Cable says. “We can track the applicants we are getting so we know where we need to reach out to different organizations in order to give minorities opportunities to get into the industry.”

The company is continuing the Emerging Leaders Program it began in 2011. The program, conducted by the company’s executive management team, helps employees learn more about leadership. “We are currently in the selection process for the next class,” Cable says.

Philanthropy is another facet of the company’s culture. President and CEO Bob Eisiminger, a disabled veteran and West Point graduate, serves on the board for the Wounded Warrior Amputee Softball Team. Last year the company purchased $1,000 worth of tickets to a softball game hosted by several players from the NFL.

The company also supports Hero Dogs, a program that trains and places service dogs with injured or disabled veterans. “We are now supporting our second dog, Jack. There is no charge to the veteran for using the animals,” says Cable, noting that “giving back to the troops” is highly important to the company.

Best Places to Work 2014 list of midsize employers

 

Yappy hour

Imagine the look on the faces of hotel guests when they saw penguins — the birds, not the hockey team — waddling around a New York Kimpton hotel. The penguins were traveling with Columbus Zoo staff who were appearing on one of the New York-based late-night television shows. Their presence in the hotel represents a growing trend: pet-friendly hotels.

According to the 2012 U.S. Pet Ownership & Demographics Sourcebook from the American Veterinary Medical Foundation, there are more than 155 million households in the U.S. with pets.  When pet owners travel, many can’t imagine leaving their pets at home. In fact, they are so passionate about their animals that nearly one-third of pet owners polled in a recent survey commissioned by AAA and Best Western International said they would rather travel with their pet than with their significant other.

The Kimpton chain recognized this trend back in 1981 when the company was founded. Since then it has welcomed any pet guest — not just dogs and cats — regardless of size, weight or breed. Kimpton doesn’t have an additional charge for a pet but most hotels do charge a fee.

When it comes to pet amenities, each Kimpton hotel supplies water bowls, treats, beds, toys and pooper-scooper bags. Kimpton’s Hotel Monaco in Alexandria offers a doggie yappy hour, a pet-friendly take on its complimentary wine hour. The Hotel Monaco in Seattle takes it a step further with a “bake-a-bone” station where guests can make homemade treats for their pets. Many of the chain’s hotels also have canine concierges with the title of director of pet relations. On average about 10 to 15 percent of Kimpton’s guests bring pets..

Sheila Johnson, founder of the new Salamander Resort & Spa in Middleburg, made the resort both dog and horse friendly. Dogs stay with their owners in terrace-level rooms that open to the grand lawn while horses are boarded in one of three wings in the stables on the property. “Sheila is a great lover of dogs and horses,” says Matt Owen, the resort’s corporate director of public relations. “We recognized that our target demographic likes to travel with their pets. A lot of people that travel with horses also travel with dogs.”

Traveling with pets is a continuously growing trend, especially in our area of Virginia, Owen adds. “Horses and hounds are synonymous with each other. And in Middleburg, being dog friendly is par for the course.”

Anyone who brings a dog on property has to sign an agreement that the dog is up-to-date on its shots, and the dog must not be left unattended in a guest room. Horse owners also must provide proof that their horse is current on shots.

“We will look after your horse, turn it out and feed it as you would normally do,” says Owen, noting that the fee for that service is $75 a night. There also is a $90 non-refundable dog fee per stay, and there is a maximum of two dogs per room.

At Salamander, in-room amenities for dogs include a bed, food and water bowls, organic treats, waste bags and a special toy. During warmer months, the resort hosts yappy hour once a week, which is open to both hotel guests and the Middleburg community. “We set up a bar and buckets of water,” Owen says. “It’s very popular for guests to bring their dogs. Normally we are never without a dog on the property.”

Guests bringing their pets represent less than 50 percent of Salamander’s business, but as guests learn that the resort is pet friendly that number could change. “Weekend, leisure travelers are certainly more likely to bring their pets than the midweek business meeting attendee,” Owen says. The resort opened in August.

Dogs are the only pets permitted at Lansdowne Resort in Leesburg. Guests can have two dogs in a room. There is a weight limit of 75 pounds for one dog and 50 pounds per dog for two. The resort has specific rooms on the second floor designated for guests with dogs, and there is a one-time $100 cleaning fee.

Amenities feature a hotel logo dog bowl for use at the resort, complimentary treats and in-room dining from the aptly named canine kitchen. Gourmet dog entrees include peanut butter doggie bones, Virginia apple pup cakes, Lansdowne ruffey risotto and meatloaf a la Fido.

This past holiday season the resort offered a “howl for the holidays” package that allowed dogs to stay free with a guest, waiving the $100 non-refundable fee.
Guests at the Tides Inn in Irvington have been bringing their pets to the resort since 1970. One of the largest pets to visit is a 180-pound Saint Bernard. “I have allowed her here several times,” says General Manager Gordon Slatford. The inn’s most unusual pet, he adds, was a Conure parrot. No reptiles are allowed.

One of the inn’s most frequent guests is George, an English bulldog. When his owner asked Slatford if George would be welcomed, he gave the following reply:

“George will be most welcome to stay at the Tides Inn if he promises to brush his teeth, comb his hair and behave as a true English gentleman. We have a pet agreement, which in essence underwrites his behavior and clarifies that if George decides to eat the furniture rather than his dinner you will cover the cost. We charge a nominal daily pet fee [$35] for accompanying pets as we have found that some animals get neurotic if they believe they are being given charity.”