Posted on 08/02/17 by Christina Winn
If I had one word to describe our business recruitment and retention efforts in fiscal year 2017, it would be momentum. Arlington Economic Development’s (AED) efforts to recruit and retain a new, diversified set of brand name companies succeeded in reducing the overall commercial vacancy in Arlington by nearly 4% in the past two and a half years. When we started this journey with 'The Way Forward' strategy in early 2015, Arlington was facing a commercial vacancy rate of 21.7%, meaning one-fifth of our 40 million square feet of office space was empty. The tax revenue losses alone are astonishing with every 1% of vacancy equating to a loss of approximately $3.4 million annually – greatly impacting Arlington County’s ability to provide the excellent services and education for which it is known. Now, thanks to the momentum we’ve created, more companies are choosing to locate in Arlington and our vacancy rate has dropped to 17.8%.
We have had some amazing wins in FY17 that will continue to drive economic development in Arlington. AED’s direct assistance in new business recruitment and the retention and expansion of quality Arlington employers amounted to over 5,600 jobs and almost 1.2 million square feet of office space, 37% of which is occupied by companies new to Arlington. Most notably was Nestlé USA’s selection of Arlington for its new headquarters location, leasing 205,000 square feet of office space in Rosslyn. Nestlé, moving from Glendale, CA, will be hiring 750 employees in the consumer goods industry and will be occupying the iconic 1812 N Moore building. Not only did Nestlé’s decision directly impact our vacancy rate, but its choice of 1812 N Moore, which has been vacant since construction, removed a stigma surrounding the building and Arlington. The addition of Nestlé validates ‘The Way Forward’ strategy of diversifying our industry base to reduce our dependence on the General Services Administration and its federal tenants.
Another core principle of ‘The Way Forward’ strategy is to solidify a tech ecosystem in Arlington. To do this we have marketed Arlington to the tech community, nationally and internationally, as a place where innovation happens with the help of funding from federal research science agencies, such as the Defense Advanced Research Projects Agency (DARPA) and the Office of Naval Research (ONR). With our creative marketing programs, such as the Gazelle Grant incentive and our StartUp Arlington contest, we have specifically targeted fast-growing, scalable tech companies. Validating our efforts, 100,000 square feet of this year’s successful deals have been in our targeted tech industry clusters, such as cybersecurity, big data, and financial tech. Notable fast-growing tech companies new to Arlington include Trustify, Video Blocks, Stardog and BluVector.
Retention and expansion of our current employers have also been strong, indicating that Arlington’s competitive business environment and highly qualified workforce allow our businesses to be successful. The retention of media companies, BNA Bloomberg and WJLA/Sinclair are significant wins that account for 380,000 square feet and 1,500 jobs. Standing alongside other notable Arlington companies like Politico, PBS, WETA and Graham Holdings, the media sector has solidified as a foundational industry base.
Even with all our success this year, the future is challenging. National Science Foundation will be moving at the end of this year, vacating more than 600,000 square feet and increasing the vacancy rate by 1.5%. And this isn’t the only hurdle, there are fewer projects in the national pipeline, increasing competition from state and regionals communities, effects of teleworking and the right-sizing of office spaces. Do we have enough momentum to override of these factors? While I can’t predict the market, I do believe the foundation laid by the AED team demonstrates our ability to mobilize quickly, think outside the box and tackle tough issues, allowing Arlington to continue moving forward. Next year will be a challenge but with our great partners at Virginia Economic Development Partnership, Arlington Chamber of Commerce and the Ballston, Crystal City and Rosslyn Business Improvement Districts, we’re well equipped to market Arlington, retain companies and welcome new businesses with open arms.Topic: BIG Update