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AES Opts to Stay Put

After considering a move, energy company decides to expand its Arlington headquarters.

Despite offers from Montgomery County, Gov. Mark Warner (D) said last week, Arlington-based energy company AES Corporation has decided to expand its headquarters within the county.

State and county officials offered more than $200,000 to keep the global energy supplier in the county, but point to the $5 million that AES will be spending to expand its current offices as a return on that investment - a return that will retain one of two Fortune 500 companies based in Arlington.

The decision will also bring 115 new jobs to the county, as AES moves into larger offices in the Ballston Point offices, now under construction.

Founded 22 years ago in Arlington, the company owns $34 billion in assets, including power generation and distribution facilities in 28 countries, employing 32-33,000 employees worldwide.

With 119 plants centered largely in the U.S., AES subsidiaries generate 46 gigawatts of electricity a year. Global distribution networks include facilities around South America and Central Asia, serving 11 million customers.

After the company’s new headquarters are completed, AES will employ 300 people at its Arlington offices, ranking the company as one of Arlington’s top 30 private employers.

<b>FOR A LARGE</b> company, AES has kept a low profile locally, said John Zahurancik, a company spokesman. That’s partly because much of the business is going on elsewhere. But the new headquarters will give AES a bigger footprint in the local economy.

“With changes in the world and changes in our business, we’re making our corporate center larger than it’s traditionally been,” said Zahurancik.

More important than the number of jobs AES brings, said Warner, is its role in keeping Arlington’s economy diverse. AES’s decision was also a sign that Virginia, and Arlington, were headed in the right direction, he told the audience at the 79th annual Arlington Chamber of Commerce meeting and luncheon.

“We did provide incentives. But if Virginia didn’t have a qualified work force, we wouldn’t even be in the running,” said Warner. “Virginia has made, in the past, the necessary investments in its infrastructure to remain globally competitive.”

<b>INCENTIVES OFFERED</b> to AES included a $207,000 grant from the Governor’s Opportunity Fund, funding Arlington’s bid to keep the company local.

Much of that came as savings on AES’s site plan, said County Board chair Paul Ferguson. “There were a number of conditions on the site plan, and the savings on those were passed on to AES,” he said. “The county picked up those costs.”

But incentives that Arlington offered to keep AES paled in comparison to what Montgomery County was offering, he said. “Maryland was offering subsidies,” said Ferguson.

The real attraction, he said, was Warner’s involvement in keeping AES, which let the company know there was a real interest in its future. “We couldn’t have achieved this without the governor’s help,” said Ferguson. “He took my phone calls, and that let them know he was involved.”

In return for breaks on the site plan, AES will be pumping $5 million into Arlington’s economy.

“That’s going to be a combination of jobs, and build up, the building out of our offices,” said Paul Hanrahan, AES president and CEO.

<b>WITH REVELATIONS ABOUT</b> Enron only a year-and-a-half in the past, Warner and Ferguson acknowledged that government support for an energy firm could spark some fears.

But Arlington is no Houston, they said, and AES is no Enron. “They’ve been a long-time corporate citizen, and we want to keep them,” said Warner. “Arlington doesn’t have many major corporate headquarters, and we wanted to keep them in the community.”

There’s only one other company that brings that kind of clout to Arlington, said Ferguson: US Air. Too much reliance on any one industry could set the county up for economic disaster if that industry suffered.

But with AES, US Air and federal government, Ferguson said, Arlington is starting to spread the wealth around. “Much of our economy has been reliant on government filling office space,” he said. That has kept the county strong during the economic downturn, but has also taken lots of land off tax rolls, he said.

Having AES in the county “does widen the types of business interests here,” said Rich Doud, executive director of the Arlington Chamber of Commerce. “It brings another dimension to who’s here, rather than putting all eggs in one basket.”

It could also light the way for other corporations, he said. Arlington’s efforts to keep AES local “demonstrates its attractiveness as a site for corporate headquarters.” Those bring jobs, said Doud, and “it’s great to have the additional employees.”