Washington D.C. Job Hopes Rest on Tech and Real Estate

Washington D.C. Job Hopes Rest on Tech and Real Estate

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Several panelists at a D.C. Chamber of Commerce-sponsored policy forum expressed the belief that technology and real estate will be the drivers for the District's economic renaissance.

The forum was the second such gathering this year and more than 75 people filled Reed Smith's East Tower penthouse on K Street in Northwest.

"Real estate and technology are crucial to the District's economic well-being as they drive growth and productivity in the city," asserted A. Scott Bolden, managing partner of Reed Smith LLP, and the person who welcomed the participants and audience.

Panelist Anthony A. Lewis agreed.

"There's lots of things happening in the tech world ... we're in a hyper-competitive world. Huge opportunities exist in all aspects of life. We have built the biggest information highway in history and we're preparing for the increased technology opportunities that are becoming available," said Lewis, vice president of government affairs for Verizon's Mid-Atlantic Region. "With the right regulatory environment, we can increase opportunities and partnerships ... don't tie our hands with the old regulatory structure."

Chamber CEO Barbara Lang urged city officials and business leaders to continue working closely together as the employment and economic climate changes.

"The past few years have been difficult ones. Businesses have had struggles. As the dust settles, we want to make sure people are poised to take advantage of the new economy," Lang said. "There are smart choices that actively position the city for real changes. We must work on our strengths and shore up the weaknesses. We will look at these two industries and their impact."

The discussion was moderated by D.C. Mayor Vincent C. Gray (D) who Lang said had encouraged the Chamber to arrange other forums because of the success of the first one. Gray, 67, said he listened closely to the elite panel of businesspeople and to the questions from the audience on how to move the city forward. In his opening comments, Gray outlined the plethora of projects that dot the city's landscape.

"We had a deep recession over the past two years. There were 14 projects on the agenda at the beginning of the year. City Center at the old Convention Center site got financing. It is the biggest hole I've ever seen. It will have retail, residential; it will be a community unto itself."

Gray also discussed Michigan Market which is being developed in concert with Catholic University. The $200 million project will boast one million square feet with what he called 'unique and different' residences, artist studios and other amenities. The mayor said the $2 billion worth of projects currently underway around the city has translated into 3,700 construction jobs and 5,200 permit jobs.

By 2015, he said, projects at St. Elizabeths in Southeast and development of the Walter Reed Hospital complex in Northwest will generate $11 billion and produce 50,000 construction jobs.

Gray said there are about 2,000 technology businesses in the District that have attracted $71 million in venture capital so far this year.

He admitted that while the District strives to become a technology center, there are distinct challenges that must be overcome for that to become a reality. The first of these is to provide an educated and capable workforce with the technical and technological skills that tech businesses need.

To that end, Gray and others said, there is now a greater emphasis on developing science, technology and math skills in children at an earlier age. Also, city officials are building capacity in its community colleges and partnering with universities to ensure that tech outfits have a pool of qualified applicants.

Paul Lancaster Adams, senior director of U.S. Government Affairs with Microsoft, spoke of the work he and his colleagues are involved in in District schools.

"This is a digital alliance. We've always had a presence in D.C. but we realize that it's a new day. Innovation, jobs and education are all related. Girls by the nature of how they grow up don't know the opportunities available to them in the tech field ... schools are so important – we're joining the mayor to train the trainers in best practices."

Cindy Troutman, co-founder of CGH Technologies, a woman-owned, privately held small business advocated vigorously for city officials to look for ways to moderate the tax structure, lower the tax burden and court new businesses to the District.

"Since I started the company I wanted to be in the District," she said. "There are many challenges, however. The real estate market is very expensive, which means less competition with government clients and a decreased ability to attract technology workers because of the expensive commute and parking."

"I talk to recruiters constantly and we are falling way behind with out-of-country competitors. It's difficult to do business. We need to encourage and court businesses ... neighborhoods are getting cleaned up, young people want to stay here and technology is coming. A lot has to do with the marketing of that. This will eliminate some of the burden of competition, feed jobs that are already here and create more."

Akridge President Matt Klein expressed similar sentiments.

"For 37 years, Akridge's headquarters has been in Washington, D.C.," he said. "It has a unique appeal to a broad range of businesses. We need a broader set of strategic investments. For example, raising the debt cap would free up $500-$750 million for 'shovel ready' projects."

Between 1995 and 2010, Klein – the Chamber's president-elect – said businesses have generated $2.7 billion in "present tax benefits" and 66,000 jobs. Infrastructure investments such as the District's $99 million street car project, the proposed Silver Line Metro extension, development at Tyson's Corner and increased technology investments have raised the District's and region's profile in positive ways.

He also spoke of Union Station's potential as a transportation hub, the Bike Share program and the increased demand for certain spaces, lifestyle changes and people using more amenities in the buildings in which they work and live.

But factors impeding the District's growth include high property taxes, a morass of stifling regulations, the high cost per square foot of office space, the impact of high fees on local businesses and a less than aggressive effort to go after new business has translated into between $800 million and $1 billion in retail losses to other jurisdictions, said Klein.

"The city must take a broader look at the collateral effects of regulations, such as the fiscal implications," he said to Gray. "You have to understand the collateral effect you have on policies you impose. The Chamber looks at all aspects to ensure that there is compatibility. You need to have a transparent regulatory environment where everyone can weigh in."

Chris Smith, chairman and CEO of William C. Smith & Co., said multi-family homes are the future and that the city has the infrastructure to accommodate 800,000 to one million residents.

"We have stemmed the tide of people leaving and now the population is 600,000," he said. "You can find development everywhere throughout D.C. Retail is following development. There are a lot of positive things going on."

At one point, Gray posed a series of questions to the audience.

"How does the city grow itself? Cut taxes, increase the debt cap? Attracting one million residents? Only 30 percent of the people who work in D.C. live in D.C. We have unique restraints. How do we achieve what you've talked about without the government being drowned in red ink?"

Some of the restraints Gray outlined are the city's inability to tax people who live outside of the District but who work in the city and pay no taxes to District coffers; the wear and tear on the city's roads, sewer systems and other infrastructure which is borne entirely by D.C. residents; and related issues.

When he discussed this "inherent unfairness" with his counterparts in other jurisdictions, he said they fell on the floor laughing when he proposed ways to achieve a more equitable outcome.

After the conclusion of the forum, Gray told a Washington Informer reporter he learned a great deal from the exchange of ideas.

"We continue to demonstrate that we take their views seriously," he said. "There is a heavy investment of technology and we're working with them (business leaders) on regulations. People see this as actionable. We can (implement) some of these recommendations."

"It is no accident that the deputy mayor and director of business development are here. We're continuing the process. We've done this before."