VW's Move to Herndon Revs Economy
Monday, May 19, 2008
If you want to see a classic economic stimulus package, forget the U.S. government's check-writing campaign or suggestions from some presidential candidates of a cut in the federal gas tax.
Instead, check out Volkswagen of America's ongoing move from suburban Detroit to a six-story office building along the Dulles Toll Road in Herndon, which is putting a $100 million pop in the region's economy.
It's not like the company is building a sprawling assembly plant employing thousands. Even a few hundred highly paid executives cannot have a huge effect on a local economy that produces $407 billion in goods and services a year and employees 3.4 million, one of the largest labor forces in the country.
But VW's arrival shows how -- even in a small way -- a new employer can add a little heft to businesses of all sizes. From hiring office designers to buying hundreds of chairs and desks, from employing construction contractors to installing coffee and vending machines, the company is adding oomph to the area's economic engine.
VW, based in Germany, moved its U.S. division into the 185,000-square-foot headquarters April 21. The building, owned by New York real estate giant Tishman Speyer, is on Ferdinand Porsche Drive, named for the German auto inventor whose company is a shareholder of the VW empire.
About 100 people have moved into the building. More are on the way. About 400 employees will eventually work in the new headquarters, and the company said that could expand if VW reaches its goal of tripling U.S. auto sales to 1 million a year by 2018.
VW employees have bought nearly 60 homes and leased another 50 housing properties. The firm has been working with Tutt, Taylor & Rankin Sotheby's International Realty to find permanent housing. In the meantime, Van Metre has rented VW several corporate housing units and has helped sell new homes to employees.
"There is a trickle down," said Jim Dinegar, president of the Greater Washington Board of Trade. "They are looking for housing, Realtors, contractors, finding where to buy the latest dishwasher . . . where to send their children to school."
Bill Davidson, general manager for affiliate operations and real estate for Volkswagen Group, said he retained Chasen's Business Interiors, based in Richmond, to buy nearly 1,000 office chairs and nearly as many desks and to outfit workstations and 30 conference rooms. The furniture in the building is designed by Herman Miller of Chicago and by Interstuhl, a German furniture maker.
Avitecture of Sterling is outfitting VW's meeting and conference rooms with the latest audio-visual gadgetry. "We are delighted," said Sidney L. Lissner, the company's president. "There are very few high-profile corporate clients. It's one of the bigger jobs."
Davidson oversees everything from Chicago-based office designer VOA Associates to the installation of 10 coffee machines (two per floor) and a slew of vending machines run by Canteen, based in Charlotte.
VOA's job was to convert VW's ideas for an intimate office space into reality. To help soften the surroundings, VOA hired Rand Construction to build a six-story atrium in the heart of VW's office building. The project was overseen by the Washington office of Staubach, which is based in Texas.
Creating the atrium meant cutting a giant hole in the middle of the building and putting up a staircase linking the second through sixth floors.
"It's a wonderful idea," Davidson said. "It's so cool."
Davidson would not discuss numbers, but he said the move from Auburn Hills, Mich., has been significant, even down to the hundreds of taxi trips ferrying employees to and from Dulles International Airport. Volkswagen also rented conference space in Westin at Tysons Corner to host a jobs fair.
Volkswagen of America's president and chief executive, Stefan Jacoby, said in an interview last year that Northern Virginia's high-quality schools, skilled workforce and proximity to the airport made it attractive.
Virginia gave Volkswagen nearly $6 million worth of incentives, including a $1.5 million cash payment in the next year and $4.5 million over five years beginning in 2011 if it meets certain benchmarks. Fairfax County will spend at least $1.5 million to accelerate road and land projects to ease Volkswagen's move.