Fenty and City Council Give Military Contractor A Home in DC!!

Northrop Grumman Corp. would receive $25 million in incentives to relocate its headquarters to D.C. under a bill introduced Tuesday by four members of the D.C. Council.

The “Global Security and Aerospace Industry Tax Abatement Act of 2010” would provide $19.5 million in real estate tax breaks over 10 years and up to $5.5 million in grants to offset relocation costs the company could incur in its planned move from Los Angeles.

The bill is sponsored by Councilman Jack Evans, D-Ward 2, along with six other of the city’s 13 council members. Evans said the bill “sends a clear message to Northrop Grumman that we are absolutely interested in having them as one of our corporate citizens.”

He said if the city can provide a comparable financial package to the suburbs then he believes D.C. has a chance to land the company because of its proximity to the Capitol, White House and Pentagon.

The legislation will likely take a month or more to complete. Its real property tax abatement would apply either to a lease or purchase, and the grant would pay for a wide range of relocation costs, including those for predevelopment services (such as architecture and engineering for a build-out), tenant improvements, furniture, equipment, technological upgrades, construction and any other relocation costs approved by the mayor.

All the subsidies are subject to inclusion in the city’s budget, which would add to hundreds of millions of dollars of budget gaps already expected in the coming years.

The bill also comes with a number of requirements. To receive the subsidies, Northrop would need to remain in the city for 10 years; move by March 31, 2012; employ a minimum of 250 people in the District and contract with certified small, local or disadvantaged companies for 20 percent of the company’s build-out.

It would be able to move to most parts of downtown, but the bill also paves the way for a move to two specific properties that are part of a public-private Southwest office development in which D.C. Mayor Adrian Fenty selected E Street Development LLC — a team of five developers — to build two office buildings and a new fire station in Southwest, a project totaling $193 million. Under a deal passed by the D.C. Council, the developers will provide the city with an upfront ground lease payment of $2.5 million and could begin construction later this year.

Northrop has reportedly been considering properties in D.C., Crystal City and Montgomery and Fairfax counties. Evans took a shot at the competition, saying, “Can you imagine them locating in a place like Crystal City? Oh my gosh.”

Fenty has said his administration will do whatever it can to lure Northrop’s headquarters and an expected 100 to 150 new jobs to the area. His deputy mayor for planning and economic development, Valerie Santos, says she was “working very aggressively” to assemble a package for the company that would beat those being offered in Maryland and Virginia.

Santos said the District “specifically is well-positioned for people who need easy access to the Pentagon, the CIA and other defense agencies.”

Other co-sponsors on the legislation include Chairman Vincent Gray, D-At large, David Catania, I-At large, Kwame Brown, D-At large, Muriel Bowser, D-Ward 4, Mary Cheh, D-Ward 3, and Marion Barry, D-Ward 8.

Article by Jonathan O'Connell
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