State, counties strategize to land Northrop Grumman HQ
Military contractor to move corporate offices to D.C. region
Government officials throughout the region have been ramping up their strategies to land the new headquarters of Northrop Grumman, after the military contractor said Monday it plans to move its executive offices from Los Angeles to the Washington, D.C., region, where it already has a significant presence.
The effort promises to be tinged with a little more edge in Montgomery County, as it was just a little more than a year ago that Hilton Hotels, after reportedly considering several areas including Montgomery decided to move its headquarters from California to Northern Virginia.
While state officials such Christian S. Johansson, secretary of the Department of Business and Economic Development, would not single out one jurisdiction the state favors for Northrop Grumman, Montgomery County officials vowed to do their best to land the company's headquarters, along with its expected 300 workers.
"We'll be very aggressive in trying to get them to join Lockheed Martin" in Montgomery, said Steven A. Silverman, the county's economic development director. Rival Lockheed Martin's headquarters are in Bethesda.
"We have reached out to them and I expect we will be talking to the state [officials] about putting together an aggressive plan," Silverman said. "One of the things we have to find out from Northrop Grumman is what their requirements are ... do they want to buy or lease, things like that."
Montgomery County Councilman Michael J. Knapp (D-Dist. 2) of Germantown, when asked if there were still unhappy feelings in the county about losing Hilton a year ago, replied: "I think so. At that time, people said the CEO was living in Virginia and we never had a chance there. But if you are going to play, you have to play to win. We need to show we're willing to compete."
Still, with tight budgets, "I don't believe we should chase every opportunity and throw dollars around," Knapp said.
"But I think when they fit within our strategic priority areas and in Montgomery, you can say life sciences and technology is what we do I think it's important. ... That makes that a priority," he said.
Northrop Grumman is the seventh-largest private employer in Maryland with 10,830 employees, according to a survey by the state Department of Business and Economic Development in October. Most of Northrop's state work force is concentrated in Anne Arundel County, where 8,000 people are employed, many in Linthicum, with other locations around the state.
The company said it plans to complete the search for a location by the spring and open its new corporate office by summer 2011.
"As a global security company with a large customer base in the Washington, D.C. region, this move will enable us to better serve our nation and customers," said Wes Bush, Northrop Grumman president and CEO, in the statement.
State has compelling case'
"What I can tell you is we think we have a compelling case to make to Northrop, and there are strong reasons why," Johansson said.
"We look at them and they already have a significant presence in the state, with 11,000 people [including offices in Linthicum, Montgomery and Seabrook], and so they know us well we are not an unknown commodity; they have a track record of working with us as a successful state," he said. "Second, Maryland has one of strongest clusters when it comes to aerospace and defense companies, a very strong point. Sixteen of the top 25 companies are in Maryland."
Johansson said this week that Gov. Martin O'Malley (D) would be calling Northrop's CEO personally, adding, "We are approaching this as a team, trying to make the best possible case for Maryland."
Asked if any specific Maryland jurisdiction would be promoted to land Northrop Grumman, Johansson said, "The first thing for us to really know is their requirements and what is going to make the best business case for them and then we will be talking to jurisdictions that meet those requirements. We have already reached out to those jurisdictions that we think, in advance, present the best case for meeting those requirements."
Knapp said incentives could likely total "hundreds" of thousands of dollars.
"Remember," he said, "in Northern Virginia they have a lot of vacant space there and you could have property owners willing to forgo a couple of years of lease payments because they have that excess supply, so you have to factor that in. We would probably have to put more money on the table to compete in that kind of situation."
Others believe their jurisdictions would be a good fit for Northrop Grumman, too.
Kwasi G. Holman, president and CEO of the Prince George's Economic Development Corp., said, "Prince George's county is ideally situated, given its proximity to the District of Columbia, its many development projects and available land, excellent transportation system, highly educated work force and business-friendly climate. We look forward to working with the state to attract Northrop Grumman to Prince George's County."
Farther north, a Frederick official pitched his city.
"We are in the running as much as anyone," said Richard G. Griffin, Frederick's director of economic development. Griffin pointed out that he has not been contacted by Northrop Grumman officials but said he is still submitting sites for consideration, adding that "I feel Frederick would be an ideal location."
Dereck E. Davis, chairman of the House Economic Matters Committee, said he intends to speak with Johansson about what the state can do legislatively or otherwise to attract Northrop Grumman.
"I want to put together, if we can, a responsible package, not just a big corporate giveaway," said Davis (D-Dist. 25) of Upper Marlboro.
House Speaker Michael E. Busch (D-Dist. 30) of Annapolis sees the fight for Northrop Grumman as a competition between Maryland and Virginia. He said he will wait to see what kind of package DBED offers, adding that it could be that the state's current programs are enough to attract the headquarters, or the state might need to enhance the offer.
For his part, Northrop Grumman spokesman Dan McClain was non-committal.
"Our primary focus is on proximity to our customers, which include the Pentagon and numerous other federal agencies," McClain said. "Given that priority, we have not ruled out any particular county or region."
Northern Virginia looms
Some published reports indicate Northrop Grumman may already be leaning to Northern Virginia, partly because many of its customers, including the Pentagon, are there. Silverman said he didn't believe anything was a given at this point.
"No, I don't think it's a sure thing they are going to Northern Virginia," Silverman said. "We expect to be very competitive in this."
Having company units already in Reston and Herndon, Va., Fairfax County might have an edge. But Alan Fogg, spokesman for the Fairfax County Economic Development Authority, would only say, "Unfortunately, I cannot say anything about Northrop Grumman. We do not talk about prospect situations."