Open for Business

The Fairfax County Economic Development Authority tries to woo Silicon Valley companies to Virginia.

by / December 1, 2006 0

Fairfax County, Va., got religion during the early 1980s when it came to enticing employers into what is now an affluent suburban enclave of the Washington, D.C., area.

A key factor in that ascent was the Fairfax County Economic Development Authority (FCEDA), a 42-person government organization charged with drawing businesses to the county. To do that, FCEDA employees specialize in different business fields and befriend global and domestic companies in those sectors.

The organization maintains external offices in London; Bangalore, India; Frankfurt, Germany; Seoul, South Korea; and Tel Aviv-Yafo, Israel. In July 2005, the FCEDA expanded its reach in the technology market by establishing its first U.S. external office in Silicon Valley.

Getting Techies
Technology firms currently account for 4,900 of Fairfax County's 29,995 payroll establishments, according to the FCEDA, and technology workers fill 119,000 of the county's 564,520 jobs.

The FCEDA aims to increase those numbers with its new Silicon Valley office run by Leo Campbell, a local professional hired to pitch the value of expanding to Fairfax County.

"We continue to travel periodically from Virginia to all these markets, but the fact is you can't go to a market occasionally," said Gerald Gordon, president of the FCEDA. "This is a relationship-building business. You have to have somebody who's there, meets people at chamber meetings, bumps into them on the golf course, visits their company, establishes relationships, so that when that businessman or -woman decides they need an East Coast location, or is ready to expand, Fairfax County is on their mind."

Gordon said he wanted to establish a physical presence in Silicon Valley for years but hesitated, fearing charges of stealing companies from California. However, he said, California officials are now more receptive to the idea that expanding to Fairfax makes California companies more competitive in the federal contracting market.

"When we sat down in Palo Alto, [Calif.], we had some conversations with elected officials telling them we're not coming to steal companies; we're coming to offer them expansion opportunities that will bring money back to California so everybody wins," Gordon said. "In fact, we have Fairfax companies that probably want access to the West Coast markets. We can make this a two-way street."

The FCEDA started talking with Silicon Valley companies a few years ago when defense spending surged. Gordon said he expects the recent increase in homeland security contracts and the FCEDA's new California presence to further pique those companies' interest in Fairfax County.

New Kids on the Block
Tom Patterson, CEO of Command Information, a firm offering Internet protocol version 6 (IPv6)-related services, established the company in Fairfax County in 2005. The FCEDA played a significant role in that decision by assisting Patterson and his growing team in becoming Washington, D.C.-savvy.

"They introduced us to the local political scene, helped us figure out who our congresspeople were," Patterson said. "They helped us arrange to have [Virginia Gov. Tim Kaine] come out and do a ribbon cutting on our new training center a month or so ago. They've really been terrific."

After six months of networking at every Washington cocktail party that Command Information executives could fit into their schedules, they announced the company and started business in January 2005. Command Information, which made $50 million in its first year of operation, runs two locations in Fairfax County employing roughly 300 people. "We're trying to hire a person a day," Patterson said.

The FCEDA introduced Patterson to the dean of the engineering department at George Mason University in Fairfax where the company is now recruiting employees.

"I knew George Mason got to the final four," Patterson said. "I had no idea they had such a great engineering department. To be able to just walk in at the top and have the casual conversation that Fairfax County facilitated was terrific."

Recent graduates of northern Virginia colleges form roughly 25 percent of his staff, Patterson said.

"We just hired a woman this morning from George Mason who's attending its graduate school at night, and who's coming in to work in our labs doing research and development on an IPv6 project for the U.S. Army," he said.

Patterson said the company recently opened a London office, and the FCEDA offered the services of its London representative to help Command Information make contacts in England.

"It's working both ways. They've got a program next month in London to show us off to other UK companies that might want to come here for the same reason we did," Patterson said. "We're happy to help those that help us."

Camero Inc., a new Israel-based company that sells a radar system that images through walls, established a Fairfax office in October 2006. Robert Judd, president of the company, said he first interacted with an FCEDA representative who was networking in Israel.

"They've introduced us to services and support people in the area -- anywhere from public relations capabilities to people who helped us with office remodeling," he added.

Judd said his company recently started shipping products to three countries he couldn't disclose.

Where It's At
Fairfax County currently boasts the highest median family income in the United States at $90,194 per year. But that doesn't immediately translate to tax revenue increases.

Northern Virginia local governments don't have the authority to charge an income tax, so funding for county governments rests on the back of local property taxes. In 1976, the FCEDA established a strategy to aggressively seek businesses to fill empty office space in Fairfax County. Commercial growth stimulated hunger for increased office construction, rocketing property tax revenue.

In 1983, when Gordon arrived at the FCEDA, businesses occupied roughly 20 million square feet of office space in the county. Now, he said, that number is 104 million square feet.

The vacancy rate for office space in Fairfax County currently is 7.4 percent, according to Gordon, who added that developers typically build more office space when that number drops to 5 percent or 6 percent.

Currently 18 of the nation's top 20 federal contractors reside in Fairfax County, he said. Although they initially drove much of the county's economic climb, the private sector is gaining ground.

"Many of the protocols for the Internet were done here. The two gentlemen credited by President Clinton -- neither of whom was Al Gore -- as being the fathers of the Internet, Bob Kahn and Vinton Cerf, did their work and still work here in Fairfax," Gordon said. "As a consequence, AOL, UUNet, PSI Net, Network Solutions, all those companies were founded here, and they're still headquartered in northern Virginia."

Fairfax County is a critical hub for IT and telecom firms, said Gordon. "There are more IT workers in Fairfax County than there are in Silicon Valley. It is partly the federal government that's generating this, directly and indirectly, but also a large element in private sector."

He said the county's top-rated public school system, its proximity to Dulles Airport and its ethnically diverse population attract business investment to Fairfax County.

"We have people from around the world. That makes it interesting," Gordon said. "The median individual education level in Fairfax is over 16 years. The average person has a college degree."

The FCEDA runs on a $7 million budget, which is more than most government economic development organizations, Gordon said, adding that the other 23 economic development offices in the Washington, D.C., area have budgets of less than $1 million.

Only time will tell how much revenue the FCEDA's Silicon Valley representative brings to Fairfax County. The organization's presence in Seoul currently attracts the most business migration to the county of all the external offices, said Gordon.

A dramatic increase in foreign-owned companies operating in Fairfax County proves the worth of the FCEDA's global offices, he said. Just 24 such companies had offices in Fairfax County in 1997, when the FCEDA created its first overseas representative position.

"Today we have 358 -- in less than a decade," Gordon said. "Were we fully responsible for that? No. Were we partially responsible? Yes."
Andy Opsahl

Andy Opsahl is a former staff writer and features editor for Government Technology magazine.