Northrop Grumman move raises stakes for D.C., Maryland, Virginia leaders

By Rosalind S. Helderman and Aaron C. Davis
Washington Post Staff Writers
Thursday, February 25, 2010

RICHMOND -- Earlier this month, top executives from defense behemoth Northrop Grumman conducted the economic development version of speed dating.

In search of a new home for their corporate headquarters, the company's leaders first went to Richmond, where they were wooed by Gov. Robert F. McDonnell (R). Then they went to Annapolis for a rendezvous with Gov. Martin O'Malley (D).

Top company officials have also flirted with the District and met with Mayor Adrian M. Fenty (D) before Christmas. They have made clear that Northrop won't be a cheap date, saying that tax incentives will factor into their decision, which they expect to make in the next few weeks.

The Los Angeles-based company is so emboldened because it has what every political leader in the United States wants: hundreds of high-paying jobs. That means that the publicity surrounding the move has raised the stakes considerably for McDonnell, O'Malley and Fenty, turning what probably would have been a quiet competition into a test of personal reputations that will hand one elected leader a political triumph and the others an open defeat.

"The stakes couldn't be higher," said Quentin Kidd, a political science professor at Christopher Newport University in Newport News, Va. "We want jobs, but it's not just the jobs. We want something of an emotional win, and this would be a real emotional win."

Maryland officials said they have been following up with weekly calls to Northrop, having the state's congressional delegation reach out to company leaders and getting other chief executives from defense and other industries to pitch the state.

"We want them to know we are taking the time to understand their needs and make sure they feel the personal touch along the way," said Christian S. Johansson, O'Malley's secretary of business and economic development, who was among those who met with Northrop executives during their visit to Annapolis.

Virginia Lt. Gov. Bill Bolling (R), who was tapped by McDonnell to lead job-creation efforts, said state leaders are "working very aggressively with [Northrop] to try to put together as good a package as we can and show them why Virginia's the place for them to be. We understand we are in a significant competition with Maryland and the District of Columbia."

The D.C. Council is weighing legislation to provide Northrop with $7.4 million in tax incentives and relocation grants, packages that could grow much larger.

Aris Melissaratos, former secretary of Maryland's Department of Business and Economic Development and a former executive at a company that was sold to Northrop, said he had spoken with economic development officials from all three Washington area jurisdictions. He said he understood that the District would put up $20 million in tax incentives, and Virginia even more.

Officials in the three jurisdictions were hesitant to tip their hands by revealing details of what they're doing to win over Northrop.

Government enticements

For McDonnell, landing Northrop Grumman would be a huge victory weeks into his first year in office, allowing him to burnish his job-creation credentials and to make the case that his conservative approach to taxation and business regulation is the surest path to economic growth.

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