Northrop Grumman explains choice of Va. for headquarters

The decision by Northrop Grumman to relocate its headquarters to Virginia rather than Maryland or the District of Columbia boiled down to real estate, proximity to the federal government and economic development incentives, according to the company.

"We looked at all of those factors in total and the decision pointed to Virginia," Northrop spokesman Randy Belote said in an interview Tuesday.

Belote said the defense contractor, now headquartered in Los Angeles, was looking for a facility that could accommodate its cybersecurity operations and other high-tech divisions.

The company also wanted to be close to the Pentagon and other government agencies with which it does much of its business.

Lastly, Northrop officials looked at "overall economics," which Belote said included the economic incentives the different jurisdictions brought to the table.

The defense contractor announced its decision at its offices in Rosslyn, Va., on Tuesday. Virginia Gov. Robert F. McDonnell was on hand. The Baltimore Sun reported the decision Monday.

The company said it is negotiating with building owners in Falls Church and Arlington.

Northrop said in February that it was planning to move its 300-person headquarters to the Washington region in 2011. It set off a high-stakes, aggressive competition involving Maryland, Virginia and the District of Columbia.

Amid news of the move to Virginia, critics said Maryland lost the bid because the state is not business-friendly.

Belote declined to give details about the economic incentives his company was offered but said Maryland's package was "competitive and compelling."

Maryland economic development officials also declined to reveal the amount of incentives. McDonnell told WTOP radio in an interview Tuesday that his state offered an incentives package worth $12 million to $14 million, a spokesman with the state confirmed.

Economic Development Secretary Christian Johansson said Maryland was not bypassed because of the state's business climate.

"This deal could have worked on either side of the border," Johansson said. "Northern Virginia had more options that met the real estate requirements."

Maryland didn't have the amenities in an office building that Northrop was looking for, Johansson said, adding that the tight real estate market in Montgomery County hurt the state because there wasn't much available to offer Northrop. The defense contractor looked at National Harbor in Prince George's County but would have had to build a facility.

Christie Miller, a spokeswoman for the Virginia Economic Development Partnership, said Virginia benefitted because Northrop already has offices in the state, with five of its units headquartered there.

"Obviously, we are thrilled with this announcement," Miller said. "It continues our success at attracting headquarters projects to Virginia and just boosts our status in terms of our standing in the defense sector."

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