Area Suburbs Fight For Economic Growth

Before Washington can become a strong business center, someone has to follow a leader

The Greater Washington Board of Trade's new campaign to create a global business image for the capital region faces its first challenge in its own backyard.

Economic growth experts say if the Greater Washington Initiative public relations crusade is going to work, the project's participants must learn to think regionally -- that means putting Washington's interests ahead of their own towns. However, in the Washington region there has historically been intense competition between the surrounding areas to lure businesses -- particularly high-tech -- to locate or expand within their borders.

"There's a lot of competition between the suburban regions of Washington, D.C.," said Dave Gillece, vice president in the consulting group at Baltimore-based Colliers Pinkard, a commercial real estate firm. And that doesn't help the region's image. Gillece tells the story of a former client who was shocked "by the way the regions sell against each other."

The client planned to build a facility in the Baltimore-Washington region about two years ago and was considering several sites in Baltimore and Northern Virginia. While visiting with economic development leaders in a suburban Virginia county, someone in the office handed her a newspaper article that described a terrible business atmosphere in Montgomery County, Md.

"She wasn't even considering that part of Maryland," Gillece said. But that experience left a bad taste in the client's mouth about the region's business practices, he said.

"It's one thing to market yourself as a good place to do business, but its another to bad-mouth another region," said Roger Stough, director of regional analysis at George Mason University's Institute of Public Policy in Fairfax. Mudslinging is destructive to the whole region's reputation, he said.

The strong competition between Washington's counties does not just flare when the subregions try to attract new business; there's even strong rivalry when a local company decides to expand. When the not-for-profit organization American Type Culture Collection in Rockville, Md., decided it needed a bigger bio-science facility but wanted to stay within 45 miles of Washington, the proposals poured in from Maryland and Virginia counties.

Competition to attract the $20 million ATCC was especially high because it's an environmentally safe, growing company that acts as a resource for start-up biotechnology companies. Virginia "put tremendous effort into getting the ATCC," said the company's CEO Raymond Cypess, because part of Virginia's economic development strategy is to establish its own biotechnology industry to rival the one that has grown up in Maryland. Virginia's courting efforts paid off.

The 230-employee company plans to move to Prince William County, Va., and the incentive package that includes an agreement with the higher education consortium of Virginia to create a bio-science research center at George Mason University, helped lock in the deal. Northern Virginia planners hope this center and the ATCC will spark a new cluster of biotechnology business for their region. For Maryland, which already has about 200 biotechnology firms in its borders, the loss of the ATCC comes as a blow just as the state's new $160 million national center for marine biotechnology research is getting off the ground.

But while the rivalry between the subregions of Washington is sometimes fierce, it's certainly not as bad as the destructive competition that goes on in some other cities, said Mitch Horowitz, who until recently was working in Maryland's economic development office and is now a vice president with Rockville, Md.-based infotech consultants Capital Systems Group. Horowitz, who's worked on economic growth in several states, said competition in the New York region is especially brutal. "New Jersey is raiding New York City. I'd bet New Jersey economic developers spend more of their time in New York than in New Jersey," he said.

The contest to attract business in the Washington region may not be as extreme as in New York, but for companies that have decided to plant a business in the capital area, they have an abundance of choices. The company's decision of exactly where to site the facility is complicated by having to examine and analyze the business characteristics of two states and an independent city, said Gillece.

"Selecting a site within the Washington metro region is about 90 times more complicated than in other cities," he said. If, for instance, a company decides to settle in Boston, with the exception of local taxes, the firm will face essentially the same business conditions whether they decide on Cambridge, Waltham or any other Boston section. But in Washington, executives have to figure out if their business will prosper better under the tax codes and corporate culture of Virginia, Maryland or the District of Columbia.

Certain types of companies may be led to particular sections of the Washington region because similar firms have located there. For instance, information technology companies may gravitate toward Northern Virginia because of the large cluster of such companies in the area. Many companies will also locate in a particular part of Washington to be closest to the federal customers that they want to serve. In Montgomery County many medical-related technology companies have flocked to be near the Food and Drug Administration and the National Institutes of Health.

But as the region's business community matures and becomes less dependent on selling to federal customers, Gillece expects the playing field among Washington's suburbs to be essentially equal for any type of company looking for a new home. That's why it's especially important for the different subregions of Washington to work together to promote Washington's business image as a whole, he said.

"We're not working together, but we should be," Gillece said. He hopes the Board of Trade can convince each of Washington's interests that in the long term, communities will benefit from any and all companies that decide to expand or build new facilities in the area. But, he adds, this change of thinking won't come overnight.

Projects such as the Greater Washington Initiative, which has members from several area technology councils, will help break down the communications barriers between the subregions of Washington, Stough said. "Then over time a better relationship will develop," he said.


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