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Virginia gives Northrop Grumman up to $14 million to move headquarters

Gov. Robert F. McDonnell (R) said Tuesday morning that the state is giving Northrop Grumman $12 million to $14 million in grants and cash incentives to lure the defense giant's headquarters to Northern Virginia.

McDonnell said on his montly call-in show on WTOP that Northrop Grumman's move to Virginia will bring $30 million in taxes to the state over the next decade. About 300 workers, who McDonnell said earn an average of about $200,000 a year, will move from Los Angeles to Virginia when the company relocates in either Fairfax or Arlington counties.

Northop Grumman will announce that it has chosen Northern Virginia as the new home for its global headquarters at 2 p.m., officially ending a heated competition among Virginia, Maryland and the District for the prestige of playing host to the defense contracting giant.

"It's another ratification of our pro-job, economic policy that I've pushed heavily through the course of the campaign and the first 90 days in office that people see Virginia as a great state to do business, a great place to bring families to,'' McDonnell said on the radio, "And the fact one of the largest companies in the world is going to come to Virginia is a terrific early victory for us...This is a big day for Virginia.''

Northrop is a major government contractor, with $25 billion in contracts, and is one of the region's largest employers, with roughly 40,000 workers in the Washington area and 120,000 worldwide.

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In an interview on the 29th floor of his office in Rosslyn on Tuesday morning, Northrop's chief executive Wes Bush wouldn't give any details of the incentive packages his company had received, saying "we're not going to be the spokesperson for the incentives."

"Maryland, D.C. and Virginia were all very, very competitive and were attuned to our needs. I'm grateful for that although that made it tough," he said.

Bush said the company is still in negotiations with landlords in Falls Church and Arlintgon about where it woud go and he said it could be "within the next month or so" before they finalize the exact location and terms of the deal.

He said they picked Virginia because it had sites that were available by summer 2011 when they want to move, sites were close to the federal government, and it offered good economic incentives. "Virginia stacked up very well," he said.

Fairfax County officials, who spoke on the condition of anonymity because the closed-door negotiations were private, said Northrop sought, among other things, money to help cover the moving costs of its employees and pay for country club memberships. It also sought the use of discounted county hangar space at Dulles International Airport for its corporate jet, sources said. It's not clear if any money for those purposes is forthcoming.

A senior official at Northrop said the company didn't ask for country club memberships or relocation costs from Virginia officials.

Anita Kumar and Dana Hedgpeth

By Anita Kumar  |  April 27, 2010; 10:38 AM ET
Categories:  Anita Kumar , Robert F. McDonnell  | Tags: Bob McDonnell, Northrop Grumman, Virginia  
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Comments

Wait, wait, wait, what? We're going to give someone $14 million dollars now in the hopes of getting $30 million dollars ten years from now? That sounds like investing to me. Is state government a business onto itself? Where did this extra $14 million come from?

Posted by: paul5301 | April 27, 2010 12:17 PM | Report abuse

virginia got ripped off.

big time!

Posted by: MarilynManson | April 27, 2010 12:46 PM | Report abuse

$30 million in ten years - isn't that $3 million per year? Also, that depends on whether or not Northrop can get government contracts. What then is the benefit for Virginia to pony up $12 million to $14 million in grants and cash incentives? Is it in hopes of McDonnell going to the country club with the rich and powerful to devise more ways to slash education funds?

Posted by: hadelaide | April 27, 2010 1:15 PM | Report abuse

It's a little difficult to specifically react to this without knowing how the $30M in taxes over ten years was calculated. But if it means $3M +/- in incremental taxes per year, Virginia would have all its money back in 4 to 5 years, and anything after that would be "gravy." There also have to be some incremental tax benefits to whichever local county Northrup finally decides to locate in. I'm confused as to how one can argue that this is a bad deal.

Posted by: waynekubicki | April 27, 2010 1:49 PM | Report abuse

In addition to the taxes that more than re-coup the incentives you have a large number of highly paid people spending money in NOVA. It's a good deal.

Posted by: datdamwuf2 | April 27, 2010 3:41 PM | Report abuse

OK - The Confederate Gov. of Virginia cuts school budgets in SW Virginia to bring jobs to NOVA.
Typical Republican.

Posted by: oypay | April 28, 2010 5:37 PM | Report abuse

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