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Boeing consolidating Washington presence with new Crystal City office

By Marjorie Censer and Jonathan O'Connell
Capital Business Staff Writers
Sunday, March 6, 2011; 10:02 PM

Defense contractor Boeing is bolstering its Washington area operations by finalizing plans for two new office complexes, in Crystal City and Germantown, where it will collectively move nearly 1,000 employees.

In Crystal City, the company is preparing to break ground by the end of the year on two buildings overlooking the Potomac River that will house nearly 500 people and consolidate its Arlington operations.

At the same time, the company is negotiating, with the help of state and county incentives, a new lease in Germantown that would allow it to keep Digital Receiver Technology, a Boeing subsidiary with 470 employees, in the area.

The moves would give the contractor, fresh off winning a $35 billion contract to build aerial refueling tankers, two locations that offer room to grow.

The Arlington consolidation reflects Boeing's efforts to reduce its overhead costs, a theme among defense contractors as they anticipate reduced budgets and an increased Pentagon focus on efficiency. Raytheon, for instance, relocated about 1,400 employees from four local offices to form a Northern Virginia campus at AOL's corporate park in Dulles.

The deal is also important to Crystal City, which is reinventing itself after losing the U.S. Patent and Trademark Office to Alexandria in 2005, and faces major losses as the Pentagon's Base Realignment and Closure initiative , or BRAC, shifts thousands of jobs to other local sites.

Boeing spokesman Dan Beck said the area remains attractive to Boeing, which works with the Pentagon, NASA, the Department of Homeland Security and other area agencies. He added that Boeing's government operations team, now in Rosslyn, needs access to Capitol Hill.

"It just makes good sense for us," Beck said, citing Crystal City's proximity to Metrorail. The site will also have about 550 parking spaces below the buildings.

Beck said the company also wanted to keep operations in Montgomery County. "We hope to . . . be finished with the lease negotiations by May," he said. "We are firmly committed to that local community." He attributed the move to "getting into the right kind of facility for us and for future requirements."

The company plans to move to Milestone Business Park, just across Interstate 270 from the Century Boulevard offices where DRT is currently located, which has space to add two additional buildings totaling 430,000 square feet.

Steve Silverman, Montgomery County director of economic development, said the state and county have agreed to provide $900,000 in tax incentives to retain the company and its employees, with the expectation that it will add 100 to 200 jobs in the future. He pointed to a stringof other companies, including Choice Hotels, that decided to remain in the county after considering sites in other areas.

In Arlington, Boeing's new complex would be built on a 4.7-acre site at the northern edge of Crystal City, where a motel and warehouse currently sit. Monument Realty plans to build Boeing a six-story, 325,000-square-foot building and a five-story, 131,000-square-foot office, connected by an atrium. Boeing would exit two leased buildings, at 1200 Wilson Blvd. in Rosslyn, where Boeing rents the full building, and at 1215 S. Clark St., where the company has most of the office space, Beck said.

Nearly 500 employees would be relocated to the new offices and the company might construct a third building with four floors and 102,000 square feet if it needs more space. Beck said the company expects to be fully moved into the new facility by the end of 2014.


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