Already located in New Carrollton, 2U agreed to a package of incentives worth an estimated $3.5 million in state and county funds that will have the company relocate nearby to one of the largest and most prominent buildings in the county, 7900 Harkins Road, in New Carrollton.
As part of the deal, 2U plans to double its current workforce from 650 positions to 1,315 by 2019. It then plans to add another 300 jobs and up its square footage from 168,000 square at move-in to 252,000 square feet by 2020. The incentives include a $1.5 million conditional loan from the county and $2 million from the Maryland Department of Commerce.
2U’s co-founder and chief executive, Chip Paucek, has long local ties. He graduated from George Washington University and served as a campaign manager for Senator Barbara Mikulski (D).
“We’re investing in our future and the 2U team with a new state-of-the-art facility that will match our unique corporate culture,” Paucek sad in a statement. “With the assistance of the Maryland Department of Commerce and Prince George’s County, our new headquarters will support our growth as we continue to acquire new university partners, launch new programs and empower the world’s greatest universities as they build great digital versions of themselves.”
The agreement keeping 2U in New Carrollton gives the county a tech company on which to hang its hat and advances efforts by County Executive Rushern L. Baker III to grow jobs around Metro stations and transit hubs. At New Carrollton, the state recently opened a new office for the Department of Housing and Community Development, and a new apartment building is slated to break ground next door this year.
Baker (D) said in an interview Tuesday that 2U wanted access to both Washington and New York; New Carrollton has an Orange Line Metro station, a MARC Train station and an Amtrak station.
“To have this exploding university [company] located in one of our Metro sites is really the big deal here,” Baker said. “Because we’ve talked all along about growing our commercial job base but also expanding our Metro sites, which is smart growth.”
Early in his administration Baker created a economic development incentive fund to keep and attract companies, such as homebuilder Bozzuto Group. Baker and Maryland Gov. Larry Hogan (R) are also teaming with members of Congress to try to attract the FBI headquarters and a U.S. Dept. of Homeland Security unit to locations in Prince George’s.
“Working with 2U and our partners in Prince George’s County, we are proud to support this innovative company’s new headquarters and the creation of hundreds of new jobs,” Hogan in a statement Tuesday. “Thanks to visionary companies like 2U, we are continuing to see the creation of exciting job opportunities throughout Maryland – opportunities which are helping to strengthen our private sector and provide a healthy, thriving economy for all Marylanders.”
That 2U was willing to occupy 7900 Harkins Road in Lanham solves another issue for the county: the emptying of one of its largest office buildings. The 325,000-square-foot building was home to government contractor CSC for 15 years but the company shed hundreds of jobs in Prince George’s and vacated the building once a large contract was discontinued.
Once assessed by the county at $68 million, the building’s value plummeted — along with other suburban office buildings in the region — until it sold at auction last year for just $20.3 million, barely a third of what the building was worth eight years prior.
With expected increases in the property’s value, the county expects to get its money back in less than two years said David Iannucci, a top economic development aide to Baker. The new owner is Cohen Equities, of New York.
“When that building became vacant quite honestly I think a lot of people said Prince George’s was in trouble,” Baker said.