CONTINUING THE WAY FORWARD ITAC, OCTOBER 26, 2016
CONTINUING THE WAY FORWARD
ITAC, OCTOBER 26, 2016
PRESENTATION OVERVIEW
1. Way Forward Strategy Update
• Progress to-date• Notable upcoming initiatives
2. FY16 Key Department Outcomes
3. FY17 Budget Request
• Incentive Fund• TOT Reinstatement
GOAL:Reduce office vacancy by half and diversify the Arlington economy over the next 60 months
0%
5%
10%
15%
20%
25%
0 12 24 36 48 60 72
% Vacant
21.7%4Q14
20.1%4Q15
Months
GOAL
$4.5 M
Local tax
revenue
for a
100%
occupied
building
$3.3 M
Local tax
revenue
for a 75%
occupied
building
$2.5 M
Local tax
revenue
for a
50%
occupied
building
$1.1 M
Local tax
revenue for
a 0%
occupied
building
Note: Assumes 100% occupancy = 400,000 SF of RBA in a building in the Crystal City submarket. Based on private sector for-profit tenancy.
Each 1% of Office Occupancy
is Worth $3.4 million in Local Taxes
Director’s Office
$582K
Business Investment
$3.1M
Real Estate Development
$440K
Convention & Visitors Services
$753K
Strategic Partnerships
$1.1M
Cultural Affairs$2.5M
Administration
$743KCommunications
AED FY16 BUDGET BY DIVISION
3 FTE
4 FTE
12 FTE 16.9 FTE4 FTE5 FTE3 FTE
Budget Included inBusiness Investment2
1. FY 16 Budget shown does not include Artisphere ($2.72m expense)2. Communications budget is shown under Business Investment to illustrate those funds as primarily an extension of resources for BIG.
5.8 FTE
TOTAL EXPENSE BUDGET 1:
$9.2M53.7 FTE
KEY INVESTMENTS - FY16 BUDGET
• Five new FTEs for business development
• $300,000 in ongoing funding for marketing
• $200,000 in one-time funds for tourism
• Added support for partner organizations
IMPLEMENTATION: LEAD GENERATION
• Startup Arlington
• Fast Four
• Dong Sheng Startup CompetitionPromotions
• Arlington Premiere
• Executive Luncheon
• Troker VIP Reception
Business Engagement
• CES
• SxSW
• DARPA Tour
• Site Selector’s Guild
• World Travel Market
• Robotics Conf.
Marketing Missions
• Inc. Magazine
• Tech Cocktail
• DC Inno
• Wall St. Journal
• Globe St.
• Area Development
Media Exposure
150+ Applicants10 Media Articles
261,000 Impressions
125 New Businesses30 Arlington Executives
130 VIPs
6 Cities Visited5 Panels Hosted
3 Site Selector Meetings600+ Leads Generated
550 News Clips558M Impressions
$18M in ad equivalency
42CLOSED and Announced Deals
1,840,000SQ FT of Real Estate9,300
JOBS Newor Retained
34 Deals with BIG Assist
8,400 Jobs with BIG Assist 1,610,000 SQ FT with BIG Assist
Source: AED, CoStarFiscal Year 2016 YTD (July 1, 2015 - Feb. 22, 2016)
3 of 34Received INCENTIVES
FY16 OUTCOMES
SELECTED ANNOUNCEMENTS
Source: CoStar, AED.Estimate based on $3.4 million in local taxes recovered for each 1.0% in vacancy rate improvement
10%
15%
20%
25%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
12.6%
21.7%
20.1%
VACANCY RATE: 2012 - 2015
12.6%
ESTIMATED LOCAL TAXES RECOUPED:
$ 5.4 M
= 1.6%
NOW WHAT?
SELECTED CY16 MARKETING – U.S. & INTL.
• CES – January (TECH)
• Peru – February (TOURISM)
• SXSW* – March (TECH)
• China – April (TOURISM)
• ICSC –May (RETAIL)
• Canada – June (TOURISM & FDI)
• Select USA* – June (TECH & FDI)
• China – August (TECH & FDI)
• World Travel Market* – November (TOURISM)
*Second engagement
SELECTED MARKETING HIGHLIGHTS
SELECTED CY16 PROGRAMS - LOCAL
• Arlington Mill Pop Up Gallery – Ongoing (CULTURAL AFFAIRS & SPI)
• Global Phonic Series – Feb.-March (CULTURAL AFFAIRS)
• Small Business Networking – March (BIZLAUNCH)
• Green Business Showcase – April (BIG)
• Small Business Awards – May (BIZLAUNCH)
• Small Business Summit – May (BIZLAUNCH & REDG)
• Arlington Hotel Summit – September (ACVS)
• Arlington Hospitality College – Jan., Apr., Jul., Nov. (ACVS)
• Education Forum – Fall (BIG & SPI)
SELECTED LOCAL PROGRAM HIGHLIGHTS
SMALL BUSINESS FY16 OUTCOMES
Assisted 2,500 business people including:
• 1,900 workshop participants;• 550 individual counseling sessions; and• Among these, 800 conducted in Spanish
Specialized programming including:
• 44 technical assistance workshops• Arlington Small Business Summit • Art on the ART Bus • Lawn Chair Talk Series
In addition the BizTeam helped 50 businesses navigate
regulatory issues
CULTURAL & COMMUNITY DEVELOPMENT FY16
• 442 public performances, exhibits, events, workshops and temporary installations
• 4,600 Lee Arts Center Studio Visitors
• 357 Artists and Arts Organizations supported
• $3.6 million in leveraged funding
• 50 Creative Economy events drawing a total of 1,000 attendees at locations across Arlington.
Assisted the Crystal City, Rosslyn and Ballston BIDs with pedestrian safety, traffic, lighting, street beautification, signage and events projects.
BALLSTON QUARTER REDEVELOPMENT
INVESTMENT
• $55M in planned public investments representing Arlington’s largest ever public-private partnership, and first ever use of a Community Development Authority (CDA) public financing tool
OUTCOME
• $150M in net incremental taxes to County over 30 years
• Letter of Intent: Nov 2015
• Development Agreement & CDA Formation: April-May 2016
• Construction Begins: May-June 2016
• Project Delivery: Spring 2018
$325M transformative redevelopment of
cornerstone project
• 45,000+ group room-night leads
• 22,000+ group room-nights booked, worth $3.6+ million
• 55,000+ StayArlington website visits
• 13,400+ visitors and residents served in-person
• 200+ Arlington-related articles with 60M impressions worth $8M
• 9 major travel trade events with 250+ one-on-one appointments and Arlington exposure to 60,000+ attendees
• 2015 Arlington hotel occupancy: 76.9% (up 1.3% over 2014)
• 2015 Arlington hotel average daily rate: $158.85 (up 4.7% over 2014)
• 2014 Arlington visitor spending: $2.97 billion (up 4.9% over 2013)
• 2014 Arlington tax revenue: $80.7 million (up 3.0% over 2013)
• 2014 State tax revenue of $107.8 million (up 13.8% over 2013)
TOURISM FY16 OUTCOMES
BUDGET COMPARISON FY16 TO FY17
FY16 TOTAL EXPENSE BUDGET:
$9.2M53.7 FTE
NO INCENTIVE FUND
NO TOT REINSTATEMENT
FY17 TOTAL EXPENSE BUDGET:
$9.1M53.7 FTE
$1.5M INCENTIVE FUND
$1.25M TOT REINSTATEMENT
INCENTIVE FUND REQUEST OVERVIEW
• A $1.5 million incentive fund to provide upfront cash grants to early stage tech and tech catalyst companies and proof of concept projects.
Startup Companies
High ReturnAccelerators & Incubators
Rapid Growth
Initial outcomes of 600 jobs and 75,000 s.f. of office occupancy
COMPETITIVE ENVIRONMENT
Jurisdiction Tool Impact
Washington D.C.Qualified High Tech Company
(QHTC)& Council Legislation
Multi-million $ packages (ex. Advisory Board Corp. $60
million)
Prince George’s County
Economic Development Fund $50 million fund
Alexandria Tax Abatements$23 million for NSF and other federal
project packages
Loudoun County Economic Development Fund $1.0 million fund
Prince William County Economic Development Fund$1.6 million fund
($3 million additional proposed FY17)
HEADWINDS
1. National Science Foundation Relocation
• Scheduled to move to Alexandria 2017• Vacancy of 665,000 s.f. in Ballston
2. Federal Lease Expirations & Uncertainties
• Transportation Security Administration 550,000 s.f.in Pentagon City (on limited-term lease extension)
• Drug Enforcement Agency 500,000 s.f. in Pentagon City (lease expiration 2018)
Personnel
• Addition of two Limited Term FTEs (second Destination Sales Manager and new Content Manager) to expand sales and marketing reach
Non-Personnel
• Industry research and two-year strategic plan
• Content resources: photography, web, video, editorial, etc.
• Advertising, events, missions (media and sales), and online marketing
• 70% focus on domestic audiences: meeting/group planners, couples, families, friends, LGBT, seniors, journalists
• 30% focus on international audiences: tour/receptive operators and journalists (UK, Germany, France, China, Brazil, Canada, Mexico, Peru, Argentina, Chile)
TOURISM FY17 ADDED FUNDS
$0.0
$0.5
$1.0
$1.5
$2.0
TOT sur.
One-time
General Fund
ACVS TOTAL BUDGET HISTORICAL CONTEXT
FTE 10.8 10.8 10.8 4.8 4.8 4.8 4.8 5.0 7.0
mill
ions
TOT Rev. $21.9 $22.9 $21.8 $22.3 $20.8 $23.3 $22.8 $25.0 $25.0