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HERNDON, VA-Volkswagen of America, the wholly owned subsidiary of automaker Volkswagen AG, will be transitioning its Auburn Hills, MI-based US headquarters operations here during the next several months. The move to the newly completed $100-million, 185,000-sf building–which was a closely held secret for close to a year–will result in 400 new jobs for Northern Virginia, either as new hires or relocated employees. Company offices in Oakland County, MI will retain about 600 of the 1,400 current staff; another 400 positions will be eliminated altogether.

Volkswagen will have its Northern Virginia staff fully in place in its newly leased digs by the end of 2008. Besides the US headquarters for Volkswagen of America Inc, it will also include the US headquarters for Audi of America Inc., Audi Financial Services, Volkswagen Credit and other affiliated operations.

The building, called Woodland Pointe, is owned by Tishman Speyer. A six-story office building in the Woodland Park mixed-use business complex, it is very close to Dulles International Airport and visible along the Dulles Toll Road–two factors that the company weighed as it made its decision, according to Keith Scott, a vice president with the Staubach Co., which represented the company in its search. Scott tells GlobeSt.com that the building finished construction in July. The total cost of development, including interior build-out to accommodate Volkswagen, is $100 million. Woodland Park is a corporate, retail, and residential complex that will encompass more than five million sf when fully developed.

However, as with most site selection decisions now, the real estate piece plays only a minor part. “It is a real estate project but it is not about real estate in the end,” Greg Lubar, senior vice president for the Staubach Co. tells GlobeSt.com.

“There were a number of factors that went into this decision,” he adds. “These included labor, the incentives the state and local government could offer, transportation, infrastructure, the proximity to clients and an international airport, education and training opportunities,” he tells GlobeSt.com. Volkswagen received $6 million in performance based cash-grants as part of the state incentive package.

Indeed, the decision to shift operations here is a major coup for the state; in general, direct investments from automotive manufacturers are eagerly sought and bitterly competed for among states because of the additional investment that usually follows from third-party suppliers and sometimes even the manufacturer.

“Volkswagen’s decision for Virginia is a strong affirmation of the Commonwealth’s business-friendly environment, location, market access and infrastructure,” says Gov. Timothy Kaine in a statement. “The caliber of companies already located in the region and the proximity to Dulles International Airport were huge factors in the company’s decision.”

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