As the federal government begins to cut back its programs, Arlington County's economic boom days may be drawing to a close, demographics analyst Atlee Shidler warned this week at an economic development seminar sponsored by the county's chamber of commerce.
On the other hand, if the District's downtown area expands, an official of the Oliver T. Carr development company told the gathering, Arlington County will be a logical spillover growth area.
"The Washington economy grows mainly in response to large expansions of the role of the federal government in the nation's affairs," said Shidler, who is executive vice president of the Greater Washington Research Center. During the past decade, he said, a 60 percent increase in the number of federal regulatory agencies and a tenfold increase in the number of cities and towns receiving federal aid "brought to Washington a veritable flood" of private lobbyists and consultants that spurred tremendous economic growth in the Washington area.
But, he added, "It seems to me prudent for us to assume that great expansion of the role of the federal government in American life, which has now ground to a halt, will not be renewed any time in the foreseeable future."
Arlington County will remain, however, "a logical place to expand a downtown office core," predicted Richard W. Carr, a land buyer for the Oliver T. Carr Co., Washington developer. Carr said his company has looked at areas in Alexandria, Silver Spring and Bethesda, and has decided that "Arlington is one of those we find the most attractive," largely because of convenient transportation systems.
Carr, who recently announced plans to start a 745,000-square-foot office complex near the Ballston metro stop, is among several developers who plan to begin construction soon of about 6 million square feet of office space in the county. All but one million of the existing 16 million square feet of office space in the county has been built in the past 20 years, most of it in Rosslyn and Crystal City. Arlington has the 10th-largest office market in the United States, one speaker pointed out.
Whether or not economic growth continues, Shidler said, competition for development will be more intense. Lower costs of housing and land and a growing labor supply in easy-to-reach outlying counties will cause development to spill over into Prince William, Loudoun, and Stafford counties in Virginia and Howard, Frederick and Prince George's in Maryland.
Shidler qualified his predictions of a decline in government-spurred development by saying that severe economic or military problems could bring renewed federal involvement and thus attract more people who want to do business with the government. Arlington, he pointed out, "straddles a $200 billion customer--the Pentagon."
But Arlington County econonomic development head Thomas C. Parker, noted after Tuesday's meeting that the federal government may not be such a reliable customer for office space. He said that the Department of the Navy, which employs 18,000 persons in 2.9 million square feet of leased offices at 13 locations around the area, is considering consolidating facilities in several years in space it owns. Most of the leased space is in the Virginia suburbs.
Among the consolidation sites under consideration are the Pentagon and Crystal City. But Parker acknowledged that if the Navy were to desert Arlington for one of the other sites under consideration--the Washington Navy Yard in Southeast or the Naval Surface Weapons Center in White Oak--it would have considerable impact on Arlington, which in the past several years has absorbed new office space at a yearly rate of about 750,000 square feet.
James B. O'Brien, vice president of the Coldwell Banker commercial real estate office in Washington, suggested that, in light of current reductions in government involvement, "this might be an opportunity to break the reliance on the federal government."