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Area Development - Site Selection, Facility Planning and Workforce Development

Incentives Play Big Part in Northrop Grumman's Location Choice

05/04/2010
In the end the decision of where Northrop Grumman would relocate its headquarters came down to state tax credits, financial incentives and programs.

Virginia won the battle for the defense contractor's location after 100 days of intense competitive bidding from Maryland and the District of Columbia.

According to the  Baltimore Sun, Maryland and Montgomery County economic development officials offered Northrop Grumman $22.5 million in incentives.

But that wasn't enough or exactly what Northrop Grumman wanted apparently as it chose to go with Virgina's $14 million in incentives and an "undisclosed local incentives" package.

"We are pleased to have identified Virginia as the home for our new corporate office. Virginia, Maryland and the District put forward compelling, competitive offers. Our final decision was driven largely by facility considerations, proximity to our customers, and overall economics," said Wes Bush, chief executive officer and president, in the Baltimore Sun news report.

Northrop Grumman expects to initiate operations in the new corporate office in summer of 2011 with approximately 300 staff. It currently employs approximately 40,000 people in Maryland, Virginia and Washington, D.C. and is the largest industrial employer in both states.

The global company has 120,000 employees providing systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.

According to the newspaper the state's offer to Grumman bests past incentive efforts to gain businesses. Virginia gave $4.6 million given to Hilton Worldwide and $8.5 million given to Science Applications International in recent years. State officials say Northrop could bring $30 million to the state in tax revenue over the next decade.

Now Northrop Grumman is busy negotiating a deal with building owners in several areas of Virginia. The two top choices are the Fairview Park office complex in Falls Church and an office building on North Glebe Road in Arlington County.

The Sun reported that Northrop Grumman Chief Executive Wes Bush stated the decision would come down to which building site offered the best "economics."

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