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byline: Stephenie Overman

Fredericksburg foresees many uses for baseball stadium

The Potomac Nationals plan to head to Fredericksburg, a move that backers expect will bring more than minor-league baseball to the city.

A key component of the plan for a 5,000-seat, $35 million baseball stadium in Fredericksburg is its intended multipurpose use, says Bill Freehling, the city’s director of economic development and tourism.

“It will bring in sports competition; it will bring in groups. It will be a good venue for concerts and holiday and light shows and community events,” Freehling says. “It will be important for the quality of life of our residents and also give people another reason to visit Fredericksburg.”

The Fredericksburg City Council voted 7-0 in July to approve a preliminary agreement with the Potomac Nationals, a Class A affiliate of the Washington Nationals, to relocate the team.

A letter of intent between the city and the club set in motion a four-month study period with the target date for opening the Fredericksburg stadium set for spring 2020. The P-Nats have played in Pfitzner Stadium in Woodbridge since 1984.

The new stadium would be privately financed, maintained and operated by the baseball club, but the city would pay $1.05 million annually to the club for 30 years, the minimum amount of time that the club would be required to remain in Fredericksburg. The city’s payment would come from revenue generated by the stadium.

Matt Kelly, an at-large member of the Fredericksburg City Council, says the city has worked carefully with financial advisers. “One of the biggest factors is that this is not standard stadium financing,” he says. “We’re using revenue to pay our portion; we’re not looking to other sources of revenue to pay for it. We’re comfortable with the numbers.”

He adds, “This is our second time through for baseball.” Five years ago the city held talks with another Washington Nationals farm team, the Hagerstown Suns, but the Suns stayed in Maryland.

Freehling and Kelly tout the Fredericksburg location, about halfway between Washington, D.C., and Richmond, just off Interstate 95.

“We would get more exposure in the D.C. market, which is a target market for us,” Kelly says.

Freehling notes that the stadium location, known as Celebrate Virginia South, already has an expo center and three hotels.

Does the move mean a name change for the team? “Nationals is a strong brand, but we have had conversations about having a contest to name the team,” Freehling says.

The evolution of ATMs

The use of automated teller machines is declining because of the popularity of new types of financial technology, but Virginia community bankers say that doesn’t mean ATMs have outlived their usefulness.

Alternative payment methods such as PayPal, Venmo, PopMoney and Zelle give consumers more choices at a time when the number of ATM withdrawals is falling.

Transaction Network Services released a survey in September showing that American bank customers are using ATMs less frequently. The survey found 29 percent of respondents said that they never use ATMs, up from 21 percent in 2015.

The survey also asked respondents how often they typically visited an ATM. In the 2017 survey “once a month” was the top answer for U.S. respondents. Two years before, the top answer was  “once a week.”

Virginia community bankers say they are adapting to customers’ changing habits in their use of ATMs and other services.

Bill Ridenour, senior executive vice president and chief banking officer of John Marshall Bank in Reston, says it went through an operating system conversion a couple of years ago “to be able to offer more capabilities for more mobile banking.”

New features
While ATMs used only as a cash dispenser are going “by the wayside,” smarter machines are taking their place, says Steve C. Yeakel, president and CEO of the Virginia Association of Community Banks (VACB). “The ATM is in evolution. Manufacturers are adding features,” he says.

For example, interactive teller machines (ITMs) look like ATMs but offer videoconferencing. They allow customers to talk with bank employees about their accounts, just as they would in a teller line.

A recent survey conducted by Fiserv Inc., a financial services technology provider, shows customers have an appetite for other ATM features.

For example, nearly two in five consumers (37 percent) in the survey liked cardless cash access, in which smartphones instead of bank cards are used to withdraw money from ATMs. More than half of the millennials responding also favored cardless access, which is being offered by an increasing number of banks throughout the country.

Only 7 percent of respondents in the Fiserv survey, however, said they already use the service, while 22 percent said they would only use it in an emergency; 16 percent said they felt it would keep others from accessing their PIN; and 6 percent said they would use it to avoid carrying their debit cards.

Some consumers continue using cash for the sake of privacy. John Fruit, senior vice president for card services and e-channel support for TowneBank in Suffolk, notes that, “as we continue to see privacy concerns in the news — think Facebook — we should expect there to be a segment of the population that will want to use cash in an effort to keep their transaction history private.”

Branch alternatives
As some banks close branch offices to reduce costs, ATMs can offer a way for them to maintain a presence in various locations.

“If you’re looking to brand yourself, the way a branch raises a flag, an ATM does that to some extent,” Yeakel says.

While there may be a decline in the number of ATMs, “I do not think we should expect it to be at the same rate as branch closures,” Fruit says, because financial institutions can move the “cost-cutting” needle more by closing a branch than by closing an ATM.

“Replacing branches with full-function ATMs and placing ATMs in locations where they might have a particularly high density of cardholders …  is certainly a way to keep expenses low while at the same time offering some flexibility to the customer base,” he says. “The idea of the ATM as a brand extension is really on a case-by-case basis.” 

Young customers
The suspected role of younger customers in the declining use of ATMs is exaggerated, say community bankers.

“Clearly, younger customers have grown up using smartphone technology, and they’re not going to want any bank that does not have that technology,” Ridenour says. “But the [generational] divide is a little overblown.”

A 2016 BI Intelligence survey found that 44 percent of millennials were unwilling to stop using cash, even if electronic payments could replace all cash transactions.
In fact, says Yeakel, the biggest group to move away from cash is the 35-to-54 age bracket. “Younger middle-age folks are more tech savvy and have more to gain from efficiencies,” he says. Customers younger than that “are more interested in managing their budgets in a simple way” and “many

use cash as a budgetary method.”

The big trend among younger customers is peer-to-peer payments, says Brian K. Plum, president and CEO of Blue Ridge Bank in Luray who is chair-elect of the VACB.

“People can send money to other people without having to go through a true financial institution. That’s probably one of the biggest generational differences,” he says. “People are keeping money in non-bank arenas that are not FDIC insured. If something happens, it’s questionable whether you get your money. There’s more risk. Do they know the risks? I don’t know.”

Promotional opportunities?
Do fewer ATMs hurt a bank’s ability to promote itself?

Ridenour says John Marshall Bank has never really relied on ATMs to promote its services. “We don’t feel it’s effective to have customers having to look at bank messages before they can get their cash. We communicate with our customers through email, bank statements and face to face.”

Customers aren’t looking for commercials, Fruit agrees. “It is hard to imagine people getting excited while reading about a new CD promotion, a [home equity line of credit] rate or any other promotion a bank or credit union may want to offer.” 

Customers today see ATMs as “an appliance,” he says. “People want to get to the ATM, complete a transaction and get on with living. They want the transaction to be as fast and painless as possible.”

Critics see snarls in new Loudoun development plan

Critics of the new draft of Loudoun County’s comprehensive plan question a proposed increase in residential development, arguing it will intensify congestion.

“Loudoun 2040 Comprehensive Plan,” written by the Envision Loudoun Stakeholders Committee, is meant to serve as the county’s guide for land use and transportation policy.

A draft of the plan was posted on the Envision Loudoun website (www.envision-loudoun.org) in May, and the county held a series of meetings to give the public the opportunity to comment. The Board of Supervisors expects to vote on the plan early next year.

The plan establishes “urban policy areas” around Silver Line Metro stations and along state Route 7. It emphasizes “appropriate density and walkable or transit-oriented mixed-use development in these areas.”

As work on the new Metro corridor continues, discussion about urban development there is timely, says Gem Bingol, a field officer for the Piedmont Environmental Council.

“We need that kind of density. We have a huge investment in transit. We need to manage how growth happens over time or the county could easily not get what it’s looking for,” Bingol says.

Nonetheless, plans for urban development along Route 7 are “premature,” she says. “We don’t have a plan to make that an urban area.

We don’t have the transportation. Let’s make sure we have a good handle on the urban area we have been planning before we start thinking about that.

“Loudoun has a lot of history of too much development at once, and we’ve paid the price,” Bingol adds. “The county has managed to keep its high triple-A [bond] rating, but the residents have felt the impact.”

The new comprehensive plan also has met resistance from the Transition Area Alliance, an organization that aims to preserve open space as a buffer between the high-density suburban areas in the eastern and northern parts of the county and rural areas in the west.

The draft plan calls for “up to 1,500 newly planned residential units in the transition area over the next 20 years.”

That’s still too much growth, according to a statement on the alliance’s website, “As a county, we have not matched our infrastructure to the pace of new residential building.”

Alexandria prepares to cope with Metro disruption

Alexandria officials are looking at a range of options — from more water taxis to increased co-working spaces — to ease the disruption next summer when city Metro stations will be shut down for platform repairs. 

The Washington Metropolitan Area Transit Authority (WMATA) announced in May that it plans to close all Alexandria-area Metro stations at the beginning of a project that is expected to last several years.

The Braddock Road, King Street, Eisenhower Avenue and Van Dorn Street stations are expected to be closed from Memorial Day through Labor Day in 2019.

“While this absolutely will have an impact, we have a lot of transit options,” says Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership (AEDP). “We could have water taxis more frequently. The Virginia Railway Express goes through Alexandria —  is there a way we can add capacity or frequency?”

Patricia Washington, the president and CEO of Visit Alexandria, says in a statement that problems caused by the shutdown can be mitigated “by the additional bus service planned and by our many other transportation options connecting us to the region, including water taxi, rideshare, bikeshare and taxi service.”

The growth of shared workspaces has been one of the biggest changes to the city’s real estate market in the last three years, Landrum notes, and “one strategy could be during those three months to have people work out of co-working spaces, so they can be productive but not have to struggle” with a disrupted commute.

She says that option could be especially useful for the large number of federal employees who live
in Alexandria and work in other areas.

“The blessing of the announcement is we have more than a year to prepare for it. We can get all ideas out on the table,” Landrum says. “While this is not ideal, the end result is a safer, more reliable Metro system. Metro is going to be rolling this out throughout the system for the next five years. We’re first in line. We’re taking our pain early.”

A task force will begin meeting this summer, she says. “We’re having conversations on a citywide basis to make sure we reach as many of the business communities as possible. We’re also having larger public meetings.”

And, Landrum says, AEDP plans to look at other cities that have faced extensive transportation interruptions. “What has New York done? What has Boston done? They’ve had to deal with it. We’re looking for best practices.”

Forest City carves out new space at Ballston Quarter

Ballston Quarter, an 850,000-square-foot redevelopment project in Arlington, won’t be a traditional shopping mall, says Will Voegele.

He is senior vice president of development at Forest City, a Cleveland-based developer that is tearing out walls while adding gathering places and restaurant patios at the former Ballston Common Mall.

The redevelopment, which will cost $330 million, includes 360,000 square feet of retail space, 176,000 square feet of office space, a 25,000-square-foot food hall and a new 406-unit residential building.

New tenants, including several making their first appearance in Arlington, are expected to open their doors in mid-September  while leasing for the apartments will begin in the first quarter of next year.

As part of the new look, the retail space includes tenants that offer experiences instead of merchandise.  Forest City refers to them as “experiential and entertainment tenants.”

“Ballston Quarter will become an entertainment focal point, not just for the Ballston neighborhood, but it will also be a one-of-a-kind attraction in the region,” says Emily Cassell, director of Arlington Convention and Visitors Service. “Its unique experiential offerings, like the cooking school, escape room, bowling alley and food hall with local culinary concepts, will make it a destination for locals and visitors alike.”

The cooking school is Cookology. Its 5,700-square-foot space will include five kitchens offering gnocchi workshops, family sushi classes and a course called “Duck 101.” The Ballston Quarter site is Cookology’s second. The first is in Sterling.

The escape room is 5 Wits, an entertainment venue offering a movie-like scenario in which participants must solve a problem in a limited amount of time. The company has locations in Massachusetts, New York and Pennsylvania. This will be the first Virginia location.

The bowling alley is Punch Bowl Social, which also will have a restaurant, bar and an arcade. This will be the national chain’s first location in Virginia.

The Quarter Market Food Hall will include 18 dining choices and an outdoor plaza.

In addition to its new tenants, Ballston Quarter is home to a Regal Cinemas movie theater and Sport&Health fitness center, which have been undergoing multimillion-dollar renovations.

Voegele says Forest City is collaborating with Arlington County to make upgrades to the Ballston public parking garage, including a smart parking system.

Valedictorian of the creative class?

Richard Florida, a best-selling author and urban-studies scholar, teaches in Toronto, one of 20 contenders for Amazon’s $5 billion second headquarters.

But since the competition for Amazon HQ2 began last fall, “I’ve predicted that the D.C. area would be the winner,” says Florida, a former professor at George Mason University. “The reason is that the metro area has one of the highest concentrations of knowledge workers, educated workers, creative workers on the planet. I don’t know if it’s going to go to Northern Virginia, Maryland or D.C. but I clearly think it’s going to head in your direction.”

Florida is widely known for his ideas about the “creative class.” Under that concept, metro areas need to attract large numbers of highly skilled and talented workers to stimulate economic development.

The second Amazon headquarters is expected to create 50,000 jobs during the next 15 to 17 years. Stephen Moret, president and CEO of the Virginia Economic Development Partnership, describes the project as the “economic prize of the century.” The Washington, D.C., metro area is the only one to have three contenders still in the running for HQ2: the District of Columbia, Northern Virginia and Montgomery County, Md. The Washington Post reported that Amazon officials toured the Washington area in early March.

Jim Corcoran, president and CEO of the Northern Virginia Chamber of Commerce, believes Northern Virginia’s workforce talent is crucial to its efforts to beat out the 19 other contenders. “Our area has the most educated workforce in the United States,” he says.

Corcoran praises what is “maybe the greatest community college system in the United States,” adding that Northern Virginia Community College and George Mason University have strong cybersecurity programs.

According to The Washington Post, Amazon is considering these Northern Virginia locations for its headquarters:

  • Property on Fairfax/Loudoun county line (now occupied by the Center for Innovative Technology) near Washington Dulles International Airport;
  • The Crystal City/Potomac Yard area; and
  • Potomac Shores and Innovation Park in Prince William County.

Virginia has not released information about any possible incentives being offered to Amazon. District of Columbia officials have said they are willing to offer significant tax breaks but have not released any details. Maryland, on the other hand, is promising a $5 billion incentive package in its bid.
   
The Achilles’ heel
The contrasting approaches of the three Washington-area contenders point to what Florida sees as their Achilles’ heel, a lack of collaboration. “That does not exist, which is reflected in the fact that there are three bids,” Florida says. “The region has to grow up and figure out how to work together.”

That lack of cooperation has contributed to the region’s “gridlock nightmare,” Florida says. “If you have to get anywhere in a car, a metro area starts to break down when you have 5 or 6 million people. You’ve got to grow differently and add density, like London or New York. This is not a place that is going to grow any more based on cars.”

Corcoran, however, argues that Northern Virginia “has great transportation, but not perfect transportation … That’s the result of the dynamic economy because people want to be there and are going places. Traffic is an indication of prosperity.”

Virginia has made significant investments in transportation in Northern Virginia in the past decade and continues to invest, he says, with new HOT lanes and improvements to Interstates 66 and 95 and Routes 7 and 28. “Everything that can be fixed is being fixed or improved.”

The new Silver Line extension of the Metrorail transit system and more regional buses also are signs of the region’s commitment to untangling the area’s transportation system, Corcoran says. “This area doesn’t have to say we will invest in mass transportation for Amazon; we’ve done it.”

But delays, safety concerns and a drop in ridership continue to plague the subway system. The Washington Metropolitan Area Transit Authority says it needs an annual $500 million infusion of capital funding from Virginia, Maryland and the District.  In March, the Virginia General Assembly approved $154 million in new permanent funding for Metro, By late March, Maryland and the District had approved similar funding,

Stewart Schwartz, executive director of the Coalition for Smarter Growth, says three jurisdictions have shown a commitment to making  improvements.

“We are seeing positive movement. We are finding new dedicated funding,” Schwartz says. “They have been talking to each other. Yes, indeed, they are working closely together. I think that has been noted by Amazon” and by other corporations that have chosen to move into the area, such as Nestlé, which recently moved its U.S. headquarters to Rosslyn.

The subway system also remains a key part of the region’s commitment to be bike and pedestrian friendly, Schwartz says, an initiative that makes it attractive to a millennial workforce.

Room to build
Northern Virginia still offers plenty of room to build, for office space and housing, says CoStar Group market analyst Omeed Naderi. He points to Tysons and Reston as two of the most active housing development areas.

Julian Spiker, also a market analyst at CoStar, says there’s also room for Amazon in the Crystal City area. “Crystal City has a lot of older office space. JBG Smith owns a lot of space and has already committed to revitalization whether or not Amazon moves there. It’s a good opportunity. One has what the other needs.”

Plus, the area will have a new Metro stop at Potomac Yard, which is expected to open in 2021.

The extension of the Silver Line Metro along the Dulles corridor, with stations from Reston Town Center to Ashburn expected to open in 2020, is perfectly timed, says Dee Owens, an associate broker with RE/MAX Gateway in Virginia. “Amazon can pull talent from farther out.” 

Owens worked in real estate in Seattle during the Amazon boom and calls the experience “wonderful preparation for what I hope is going to come to us.”

One lesson she learned is that Northern Virginia will need investors in rental properties. Some of those 50,000 jobs Amazon is promising will be high paying, Owens says, “but a lot will be jobs for people right out of college, and they’ll want to rent at first.”

Seattle built a satellite campus, she notes, which could be good news for Prince William County. “A satellite would make good business sense. You could pull in people from Gainesville and Haymarket. People will travel up to an hour to a job. If you pay enough they will go.”

If not NoVa?
If Amazon picks Maryland or the District for its headquarters, Northern Virginia still will reap plenty of rewards, Florida says, because “a ton of residents will choose to live in Northern Virginia. There will be benefits without some of the cost. If I were Northern Virginia, I’d be hoping for one of the others and get the spillover benefits.”

Corcoran agrees that Northern Virginia will benefit if one of its neighbors is the winner.

In fact, he sees great possibilities if any one of the three areas takes the prize. Those possibilities include extending the Purple Line light rail from Maryland into Virginia or adding another bridge across the Potomac River.

“That could be the impetus to improved transportation cooperation. Right now, that stops at the river,” he says. “Maybe it would force a conversation and evaluation to improve regional mobility.” 

Developer digs through history in creating mixed-use project

Maryland developer EYA LLC is turning an Old Town Alexandria waterfront site into a mixed-use project.

But first, says EYA Senior Vice President A.J. Jackson, archaeologists have been uncovering layers of Virginia history dating back to 1749.

The Robinson Landing plan will include 26 town houses, 70 condominiums, retail space, a renovated pier, floating docks and a promenade along the Potomac River.

Archaeologists from Thunderbird, a division of Wetland Studies and Solutions Inc., are working with EYA and the city in exploring the site’s past.

The waterfront spot, for example, was once the location of Pioneer Mills. Built in 1854, the building was six stories tall, made of brick, stone and slate. It dominated the Alexandria waterfront for more than 50 years until it was destroyed by fire in 1897, according to Alexandria city records. The site was later a bakery and eventually the Robinson Terminal South warehouse, Jackson says.

“Layers and layers of archaeology have been explored,” he says. “There’s early 20th century on top of mid 19th century, 18th century, a lot of building foundations. The artifacts point to the history of Alexandria. There’s petrified hardtack bread, Spanish coins or beads, seeds from South America or Africa, pottery and cookware fragments.

“We’ve recovered a lot of stone that we are going to be able to use on site. We’re giving some to the city for waterfront parks for redevelopment,” Jackson says. “We’re bringing that history back to life.”

All the buildings on the site have been demolished, except for one structure that’s going to be reused, he says. Construction is scheduled to begin this year.

Sales on condos and town houses opened in November, and 16 units sold in a month.  The first residents of Robinson Landing will move in this summer, he says, while a second group is expected to move in about a year later. The final condo building is expected to open at the beginning of 2020.

The existing pier will be converted into public space with seating, day slips for boats and an outdoor lounge, along with landscaped park areas.

Seeking diversity

Federal government jobs remain a pillar of Northern Virginia’s economy, especially in the areas closest to Washington, D.C.

But last year Northern Virginia found a number of ways to diversify, expanding in cybersecurity, health care, pharmaceuticals, biotechnology, aviation, drones, retail and beer.

Here’s a roundup of activity in five localities.

Fairfax County
Fairfax County, Virginia’s most populous county, last year saw growth “across the board — federal, private, service, IT, growth from within, growth from without,” according to Gerald L. Gordon, president and CEO of the county’s economic development authority.

“All of those things are important because they take us further from relying on federal contracting and its rise and fall,” Gordon says.

Last year certainly had its ups: The Transportation Security Administration (TSA), an agency of the U.S. Department of Homeland Security, finally moved its headquarters to Springfield after a long court battle. The move brought 3,000 jobs to the county.

And, in its first year, the Trump administration has shown support for budget increases for Homeland Security, the Department of Defense and Department of Veterans Affairs, all agencies that represent a high percentage of the federal jobs in the county.

“The areas where the administration wants reductions, such as EPA [Environmental Protection Agency], represent only 11 percent,” Gordon says. “I think we’ll do very well. We want to diversify but not forget that this is the cornerstone of our market.”

Amazon Web Services, the cloud subsidiary of Amazon that already had a large presence in the area, announced plans last summer to open a new East Coast corporate campus in Herndon, adding up to 1,500 jobs (see related story on Page 26).

Favor TechConsulting brought its headquarters — and about 1,200 jobs — to Tysons, while Mission Services Inc. added about 400 jobs to the area. Iomaxis announced plans last year to invest a total of $3.8 million to expand its operation in the county and is expected to add about 560 jobs. In November SAP National Security Services Inc. announced plans to add 95 jobs and invest $6 million to expand its IT and cybersecurity operations in the county.

Inova Health System, a nonprofit health organization based in Falls Church, is developing a cancer center and a research hub that  “continues to grow by leaps and bounds. There’s interest from around the world. There are opportunities for university students to study and be a part of it,”  Gordon says. “We think that it will really explode this next year.”

Granules Pharmaceuticals Inc., an India-based company that develops generic products, brought 100 jobs to Chantilly, adding more diversification to the Fairfax market.
Continued diversification is the key goal for this year, Gordon says. “We’re seeing more entrepreneurial businesses growing than ever before. It’s more than a trend, it’s an inevitability.”

Prince William County
Data centers and distribution centers remained the hottest sectors in Prince William County, but the single biggest new job source last year was a giant hunting and recreation gear store.

Cabela’s, which opened its 79,999-square-foot store in March, added nearly 200 jobs to the Gainesville area, says Jeff Kaczmarek, executive director of Prince William County’s department of economic development.

But more than that, he says, “Cabela’s is a hub of activity that draws people from all over the mid-Atlantic to Virginia Gateway Center.”

Overall, Prince William last year handled deals worth $850 million that are expected to create a total of 950 jobs, according to the economic development department. The county passed 3.5 million square feet of data center space this summer.

Last year Iron Mountain opened its first data center in the Manassas area, employing about 50 people, and now is making plans for a second building.

These developments haven’t been the county’s only source of growth. Prince William is home to one of the fastest-growing biotechnology clusters in the area, with a science incubator associated with the George Mason University Science and Technology Campus in Manassas.

Last year, Ceres Nanosciences “graduated” from the incubator, moving into 9,100 square feet of renovated commercial wet lab and office space. Ceres produces “nanotrap” technology that deals with applications in  assessing infectious diseases.

Prince William’s portfolio currently “is nicely balanced,” Kaczmarek says. The economic development office is conducting a target industry study this year to ensure that the county remains positioned for continued growth.
 
Loudoun County
Loudoun had “another huge year” in 2017, boasts Buddy Rizer, executive director of the county’s department of economic development. “We could not be in a better place as a community than we are right now.”

That’s because not only did the county see more than $3 billion in commercial investment last year, it took steps to add more variety to its economy, Rizer says. “Data centers are leading the way, but small and midsize companies in health, aviation, etc., are coming in. We’re starting to build a diverse economy.”

Some of the county’s top wins for 2017 include: CIS Secure Computing Investment: $12.4 million investment, 65,300 square feet, 180 jobs; DRS Global Investment: $3 million investment, 40,000 square feet, 180 jobs; and EIT Investment: $37.5 million investment, 75,000 square feet, 145 jobs.

The eastern part of Loudoun County has responded to market demand with mixed-use development around “the Metro stops that are incredibly important to the future,” Rizer says. “That’s what businesses are telling us they’re looking for — offices in a walkable environment.” Phase 2 of the Dulles Corridor Metrorail Project is expected to be completed in 2020.

Arlington
Two research-related companies decided last year to call Arlington home.

The American Institutes for Research (AIR), a behavioral- and social-science research organization, announced plans in November to invest $12.5 million to relocate operations from Washington, D.C., to Arlington’s Crystal City area. The move will bring 320 jobs.

“They work with a lot of nonprofit groups and nongovernmental agencies. It’s a great location for them,” says Victor L. Hoskins, Arlington economic development director.

And Gartner Group, a Connecticut-based information technology research firm purchased CEB Inc., the research and business advisory firm formerly known as Corporate Executive Board. CEB had about 1,300 employees at its headquarters directly across from the Rosslyn Metro station.

Nestlé USA, a subsidiary of Nestlé S.A., announced in early February 2017 its decision to move its corporate headquarters from California to Arlington. At the time, the company said it planned to lease space in a 35-story building in Rosslyn.

From an initial commitment for 206,000 square feet, Nestlé has added 50,000 square feet, or two floors worth, for more conference rooms and amenities, including test kitchens, Hoskins says.

By the end of 2017 about 230 employees and contractors were working from the company’s temporary office at 1101 Wilson Blvd. Nestlé estimates it will bring about 750 jobs to the area. Hoskins says about 60 percent of the jobs are expected to be filled by people from the region and about 40 percent will transfer from California.

Northern Virginia also is becoming an attractive location for all types of  cyber services companies, according to Hoskins, noting that Accenture is building a cybersecurity innovation center in Rosslyn. “There are lots of new products and new services that are bubbling up.”

To encourage that process, Arlington introduced a new tool in 2017 — the Gazelle Grant, a program that offers $10,000 to $150,000 to fast-growing,  “gazelle” technology companies with proven financial success.

Alexandria
The National Science Foundation, with an estimated workforce of 2,100, made its move into Alexandria in August, setting up shop in a new 700,000-square-foot office building located at the Eisenhower Avenue Metro station.

Plans for the move of the independent federal agency, first announced in 2013, created a ripple effect over recent years in development of apartment, hotel, retail and office space, Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership, said in a statement.

And last year Asana Partners acquired two major portfolios. The real estate investment company now owns dozens of buildings along the King Street corridor in Old Town. The city’s waterfront development plan moved closer to completion with the opening of the boutique Hotel Indigo and the new Old Dominion Boat Club.

Alexandria is fighting the decline of brick-and-mortar retail stores with a pop-up program called Pop-up ALX. The economic development partnership opened 116 King Holiday Pop-up in November 2016, then reopened it for the spring and summer of 2017 as 116 King Seasonal Pop-Up.

“For the holidays in 2017, 116 King returned, and we facilitated two other pop-ups — Gallery 104 featuring art from a local artist and architect, and an Ugly Christmas Sweater store — so we had three stores open in November and December,” says Landrum.

This year will see the continued build-out of Potomac Yard, with new office headquarters for the National Industries for the Blind and the American Physical Therapy Association taking shape, along with a new Choice Hotels’ property and Kaiser Permanente offices and facilities, according to Landrum.  

Northern Virginia’s recent deals

Company Location #Jobs
Transportation Security Administration Springfield 3,000
National Science Foundation Alexandria 2,100
Amazon Web Services Fairfax County 1,500
Favor TechConsulting LLC Fairfax County 1,200
Nestle USA Inc. Arlington County 748
Iomaxis Fairfax County 560
Mission Services Inc. Fairfax County 400
American Institutes for Research Arlington County 320
Cabela's Prince William County 200
Alorica Spotsylvania County 200
Source: Virginia Economic Development Partnership, local economic development offices, 2017

The Amazon deal – no, not that one

“Amazon” has been the word on the lips of business leaders lately in Northern Virginia. And it’s not just because the region is among the finalists looking to snare the company’s planned second headquarters.

Months before Northern Virginia was announced as a top 20 contender for Amazon’s “HQ2,” the state had sealed a deal with Amazon Web Services Inc., an Amazon.com company, to locate its new East Coast corporate campus in the Herndon area.

“Historically Virginia has had a great corporate relationship with Amazon; Amazon has a large presence already” in the state, says Suzanne Clark, communications director for the Virginia Economic Development Partnership.

“When we were made aware of the potential of this project” — a potential to create up to 1,500 new jobs — “that existing corporate partnership and history was helpful.”

Clark says then-Gov. Terry McAuliffe met personally with Amazon representatives and that the VEDP worked with the General Assembly’s Major Employment and Investment (MEI) Commission to craft the deal that was announced June 8. Commonwealth officials announced that Virginia beat out Texas and Washington state for the project.

The custom performance state grant approved by the governor and the MEI Commission states that after the hiring of 600 new employees, AWS will be eligible to receive $7,000 per net new job created, up to 1,500 total jobs.
Amazon Web Services is a secure cloud services platform that offers compute power, database storage and content delivery. According to the company, positions at the Herndon corporate campus will be mainly technical roles in the cloud computing business.

The public may know more about Amazon’s e-commerce business, but investors love AWS, according to The Motley Fool. The financial services company reports that although the division represented only about 11 percent of total revenue in the nine-month period that ended Sept. 30, “this higher-margin business produced nearly $3 billion in operating income, while the North American retailing segment brought in only $1.1 billion in operating income in the period.”

The location chosen by AWS is One Dulles Tower, a 400,000-square-foot Class A office building at 13200 Woodland Park Drive on the Dulles Toll Road. Federal Capital Partners acquired the building from Corporate Office Properties Trust in October 2015 for a reported $84 million. One Dulles Tower had been leased to Booz Allen Hamilton, which vacated the building at the end of 2015.

The site is about two miles east of Washington Dulles International Airport and about one half-mile from both the future Herndon and Innovation Center Silver Line Metro stations.
Tech-savvy workforce

Todd P. Haymore, secretary of commerce and trade at the time of the announcement, said in a statement that “with one of the largest technology workforces in the nation, Northern Virginia is an ideal home for the East Coast corporate campus.” He added that “nearly 7,000 Virginians already are employed by this global leader.”

Of the Fairfax population 25 years old and older, 60.3 percent have a bachelor’s degree or higher. Across the county line in Loudoun the figure is 58.8 percent. Loudoun County has the highest median household income in the country; Fairfax is second.

Gerald L. Gordon, president and CEO of the Fairfax County Economic Development Authority, expressed pride that Amazon chose to expand in the area, stating that “any community would be thrilled to have this employer and this kind of corporate presence, and I am delighted the county’s diversified IT base, workforce and quality of life offer the right mix for the company.”

Gordon says Amazon Web Services, with its new corporate campus in Fairfax County and existing operations in Loudoun County, fits what has become the Northern Virginia model.

Loudoun and Prince William counties are more aggressive in trying to attract various data centers because they have enough available space for the land-intensive projects, Gordon says. But “in many cases we’ll get the headquarters and they’ll put the data center out farther.”

As much as 70 percent of the world’s internet traffic flows daily through data centers in Loudoun, according to the county’s economic development office.

Creating a safe environment

In October, The New York Times and The New Yorker published stories detailing sexual assault and harassment allegations against movie mogul Harvey Weinstein.

The revelations inspired a Twitter campaign, #MeToo, encouraging other women to speak out. The movement unleashed an avalanche of harassment accusations that resulted in the firing or resignation of a number of powerful men, including U.S. Sen. Al Franken of Minnesota, U.S. Reps. John Conyers of Michigan and Blake Farenthold of Texas, and television figures Matt Lauer and Charlie Rose.

In December, the departure of Joe Alexander, the award-winning chief creative officer of The Martin Agency in Richmond, attracted the attention of The Wall Street Journal. 

The agency said that Alexander, who had worked on advertising campaigns for clients such as Walmart and Geico, was the subject of a sexual harassment complaint by a female employee. Alexander denied the allegation.

Virginia labor and employment lawyers say these high-profile incidents have put a new emphasis on efforts by employers to prevent sexual harassment in the workplace.

The U.S. Equal Employment Opportunity Commission describes harassment as “unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature,” conduct that “explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance or creates an intimidating, hostile or offensive work environment.”

Training to combat sexual harassment has been conducted in workplaces for decades. Nonetheless, an ABC News-Washington Post poll released last fall found that three in 10 U.S. women say they have put up with unwanted sexual advances from male co-workers, and a quarter say they have endured advances from men who had influence over their work situation.

Attorney Thomas R. Bagby urges employers to focus not only on avoiding sexual harassment claims, but on creating an atmosphere that embodies “a safe and comfortable working environment.”

To keep everyone safe, companies should have an up-to-date, well-enforced anti-harassment policy, says Bagby, a partner with Woods Rogers in Roanoke. He reports that his firm is seeing more clients who are seeking to bring harassment cases against their employers. “The key is that any claim of harassment is taken seriously,” he says. “The best way to defend yourself is to be able to say that when we became aware of the problem, we took steps and made sure not to have it again.”

Gregory Branch Robertson, a partner with Hunton & Williams in Richmond, adds that each company needs to have “a statement of policy [on sexual harassment] written in plain understandable English — or Spanish” or any other language prevalent in the workplace. He says companies should have employees sign the policy to acknowledge that they’ve read it and make sure the document is widely circulated by posting it in the workplace and by including it on the company intranet.

Companies should promise employees who make a complaint that it will be handled discreetly but “be careful about promising anonymity, because sometimes you can’t do it. You can be as anonymous as possible, but I don’t think you can promise it,” Robertson says.

Bagby and Robertson emphasize that companies also need to provide every employee with more than one avenue of complaint. Reporting an incident to an immediate supervisor may be the usual step, but not if the supervisor is the one being accused of harassment. Company policy should outline various alternatives: human resources, the legal department or an outside hotline.

And “once you’ve got the policy out there, you need to revisit it on a periodic basis,” Robertson adds. Anti-sexual harassment policies, like many other policies, often are included in an employee handbook that “sits in a pile of paper. Employers have to be diligent.”

The right training
Employers also have to be diligent about providing proper training so that employees understand how to voice harassment claims and managers know how to respond to them, says Karen A. Doner, founding partner of Doner Law PLC in McLean.

“Training is a smart investment and not overly pricey,” Doner says.   For example, the cost generally starts at $1,500 for her firm to conduct training.

“Attendance by all levels of employees and management, including the president of the company, should be required,” she says. The participation of upper-level management “sends the message that the company takes these matters seriously.”

Doner also recommends in-person training instead of conducting a class online.  “Online programs lack meaningful interaction and the ability to ask questions or engage in discussion,” she says. “In-person training by a professional, with hypotheticals and a Q&A session are ideal.”

Robertson also sees in-person training as more successful because it allows for more than a “check-the-box” experience. Training that affects people’s behavior “requires everyone to step up, pay attention and participate.”

Good training costs time and money, but harassment, he notes, “has consequences. It’s tragic for victims” and harmful to the organizations.

Bagby believes that the publicity about sexual harassment cases has resulted in the issue being taken more seriously.

“Right now, one thing that is making it more effective is that people are seeing that powerful people are having their careers ruined,” he says.

Policy applies to all
When considering anti-sexual harassment policies, lawyers say, employers also must consider customers, clients and third-party vendors.

“If somebody who comes in to fill the soda machine is harassing an employee, then the employer has the same obligation as if that person was an employee,” says Robertson.

“At end of the day, if a third party engaged in that conduct, then the employer is in a position to say to that person’s employer: ‘Do not send that person to our workplace. We need to meet. This causes me to reconsider whether you are the proper vendor.’”

Robertson says he’s seen few examples of employees harassing outside vendors, but the same rules apply. “That type of conduct is not conduct that has a place in the workplace, no matter who it is directed at.”

Worries about sexual harassment extend beyond the physical workspace into social media, Robertson says. Employers should encourage employees to report alleged incidents of harassment not only if they occur on the work site, but also if they occur on social media.

One company’s path
Virginia’s largest industrial employer, Huntington Ingalls Industries, has taken the anti-sexual harassment steps recommended by legal experts.

The Newport News-based shipbuilder has policies and procedures to address sexual harassment complaints, says William R. Ermatinger, the company’s executive vice president and chief human resources officer.

HII provides its own annual training that walks employees through what they can do if they have complaints. And it has an outside hotline that employees can use anonymously.

“If it happens, we take it seriously; we will address it,” Ermatinger says.

But more important than responding to complaints, he says, is preventing them in the first place. That is accomplished by fostering a corporate culture that has zero tolerance for such behavior.

“What is the tone at the top, the tone in the middle, the tone on the ground? Employees listen with their eyes, not their ears. I can say, ‘Do the training, publish the poster.’  We do,” he says. “But more importantly: What experiences are we creating in our workplace that formulate people’s beliefs? Is our behavior consistent with our core ethics?”