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Counties Step Up To Lure Business

Regional Group Starts the Process

By Neil Irwin
Washington Post Staff Writer
Monday, October 11, 2004; Page E12

Told that The Washington Post was planning to publish a package on economic development in the region, Fairfax County Economic Development Authority Chief Executive Gerald L. Gordon said, "The title should be: 'The advantages of locating in Fairfax and the disadvantages of locating anywhere else.' "

Gordon was playing the role that economic development agency heads are supposed to play: the county's top salesman.

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All of the counties in the Washington area have economic development agencies, which are generally funded by their governments. The District's efforts are headed by the Washington D.C. Marketing Center, which is funded by both the city and business.

The size and style of operations of the various agencies vary widely.

Fairfax County is the big kid on the block, with a $6.2 million annual budget, 33 full-time employees, and offices in Frankfurt, London, Tel Aviv, Tokyo and Bangalore, India.

Montgomery County has the same size budget and 40 employees, but those numbers include the county's agricultural services and workforce development operations and therefore are not directly comparable.

Nearby Stafford County, with a level more typical of smaller counties, has four employees, a $700,000 budget, and no overseas offices.

The exact role economic development agencies play attracting companies depends on the prospect. Some potential employers have extensive networks of consultants and real estate advisers who research locations, while others lean heavily on development agencies to produce data on taxes, real estate options, and other issues.

The Greater Washington Initiative, a group formed by the region's economic development agencies, pitches the D.C. area at events around the country and abroad. Once a potential new employer indicates an interest in the region, it sends out the information to local economic development agencies.

Then the local groups take over, arranging tours of their jurisdictions, and negotiating incentives, such as road improvements or low-interest loans. The negotiations can take a year or more.

"It's kind of like buying a house," said David Edgerly, director of the Montgomery County Department of Economic Development. "There's always an argument over the refrigerator at the last minute, some tense moment where you don't know whether the deal's going to happen or not."

Counties say they sometimes collaborate and sometimes compete. "Clearly there is competition," said Tim Baroody, director of economic development and legislative affairs in Stafford County. "But I think it's more of a friendly competition."

But when hundreds of jobs are at stake, the competition can get intense.

In 2002, Giant Food Inc. was looking to build a new facility for distributing produce and other perishable goods to its stores.

Prince George's County economic development officials were fighting to keep the facility in their county. Giant also seriously considered moving it to Delaware or Virginia. Ultimately, said Giant vicepresident of public affairs Barry Scher, it became clear that Howard County officials had come up with the most lucrative package of incentives -- worker training, breaks on electrical costs, and other goodies worth about $1.25 million.

They were trying to close the deal, and the only holdup was some needed improvements to a road near the Howard County site. Scher and Giant executives were on a conference call with Howard County economic development officials, who agreed the county would pay for improvements to the road, Scher said.

Scher put the speaker phone on mute, he recalled last week, and told his colleagues: "We can trust these guys." They took it off mute and said, "I think we have a deal." The Giant facility, with 550 jobs, opened last year.


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