Elie Ashery's Internet startup is precisely the kind of successful company Prince George's County wants to keep.
First, Newsletters.com is ideally located in the county's heavily marketed "high-technology triangle," in the northern half of the county. It's also on Route 1, the 15-mile industrial and commercial thruway that runs from Hyattsville to Laurel, where the county hopes to focus its revitalization efforts.
Second, the company is growing quickly and already has $1 million in angel investments with more coming from a West Coast venture capital firm. The company, a Web-based umbrella for 350 professional newsletters, is planning to add 80 more employees to its current 20 by the end of next year.
But Ashery, who started the business a little over a year ago in his parents' basement with childhood friend Ari Jacoby, is planning to move the business out of the county--and into Rockville, Montgomery County's technology center--within the next couple of months.
"It became a problem to recruit high-level executives," most of whom live in Northern Virginia or Montgomery County and don't want to commute all the way to Prince George's, said Ashery, 24, co-chairman and executive vice president of the company. "An address does make a difference in everything, from employee morale to recruiting talent," he said, adding that the company's College Park location lacks that cachet.
The Prince George's Economic Development Corp. is trying to counter that image. The county offers companies such as Newsletters.com a high-technology incentive package, which includes a five-year real estate tax abatement on construction and renovation, a 100 percent property tax abatement for research and development equipment and expedited approval and permitting for construction and renovation. The incentives are administered through the county's Economic Development Corp., the quasi-public group that oversees state and local economic development packages.
Prince George's County also recently announced that it was receiving $1.5 million in federal funds to spend on street beautification and loans or grants for improving business facades, said Joseph J. James, president of the EDC. James said the EDC is hoping to triple those funds with grants from state and local governments.
That doesn't sway Ashery. "It's nothing to turn my head," said Ashery, who says the view from his office window is still of a burned-out restaurant and several shuttered buildings on Route 1.
"If they want to spur economic development in the county, that type of stuff doesn't mean anything" to a startup company like Newsletters.com, he said. Startups typically don't build their own buildings, so they don't need real estate abatements, he said.
He compared those incentives with some offered in neighboring Virginia--tax credits for training employees, a better infrastructure for high-tech companies and a bigger talent pool.
In Arlington County, there also is a package that includes a 50 percent gross-receipt tax credit for online publishers and Internet developers and service providers, said Terry Holzheimer, director of business investment for the Arlington County Department of Economic Development. Arlington also has "tech zones," where businesses receive a 50 percent gross-receipt tax credit for moving into office space, and a program to encourage developers to install additional cables into their buildings to make them attractive to technology companies, he said.
Fairfax County offers no incentives other than those offered through the state, but Fairfax economic development officials have called to try to lure his company, Ashery said.
In the end, though, he has picked Montgomery because most of his staff members live in Maryland and because Rockville brings him closer to other, similar high-technology companies, he said.
"What would interest me is a rental tax credit, or training tax credit," Ashery said, because "we're bleeding [money] all over the place."
Labor costs, Newsletters.com's largest monthly expense, run about $50,000 a month, while rent for the 1,900-square-foot College Park office is more than $30,000, Ashery said.
James said the county's economic development office is stepping up its efforts to address high-tech company needs. Last month, the Prince George's Technology Council convened for its first meeting, with about 15 founding members, he said. In two months, the EDC plans to unveil a loan program for smaller technology companies in the county.
That's too late to keep Newsletters.com in College Park, however. "We are totally financed with equity financing, and we're at a stage where a $20,000 or even a $100,000 loan wouldn't do that much," though it may benefit a startup looking for initial funding, Ashery said.
"I applaud the EDC's efforts, but it's not something that would keep us," he said.
CAPTION: Ari Jacoby, left, Jeff Ronaldi and Elie Ashery plan to move Newsletters.com from College Park to Rockville. The county Economic Development Corp. is trying to spur high-tech development.