Choosing urbanized places vs. choosing DC as a place to locate significant headquarters business operations: Marriott and CoStar
This is more of an aside. I've written a number of pieces about how corporations are moving from suburban locations back to the city. One of the biggest examples of this is how GE is moving from Stamford, Connecticut to Boston.
But DC (and Philadelphia) seem to be immune to the trend. I am not familiar with the dynamics in Philadelphia, but in DC it has to do most likely with high costs of commercial office space, coupled with high cost of housing and high prevailing salaries.
-- "Businesses moving back to the center: not a universal trend," 2015
-- "A lesson that seeing is believing: Panasonic's new building in Newark, NJ as an example, positive and negative, in businesses coming back to the city center," 2015
-- "Smart Growth America report on businesses moving back to center cities (and suburban core business districts)," 2015
Marriott, based in Montgomery County (but originally based in DC), is moving from a suburban disconnected office park location to Downtown Bethesda ("Marriott to move headquarters to downtown Bethesda with $62 Million in incentives," Washington Post), within a couple blocks of the Red Line Metrorail Station.
I don't know if DC tried to land them, but given that more than 60% of the firm's employees live in Montgomery County, getting them to move into DC was a stretch.
The firm received incentives about 20 years ago to stay in Maryland, but didn't earn the complete amount because it didn't grow its employee count. Partly this was because the company sold off the hotels it actually owned to a related company, Host, which is now an REIT ("Host Marriott Plans to Become REIT, Purchase Luxury Hotels," 1998, Wall Street Journal). This reduced its employee growth rate.
D.C. Council OKs $6.1M in tax breaks for CoStar Group," Washington Business Journal") announced that they will be locating their research division in Richmond, Virginia ("CoStar picks Richmond for major research center; hiring 730 people here," Richmond Times-Dispatch), likely because the cost of space and salaries are much lower than in the DMV. From the article:
"We want to provide our people with competitive compensation," said Andrew C. Florance, CEO and founder of CoStar, adding that most of the research and analytic jobs - the bulk of its operations - will pay in the $60,000 range. ...DC needs to study why it seems to be exempt from the trend of corporations relocating to the city from the suburbs, which is particularly pronounced in Chicago ("Companies moving to Chicago from the suburbs," Chicago Tribune) although yes, CoStar moved its headquarters to DC from the suburbs, but rather than to continue to grow its business footprint in the city, it chose to locate in Richmond. Even so, CoStar is a rare example of a somewhat large firm locating in the city from the area suburbs.
"We are thrilled to be in Richmond and we look forward to being an engaged corporate citizen," Florance said. "This will be our single biggest operations and global research center."
The company started its search about a year ago, narrowing its list from 20 cities to Atlanta; Kansas City; Charlotte, N.C.; and Richmond. Factors under consideration were a high quality of life, culture, cost of living and a highly educated workforce. ...
The company is expected to infuse a quarter of a billion dollars into the Richmond economy over the next several years in leases, payroll taxes and capital expenditures.
It is another example, IMO, of how the height limit drives up the cost of office space (and housing) therefore encouraging businesses to locate outside of the city.
But note also the companies also use the relocation process as an element of rightsizing, moving "headquarters workers" Downtown, while keeping support staff in lower cost locations in the suburbs and elsewhere. This isn't a new phenomenon, and was pioneered by Wall Street firms in the 1980s, which began moving support staff to nearby locations in Brooklyn and Jersey City.