Fueled by coffee and bagels, the Greater Washington Commercial Association of Realtors held a pep rally of sorts one morning last week at Ruth's Chris Steak House in Crystal City to bolster a Northern Virginia real estate community facing the possibility of millions of square feet of vacant office space.
The vacancies would be due to the Pentagon's base realignment recommendations, which have been forwarded by the president to Congress for approval.
Most of the speakers tried to pump up the crowd of about 60 people, saying the shift of defense department workers from commercial buildings in Arlington and Alexandria to government-owned land behind protected gates such as those at Fort Belvoir would diversify the local economy and make it stronger.
But the pompom waving wasn't universal.
"Alexandria gave us their report," said Rep. James P. Moran Jr. (D-Va.). "It was less upbeat. It was sort of a sky-is-falling report."
Moran has been one of the Pentagon's biggest critics on the issue, and he scoffed at the idea that the moves would save money or protect government workers. "The terrorists don't even know what these acronyms stand for," he said, referring to the alphabet soup of defense agencies that rent commercial office space in his district.
Fairfax County, of course, has plenty to cheer about. The Pentagon's plan will bring approximately 20,000 jobs to the county, mostly at Fort Belvoir and its engineering proving ground.
"The ancillary economic effects along Route 1 and Springfield will be substantial," noted Moran, although he said the population boom at the Army base in southeastern Fairfax County "presents enormous infrastructure challenges."
Many of the real estate agents in attendance eagerly anticipated the remarks of Brian McMullen of the Staubach Co., a real estate advisory firm that represents tenants in real estate transactions. McMullen said he did not know yet, however, whether government contractors would migrate south as well.
"At this point, it's really a wait-and-see attitude with our client base," he said. He said developers are now starting to look at building Class A commercial real estate in the area. The Route 1 corridor and Springfield have less than 10 percent of the county's 102 million square feet of commercial office space.
On Sept. 29, Fairfax County supervisors Gerald W. Hyland (D-Mount Vernon) and T. Dana Kauffman (D-Lee), along with the Fairfax County Economic Development Authority, will chaperone a bus tour of developers to "selected sites for office development in the Richmond Highway and Springfield areas," according to an invitation.
McMullen said there were many factors up in the air right now, including whether defense agencies would insist on "at-the-gate" proximity -- short driving distances -- to contractors who work with them.
The remarks certainly didn't comfort Mitchell Schear, president of Charles E. Smith Commercial Realty, which owns many of the buildings in Crystal City. Schear told his real estate comrades, "Don't be surprised if you see some legal actions," but even he seemed resigned to the idea that any kind of fight might be futile.
The Chamber to Lobby
The Fairfax County Chamber of Commerce has launched a new lobbying initiative to fight the sales tax imposed by the state on goods purchased by contractors that provide services to the government.
The Coalition to Keep Contractors Competitive will lobby Richmond to end the "true object test," which differentiates between goods purchased as part of contracted services to the government and goods purchased directly for the government.
"Virginia's government contractors should not be left to guess how their contract will be treated by the Tax Department and they should not be burdened with hefty tax bills which would not be owed in any other state," said chamber chairman George Cave in a written statement.
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