Government officials throughout the Washington area are offering millions of dollars to lure defense giant Northrop Grumman.
Both Maryland Gov. Martin O’Malley and Virginia Gov. Bob McDonnell have met with Northrop Chief Executive Officer Wesley Bush to pitch their respective states. The Los Angeles defense contractor plans to relocate its headquarters to the Washington region next year.
The District is also competing, and has offered $25 million in tax breaks and other incentives.
Virginia and Maryland counties would not disclose the details of their proposals, but they are expected to be in the millions of dollars when combined with state incentives.
Details of the move:
» Northrop Grumman plans to move its headquarters and about 300 executive positions from Los Angeles to the Washington area in 2011.
» Possible sites: Montgomery and Prince George’s counties in Maryland; Alexandria and Fairfax and Arlington counties in Virginia; the District.
» Decision sometime in the spring.
Though Northrop employs only about 300 people at its headquarters, those jobs are mostly high-salaried executive positions that would bring wealth and decision-making power to the region, which is already home to about 40,000 of Northrop’s 120,000 employees. The relocation also means the high-profile company would call the Washington area “home.” Stephen Fuller, an economist at George Mason University, said Virginia was Northrop’s probable destination thanks to the state’s business-friendly economic climate.
“Northern Virginia is sort of walking away from the rest of the region as a business center,” Fuller said, highlighting the Old Dominion’s favorable corporate tax structure.
Anirban Basu, a Baltimore economist and policy consultant, argued that Maryland and the District stood to gain more from bagging a corporation of Northrop’s stature.
“The real gain here is not the 300 jobs that would come [with Northrop], but the jobs that could come with enhanced reputation among business owners,” Basu said, explaining that Virginia’s reputation — unlike that of Maryland or D.C. — could hardly be better.
Last year, after a similar bid scenario, Virginia and Fairfax County won Hilton Hotels with $4.6 million in incentives when the hospitality company decided to move its headquarters and about 300 jobs to the region from Los Angeles.
Montgomery County offered a losing bid of $2.725 million.
“It’s always disappointing when you don’t succeed,” said Steve Silverman, Montgomery County’s director of economic development.
In going after Northrop, he stressed the importance of securing new jobs for his county in light of the current economic climate.
A handful of Virginia and Maryland counties have submitted bids, but perhaps the most likely candidate is Arlington County — home to the Pentagon and hundreds of Northrop employees, many of whom work in a Wilson Boulevard high-rise boasting stunning vistas of the Potomac River and Washington’s monuments.
Terry Holzheimer, Arlington’s director of economic development, would not discuss details of the county’s proposals but did confirm that Arlington had thrown its hat into the ring.
Regardless of where Northrop lands, the region will benefit.
“For a company of this size and reputation to move its center of gravity to the region, it enhances the Washington area’s reputation, both domestically and internationally,” said Matt Erskine, an executive with the Greater Washington Board of Trade.
Northrop said it plans to announce its decision in the spring.
