Submarkets Go to New Lengths (and Locales) to Compete

FAIRFAX, VA-Fairfax County's Economic Development Authority is opening a new office in Boston – or to be more precise, it has picked Rasky Baerlein Strategic Communications to run its new marketing efforts in the area. What will it be marketing? Fairfax, of course, and its charms as a business location.

This is the second office in the US the EDA has opened, and given its criteria (more on that in a moment) it probably will be a while before another is opened, according to Gerald L. Gordon, president and CEO of the EDA. Still, its presence in Boston is indicative of a trend that is becoming more and more apparent in the DC area – highly competitive submarkets that are aggressively wooing businesses to their jurisdictions. To be sure such competition has been the hallmark of states and regions and countries. What is new is how hyper local it is becoming.

"This is a trend we identified in our Trendlines 2013 report," Delta Associates president Greg Leisch tells GlobeSt.com.

This hyper competitiveness can be seen in relatively small developments such as the increasing number of BIDs in the District. There are currently 10, but the Southwest District is discussing forming one, Leisch says. If it does, that will be 11 BIDs within the District.

The more aggressive moves are being made by the EDAs, such as the Fairfax's. "Support of these EDAs means investing more resources into fighting for new jobs and projects," the Trendlines report says. "Most major economic development agencies in the region experienced budget increases during the 2006-11 despite the intervening recession that forced budget cuts in most other discretionary developments."

According to figures compiled by Delta Associates, Fairfax County's budget grew 9% from 2006 to 2011 to $7 million; Arlington's grew 19% over the same time period to reach $3.1 million; Prince William County's by 5% to reach $2 million and the City of Alexandria a whopping 100% to reach $1.4 million. The only county whose EDA budget declined over this time period was Montgomery County, which dropped by 19% for a budget of $8.3 million in 2011.

Fairfax County may have one of the largest budgets in the area but it is still conservative in how it spends its money. The decision to open a front in Boston was made carefully, Gordon tells GlobeSt.com. "If we are going to spend this kind of money we expect to have a more than a one-to-one return," he says.

It decided Boston was the worth the investment – an amount Gordon says is between $50,000 to $60,000 – because the two cities have companies in similar industry segments such as technology. Not only that, but these companies must have business plans and financing to expand, he adds. "Also these cities have to have a critical mass of companies that satisfy these requirements. It wouldn't make sense to go to cities that have only a handful of companies."

Boston is the only area that Fairfax sees as meeting this list, in addition to southern California. Overseas, the EDA has offices in Seoul, London, Munich, Tel Aviv and Bangalore.