Tysons Corner, VA

Funding for two positions to help alleviate two very different crises in Vienna was salvaged by last-minute savings.

Digging around the proverbial sofa to find extra funds for previously unfunded priorities is a time-honored local budget tradition. In Vienna, that took the form of $400,000 recovered from transferring repaving to a cheaper system and changes in the town’s health insurance structure.

In response, Town Manager Mercury Payton proposed $383,000 worth of items that were not funded in the budget that could be financed by the found-funds in the final budget.

The largest item among the unfunded priorities was $144,600 for an economic development manager — a long-discussed idea in Vienna.

Despite more businesses opening than closing in the town, Vienna is still struggling with rampant closures from small businesses. The manager would help assess problems facing local business and develop strategies to help keep businesses in town. Vienna is currently the only locality in Northern Virginia without a person working specifically in an economic development role.

The list of unfunded priorities also includes $50,000 for an economic development and market study.

The other crisis addressed in the list of priorities is handling the town’s massive wave of tree deaths. Over the last few years, every ash tree in Vienna has been killed by the Emerald Ash Borer, an invasive parasite that’s devastated North America’s ash tree population.

But the town is also dealing with the still-unsolved mystery of what is killing the town’s Norway maples. The death tally reached 30 earlier this year, and Town Arborist Gary Lawrence said the killings were so similar to the Emerald Ash Borer deaths that at first the deaths were mistaken for that infestation.

The list of unfunded priorities includes $69,364 for an assistant arborist and $20,000 to help handle tree maintenance.

A public hearing on the tax rate is planned for April 29 and adoption of the budget is scheduled for May 13.

File photo

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Despite a large number of vacancies on Maple Avenue and some recent high profile closures, the Town of Vienna’s Finance Department says twice as many businesses are opening in the town compared to those closing.

Last year, 115 businesses opened and 65 closed, the finance department said, in response to an inquiry from Tysons Reporter.

It’s an optimistic note for a town that, economically, could really use a win.

Last year, Vienna’s commercial vacancy rate was 13 percent. Of the town’s 1,095 commercial properties, 138 were vacant and 68 were on Maple Avenue, according to InsideNova.

But it’s businesses off of Maple Avenue that are being hit the hardest by increasing rents and declining sales. Peggy James, executive director of the Vienna Business Association, said a combination of increasing rents and limited parking availability are making it hard for local businesses to stay afloat.

The Town is taking some steps to make commercial businesses in Vienna more viable, including a plan in the town budget to hire a full-time economic development consultant to focus specifically on ways to make life easier for businesses. Vienna is currently the only Northern Virginia locality without staff tasked specifically with economic development.

In the meantime, here’s a look at some of the more recent businesses to open in Vienna:

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Fairfax County is planning to include McLean in a new targeted economic revitalization plan.

The proposed Economic Revitalization and Redevelopment Zones (ERRZs) would allow developers a 5-10 percent fee reduction for site plan reviews and a partial real estate tax abatement for properties consistent with the county’s Comprehensive Plan. A staff report noted that developments approved through the ERRZ pipeline could also see expedited processing.

The plan is the result of legislation passed by the Virginia General Assembly in 2017 that allowed regulatory flexibility and financial incentives to encourage private sector growth.

“An inter-departmental team developed and vetted with industry a proposal for a program in Fairfax County to provide an economic development opportunity to the private sector consistent with the legislation,” Fairfax County staff said in the report.

In order to qualify for the program, developments would need to have two parcels that collectively comprise at least two acres in size. Smaller acreages could be considered with Board of Supervisors review.

The ERRZs would be located in the Commercial Revitalization Districts first established in 2004.

In addition to McLean, new ERRZs would be established in:

  • Annandale
  • Baileys Crossroads
  • Springfield
  • Lake Anne Village Center
  • Richmond Highway Business Centers
  • The Huntington Transit Station Area
  • The Lincolnia Community Business Center
  • Franconia-Springfield Transit Station Area

At tomorrow’s (Tuesday) Board of Supervisors meeting, the scheduling of a public hearing for the ERRZ ordinance is included in the items scheduled for administrative approval. If approved, a public hearing would be scheduled for April 9. If adopted, the changes would take effect on Jan. 1, 2020 and would last until Dec. 31, 2029.

Photo via Fairfax County

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Morning Notes

FCPS on Two-Hour Delay — Fairfax County Public Schools are opening today on a two-hour delay due to dangerous cold and potentially hazardous travel on local roads. [Reston Now]

Metro Delays This Morning — Expect some delays if riding Metrorail this morning, in part due to fewer trains running amid the bitter cold. [Twitter]

Vienna Businesses Want More Economic Development — “Vienna’s business environment flourished in 2017 but weakened noticeably last year, highlighting the town’s need to hire a specialist to improve its commercial prospects, according to the 2018 annual report submitted by the Town/Business Liaison Committee (TBLC).” [InsideNova]

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Morning Notes

Video: Students Brawl at McLean McDonald’s — Cell phone video shows dozens of students from McLean and Langley high schools brawling in the McDonald’s at the corner of Old Dominion Drive and Dolley Madison Blvd. No one was reported injured from the fracas, which happened Friday night after a basketball game between the two rival schools. [Fox 5]

McLean Community Center Closing Early — In addition to the early dismissal for Fairfax County Public Schools, other weather-related early closings are being announced today. Among them: the McLean Community Center is cancelling all classes that begin at or after 1 p.m. [Twitter]

Fairfax No. 2 on Va. Net Worth Rankings — “Fairfax County is ranked #2 in a SmartAsset study showing the top 10 Virginia counties with the highest net worths. Despite having the highest per capita income on the list, Loudoun County came in only at #7 due to also carrying a significantly higher per capita debt burden, also the highest on the list.” [Fairfax Times]

Potomac School Student is Top Science Talent — “Carolyn Beaumont, a senior at the Potomac School, has been named a Top 40 Finalist in the 78th Regeneron Science Talent Search, the nation’s oldest and most prestigious science and mathematics competition for high-school seniors.” [InsideNova]

FCEDA Touts New Businesses, Jobs — “In 2018, the Fairfax County Economic Development Authority (FCEDA) worked with 143 businesses that announced the addition of more than 8,900 jobs to the Fairfax County economy.” [Fairfax County EDA]

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The cost of living in Tysons is high — most of the new residential developments around Tysons advertise their new living units as “luxury” — and there’s a good reason why.

And as developers fight over the last few pieces of prime real estate near Metro stations, some are admitting that the cost of setting up shop in Tysons is unlikely to go down anytime soon.

At Bisnow’s Tysons State of the Market event yesterday (Thursday) at 1600 Tysons Boulevard, developers met to discuss the challenges and opportunities facing the region over the next few years.

“Costs have risen,” said Gary Block, chief investment officer for the Meridian Group, developers of The Boro. “It’s tough to underwrite new residential development today. Rents have to be very high to justify development.”

One of the biggest drivers of cost in Tysons is also one of the biggest draws: nearly unlimited density. Speakers at the State of the Market event said a high capacity for density means developers are looking to get more out of each plot of land, which means building up, and that means using more expensive steel frames rather than wooden frames.

“Wood frame is an option,” said Jim Policaro, senior vice president of Lerner. “But you’re giving up potential density. You’re going to have more noise issues with wood frame construction, but the net effect is rent that might be slightly lower. If you’re willing to give up some density and sacrifice the height you can get, it’s definitely a viable option.”

But the market for residential development in Tysons is focused on areas near Metro, areas where density is king.

“Residential coming into the market is driven by density, “said Mark Carrol, executive vice president of Skanska Commercial Development. “These locations are within walking distance of the Metro.”

Developers said a boosted demand for higher-end residential development will likely be one of the main impacts of the new Amazon headquarters in Arlington.

“Not everyone can live in Arlington, or wants to,” said Policaro. “Employees who are married with children might see Tysons as a laudable option for residential.”

Carrol added that from a cost perspective, developers have seen an escalation of almost 7 percent in this market. If there are residential developments that are more affordable than the new luxury developments, they will have to be in places further away from Metro access.

“Those further away from the Metro are going to have to make certain changes and accept the fact that their rent streams are going to be significantly lower,” said Brian Tucker, managing director for JLL.

As for who is moving into these high-end residential developments, Bob Kettler, founder and CEO of Kettler, said half of the people moving into condominiums in the area are “empty nesters” — older couples whose children have left their home. The other half is split between professional couples and affluent single professionals.

Kettler also noted that the demand is still very present for high-end residential, with prices on units moving up three times over the last four months.

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Things are getting better for Tysons’ economy, but slowly.

For offices around Tysons, the boom anticipated with the opening of the Metro in 2014 has been more of a trickle as growth continues at a more sluggish pace than initially anticipated.

The Office Submarket Report on Tysons Corner (their wording, not ours) by Ryan Rauner, an associate broker with Realty Markets, shows a market experiencing steady, if unremarkable, growth.

“Despite slow demand growth at the metro level, some has trickled down to Tysons, helping vacancies improve slightly over the past few years,” the report said. “An explosion in the residential population has not yet been matched by strong office-demand growth, despite four Metro stations opening in the submarket.”

While the expansion of the Capital One facility was a welcome boon, the report notes that most tenants are not actively expanding their footprint and there has been a spate of large move-outs, specifically pointing to public affairs consulting group Interel’s decision to leave Tysons for Washington D.C.’s East End Submarket.

Which isn’t to say there haven’t been plenty of new clients coming into Tysons. Apian announced in April it would be moving to Tysons while Cvent announced it would be expanding its local offices. Facebook is also reportedly looking for space at Tysons II to occupy between 75,000-85,000 square feet.

In 2015, office vacancies in Tysons were near 18 percent. Since then, vacancies have steadily fallen to 15.6 percent. Forecasts for the market show vacancies taking a dip in middle-2019 then continuing a steady decline.

The high supply of office and relatively low demand led office rents in Tysons to face a steep decline from 2012-2014. There’s been some growth there, averaging about 2 percent from 2015-2018, but the report also warned not to view that growth as a trend.

“High vacancies could continue weighing on growth,” the report said. “Rents have continued their increase this year but at a relatively slow pace — as of early December, rents had increased by roughly 2 percent for the year. At the metro level, rents surpassed their pre-recession peak in 2015, but those in [Tysons] are just now reaching that point.”

The report did note that Tysons isn’t alone in its lackluster rent growth, that several other locations across Fairfax have also faced similar low rents.

None of this has slowed construction, however. There was 1.2 million square feet of new office space created between 2014-2017. Last year also saw a record high of office space opening with Capital One’s 975,000 square foot expansion.

The report notes that there are two notable projects underway: The Boro and View at Tysons.

The Boro is anticipated to include 582,000 square feet of new office space. Boro Tower, the main office component of the project, is currently 70 percent pre-leased and is expected to be ready sometime this year.

The View at Tysons is further out in development but is expected to include 570,000 square feet of office space and the region’s tallest building as part of a 2.8 million-square-foot mixed-use development.

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Morning Notes

Fairfax County’s Big Job Adds — “Fairfax County’s Economic Development Authority worked with 164 companies in calendar year 2017 to add, eventually, nearly 8,200 jobs. Three announcements, including a doozy from Amazon Web Services, accounted for 70 percent of that total… The Transportation Security Administration’s 2020 relocation from Pentagon City to Springfield: 3,000 jobs. AWS’ East Coast hub in Herndon: 1,500 jobs. And Favor TechConsulting, a Tysons-based minority-owned and service-disabled veteran-owned government contractor: 1,200 jobs.” [Washington Business Journal]

What’s Closed for New Year — “Fairfax County offices will be closed Tuesday, Jan. 1, 2019, while schools, parks and other services will be closed Dec. 31 and Jan. 1. Some services like transit will be during New Year’s Eve events. Services will resume Tuesday, Jan. 2 unless noted.” [Patch]

Flood Watch in Effect — Expect periods of rain today. The National Weather Service has issued a Flood Watch for much of the region through late tonight. “Excessive runoff from already saturated soils will cause the potential for streams and creeks to rise out of their banks as well as flooding in low lying urban areas,” forecasters say. [Weather.govTwitter]

Rainy Weather Driving Tips — “The Virginia Department of Transportation (VDOT) has some good guidance for safe driving in the rain, like keeping extra distance between your vehicle and the vehicle in front of you. Also, turn on your lights anytime it’s raining.” [Fairfax County Fire, YouTube]

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Across all of Fairfax County, Tysons has the highest concentration of cybersecurity companies with headquarters or major operations.

According to a list put together by the Fairfax County Economic Development Authority (FCEDA), Tysons has 119 cybersecurity companies, the most of any jurisdiction in the county. Tysons is followed by Reston with 79 companies and Herndon with 68 companies.

Economic groups have been working to turn Tysons into a Silicon Valley for cybersecurity. Bringing in more tech companies, and how that could impact education and infrastructure challenges around the region, was a major theme of the Tysons 2050 event

Some of the cybersecurity companies — or companies with cybersecurity components — in Tysons include:

  • BAE Systems — a defense, security and aerospace company
  • Centurum — a network engineering and infrastructure company
  • Cyren — a cloud-based internet security services company
  • Dell EMC — a data storage and management company acquired by Dell in 2016.
  • HumanTouch — a private and public sector cybersecurity company
  • Leidos — a defense and intelligence industry focused cybersecurity company
  • Merlin International — a cybersecurity company focusing on both government and commercial contracts
  • Microstrategy — a data analytics company
  • MITRE — a not-for-profit company that operates research and development centers
  • Nehemiah Security — a cyber-risk assessment business
  • Novetta Solutions — a data-analytics focused business
  • OBXtek — a technical and logistics solutions company which works primarily with the federal government
  • Preferred Systems Solutions — an IT management, development, and operation company
  • PFP Cybersecurity — a cybersecurity company utilizing analog signals to assess the integrity of digital information
  • Raytheon — a major defense contractor
  • RSA — a commercial-focused cybersecurity company
  • Strategic Operational Solutions — an IT strategy and management consulting firm
  • Tangible Security — a cybersecurity company
  • Tanium — an endpoint security and systems management company
  • Trustwave — a business-focused cybersecurity company
  • Veris Group — a Tysons cyber-risk assessor that acquired in 2016 by cybersecurity company Coalfire
  • Verodin — a cybersecurity management company

There are also several major cybersecurity companies located around the Merrifield area, including:

Photo via FCEDA

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Morning Notes

Building Near Spring Hill Metro Purchased — “Transwestern today announces it brokered the sale of Tysons Pond II, a 67,151-square-foot, free-standing office building located at 1604 Spring Hill Road in Tysons… A private investor purchased the 70 percent leased asset for $10 million.” [Citybizlist]

Nantucket Bay Scallops Season in Tysons — “Nantucket Bay scallops are in season and Eddie V’s of Tysons Corner has a special scallop dishes that are available for a limited time.” [WUSA 9]

Jerry Gordon Reflects on Retirement — “Jerry Gordon has two weeks left on his job as the president and CEO of the Fairfax County Economic Authority, and his office is so empty it echoes… After 31 years on the job, Gordon is transitioning out of a role that led Fairfax to become a superstar in economic development.” [Washington Business Journal]

More Silver Line Phase 2 Problems — “Hundreds of concrete rail ties installed at track crossovers along the second phase of the Silver Line are flawed, officials say, a problem that could further delay the multibillion-dollar rail project that is already 13 months behind schedule.” [Washington Post]

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