Wednesday, January 6, 2010
Why Washington D.C. Won’t Land the Northrop HQ Office
Since Northrop Grumman Corp. announced it would move its headquarters to the D.C. area, local officials in Washington, Maryland and Virginia have been turning on the charm, trying to woo the company to relocate in their respective areas. I’ve had a few questions about the hoopla generated by this announcement, which were ably answered by an article published today in the Baltimore Sun.
Question one: Really, why is this such a big deal? All the published reports about the move have noted that the HQ move will only add 300 jobs to the area. Sure, that’s about nine Washington City Paper offices combined. But just yesterday, the D.C. Council arranged a tax abatement for the CoStar Group—which may move into the city—with the expressed promise that the company would hire 100 District residents. And of course, others would be coming from the Bethesda office.
Besides that, Virginia already has 40,000 Northrop employees. So 300 more…who cares, right? The Sun article says cities are lured in by the prestige:
It’s the prestige of being home to a Fortune 100 headquarters that local leaders particularly want, along with having highly paid top executives as residents and the extra charitable giving, civic involvement and economic growth they can provide.
Question 2: Could D.C. actually win this battle? Virginia seems like the obvious front-runner with 40,000 employees there already, as previously stated. The Sun article notes that “Maryland has a cluster of defense contractors, including Bethesda-based Lockheed Martin Corp., and some have been opening outposts here to prepare for the local business opportunities of the national military base realignment and closure process.” Other stories have included rather cryptic quotes about Northrop employees befriending government officials (See Politico’s “How well are you going to know the Obama team from several thousand miles away?”*) So I guess being right in the thick of Washington D.C. could make a difference. But, realistically, people are betting against the city (this is again from the Sun story):
Washington, which has 1,000 Northrop jobs now, strikes him as out of the running. The potential threat of a terrorist attack is omnipresent in defense contractors’ minds, so he doubts one would choose to locate its leaders there. Maryland and Virginia benefit from being near the nation’s capital but at a potentially safer distance, though “there’s a clear pattern among the recent arrival of defense companies in Washington: They tend to favor Northern Virginia,” [Loren B. Thompson, a military analyst at the Lexington Institute] said.