A carefully selected panel of six corporate executives last week extolled the virtues of Virginia to visiting business leaders that the Greater Washington Board of Trade wants to lure to the metropolitan area.
The panel was part of the board of trade's $25,000 attempt to join together local jurisdictions for a massive "sell-a-thon" of Washington's advantages for businesses. The board staged its first Executour -- as the two-day sales pitch called -- two years ago and 10 of the 34 firms invited have expanded or relocated in the area, said a spokeswoman for the board.
The panel appeared to sound a note of economic harmony -- that is, until half of its members mentioned that they had moved their firms out of the District and into Northern Virginia.
That disclosure pointed up the sometimes fierce competition among Washington area jurisdictions to entice firms to relocate or expand within their borders to help earn needed corporate tax dollars and generate more jobs for residents.
The business of luring business has become professionally packaged and planned, with most jurisdictions using their own film presentations, salutations from high-level elected officials, budgets as large as $100,000, private entertaining of relocation prospects and trips to California, New York, Japan and Europe to convince firms there to relocate or expand in the Washington area.
But local jurisdictions have equally fierce opponents elsewhere in the battle for business. One of the Washington area's main sources of competition, some local officials said, comes from the fast-growing Sunbelt states. For example, one of the visitors wooed by last week's panel said he had just returned from a similar program in New York hosted by representatives of four cities near Dalles.
For the board of trade's sales campaign last Wednesday and Thursday, two Gold Line Service chartered, air-conditioned buses guided the 25 visiting executives -- representing a range of institutions from small trade associations to large firms such as the Merchandise Mart in Chicage -- through new construction and renovation, superhighways and small roads, $300,000 homes and lower-priced townhouses in the District, Maryland and Virginia. The business representitives, selected because they had shown an interest in relocating at least some of their offices, were served champagne, free drinks and shrimp and scallop luncheons; given accomodations at the Four Seasons Hotel in Georgetown and smothered in slide shows.
Government officials from each area extolled the advantages of their domain.
Virginia had Lt. Gov. Charles S. Robb, Maryland provided Lt. Gov. Sam Bogley and the District had Mayor Marion Barry.
The visitors were greeted at the Capital Centre by two Dips soccer players and a "Sidekicks" team cheerleader in a scanty red skirt and white T-shirt handing out Dips pennants.
In an attempt to attract the sports-minded, a Prince George's County official made a point of emphasizing that the county is the home of former World Boxing Council welterweight champion Suger Ray Leonard, that Leonard is building an expensive home there and that the former champion often runs along county roads to stay in shape.
Many of the visitors said they were particularly impressed with Fairfax County -- perhaps partly because they were whisked past motorists sitting bumper to bumper during rush hour. Two county motorcycle police, with red lights whirling, stopped traffic at Tysons Corner and on the Beltway to make sure the entourage stayed on schedule.
"In Fairfax, you're whisked through traffic with police escorts," said John Thiel of the American Dietetic Association in Chicago. "Then you go into Alexandria and wham! You're stuck in traffic, there are dilapidated houses. It's a stark difference."
Each jurisdiction was given time to promote its own area through receptions, luncheons and professional slide presentations. But in the battle for businesses with big bucks, the District had less fancy ammunition at the ready than the other areas.The District, for example, didn't even have a slide show and had to develop one at the last minute. The city can offer few financial incentives and cannot even issue the popular industrial revenue bonds and other forms of financing that Maryland and Virginia can -- and do -- provide.
The District doesn't even have a budget allocation to run an office of economic development. Its development efforts must survive on grants.
Mayor Barry last week told the visitors that he was glad Maryland and Virginia helped foot the bill for parts of the two days of tours, "The city doesn't have any money," he said, laughing.
In contrast, Maryland officials left Friday for two weeks of entertaining Japanese business executives. District officials, on the other hand, said they are still trying to prevent some firms providing entry-level jobs from leaving the city.
"We have to take aggressive steps to stem that trend" toward businesses fleeing the District, said Lawrence Schumake, the city's new executive director for business and economic development. Unlike the suburbs, he added, "there has not been land made available for expansion. We're looking at areas where light industrial expansion can take place.
"In the old downtown area, many firms in older buildings will be pushed out," Schumake continued. "Our concern is they're going to go out of the District because they have nowhere else [here] to go."
All of the businesses that have left or are leaving, however, are not simply pulling out of old building. One such firm is American Telephone & Telegraph Long Lines division.
"Long Lines was in Washington, D.C., but moved to Northern Virginia because we were running out of space," Michael Brunner, A.T.&T. vice president, told the visiting executives. Why Fairfax? "The place was right, the price was right and the county government people and community people were right."
Others who told the visitors they moved some offices from the District to Virginia were John M. Toups, president of Planning Research Corp., and Robert J. Perry, a vice president of Satellite Business Sytems.
For several years District officials have said they will try to promote the New York Avenue NE corridor as a place for light industrial business to relocate. But the board of trade's tour buses last week did not go to New York Avenue area which contains some of the city's most dilapidated housing and is far from new construction activity downtown.
Schumake said the visiting executives were not shown the corridor because of time contraints and because the area "isn't aggresively under development."
Corporate taxes are higher in the District than in the other jurisdictions, Schumake said, because the city needs the revenue. Officials are attempting to expand the city's tax base by bringing in more businesses to prevent the introduction of higher taxes, Schumake said. He said he is also trying to make more city-owned land available for development.
While the District looks for light industry, suburban officials generally want more high technology, research and development. For example, the delegation of Maryland officials that left for a two-week tour of Japan primarily will discuss the possible opening of offices in the state by Japanese technology firms, said Ioanna Morfessis, director of Montgomery County's economic development agency and one of the officials making the trip. c
"I think it's going to be a learning experience for all of us," Morfessis said. "We'd like a shot at research and development, medical science and medical equipment and the communications sectors."
She said she expects to attend three to four meetings each day with Japanese business executives or government officials.
"They're really big on gifts," she said, adding that she is taking with her a suitcase full of Montgomery County lapel pins and pencil holders to distribute.
The executives interviewed from the group of business representitives being wooed to Washington would not say whether they would definitely move to the area, but some said they were interested.
"I came down primarily to see how the (area) has developed," said Frank R.
Sommer, director of real estate for AMF,Inc. "We're already in Alexandria, Washington, D.C.,Sterling, Richmond and Columbia. I wanted to see how things have grown. The area's not new to me but the development is."
Sommer said he had just returned from a disorganized presentation in New York by four cities near Dallas that are trying to lure businesses there.
"You've got the same organizations all over the country," Sommer said. "The whole idea is the same, to show you 'our' community is better than other places."
"We're obviously already interested in D.C., but no decision has been made," said the American Dietetic Association's Thiel. "We're not interested in any other city."
Thiel said his association isn't as concerned about high taxes and expenses in the District as are corporations that must be accountable to stockholders. "The D.C. address is very important," Thiel continued. "If you are going to move into the Washington area, there's a psychological impact to being in Washington."