Higher home prices. Booming retail sales. A low unemployment rate. All are highlights from the latest Loudoun County Department of Economic Development's economic review.
"In the current environment there are minimal areas of concern," the report says. "Among them, however, is the threat of terrorism and building inflationary pressures, particularly in energy."
Larry Rosenstrauch, 56, has directed the county's economic development department since 1996. He recently discussed the latest economic report, which covers the second quarter of this year.
QAs you know, Loudoun's population has grown faster, on a percentage basis, than any county in the United States. What are major economic development issues facing the county?
AManaging our success is a good theme of a way to understand that. Success is composed of creating an economy that has gone from agriculture to all kinds of other sectors over the last 40 years. We were an economy that was primarily only agriculture before that. So we are growing a new economy here, and we are also building a completely new population base. Ninety percent of our residents were not here 10 years ago.
How has the economy changed since you came here eight years ago?
We've seen rapid changes, particularly on the real estate development side. There was a lot of vacant space for a while. But now we're seeing that vacant space frequently get absorbed. The latest monthly indicators show that industrial vacancy rates in the county are down . . . from 11.8 percent [last year] to 7 percent.
Who is moving into these facilities?
An example is M.C. Dean, which is arguably the leading technical service/electrical contractor in the region. They are moving their headquarters to Sterling [from Chantilly].
Your report says retail sales in the county have increased by more than 10 percent for three straight quarters. What is going on here?
That's triggered by what we call "rooftops," our shorthand for population growth. We're building a lot of housing and putting a lot of people in those houses. So the food industry, both in restaurants and retail stores, is growing, as an example. We are attracting all of the brand names for food, with Wegmans being the preeminent example in our region.
The information technology sector is making a comeback in the county after a three-year slide. Any examples?
Of course, we have two major brand names, which are also global brand names: AOL and MCI. Both have been coming through restructuring. We know that AOL is beginning to burst at the seams on its own campus. So we are expecting AOL's growth to continue somewhere in Loudoun. And there are smaller companies that are growing, too, like Vargis, a geographic information system [company], which moved into about 5,000 square feet off Sterling Boulevard.
The unemployment rate in the county through April was 2.1 percent, compared with 3 percent in the Washington region and close to 6 percent nationally. Why is the rate so low in Loudoun?
We have a hot economy. That's the short answer. We're actually down to 1.9 percent now in Loudoun and in Northern Virginia. We have lots of people who want to move here, and most of them are getting jobs. And we're seeing service jobs being bid up -- the $10- to $15-an-hour jobs like waiters and landscaping contractors. And, anecdotally, you're seeing a huge amount of Hispanic labor in the construction and janitorial industries.
Loudoun issued 2,126 permits to build new residences in the first three months of this year. Your report predicts the county will issue 6,341 permits, resulting in about 17,000 new residents by the end of the year. Could this create any problems?
We'll be growing by roughly one and a half Williamsburgs! Williamsburg has about 12,000 people. So [at this pace] we'll have to add new services to service the whole city of Williamsburg and another half of Williamsburg every year. That's a lot.
What's your position on the number of permits being issued? Too many?
Our position is whatever the board [of supervisors] wants. We work for the board of supervisors, and they set the policy. And we implement it. We have interpretations and positions on the validity and value of data sets. But we don't make policy.
Housing prices in Loudoun increased 16.8 percent between the first quarter of this year and the first quarter of 2003, compared with 6.5 percent nationally and 19 percent in the Washington region. What's been the effect of the rising housing prices on the county?
We all go to restaurants, and we all want waiters. We all want to buy houses, which require contractors to build them. These houses just don't build themselves. And the folks that do these things -- that wait on us, that prepare our foods, that take away the trash -- have to live somewhere. So we are at a point where our region needs to deal with lack of affordable housing. It's a major impediment to importing labor. When companies look around and say, "Gosh, should I locate my business in Loudoun and Northern Virginia or in Charlotte?" they look at housing costs.
What are your thoughts on the threat of terrorism affecting economic development in the county?
It's an enduring concern. I believe we're in a position now where it feels like we're going to be in a permanent condition. When I was a boy, we were always living with the threat of a bomb [falling]. And now we are always living with the bomber, somebody that is going to do something bad . . . maybe do in your entire city or country. We are vulnerable because we are a natural target as the nation's capital. In Loudoun, we are also vulnerable because we have a significant amount of the nation's infrastructure for information technology, and we also have the major global airport for the region here. All these things tell you that you have to exercise vigilance and really stay at the top of your game.