Cham­ber hosts its first eco­nomic de­vel­op­ment con­fer­ence

In­dian Head lo­ca­tion im­por­tant to cham­ber lead­ers

Maryland Independent - - Front Page - By DAR­WIN WEIGEL dweigel@somd­news.com

The Charles County Cham­ber of Com­merce held its first eco­nomic de­vel­op­ment con­fer­ence Mon­day at the Pavil­ion on the Green in In­dian Head.

“We’re here in In­dian Head for a rea­son,” Craig Ren­ner, vice pres­i­dent for mar­ket­ing and public re­la­tions of The St. Charles Com­pa­nies, told the 100 or so busi­ness own­ers and public of­fi­cials that at­tended the

three-hour gath­er­ing. “The Charles County com­mu­nity stands be­hind you.” Ren­ner, who em­ceed the event, is chair­man of the cham­ber’s Mil­i­tary Al­liance Coun­cil which is fo­cused on main­tain­ing and grow­ing Naval Sur­face War­fare Cen­ter In­dian Head to keep it off any fu­ture Base Re-Align­ment and Clo­sure (BRAC) list.

“What’s ab­so­lutely vi­tal is to have the sup­port of the busi­ness com­mu­nity when this next round of BRAC hap­pens,” Ren­ner said. He ex­pects another round some­time in the next three years but others think it may be fur­ther out if it hap­pens at all.

“We will not have a BRAC in this Congress,” said Hugh­esville na­tive An­dre Gudger, now deputy as­sis­tant sec­re­tary of de­fense for man­u­fac­tur­ing and in­dus­trial base pol­icy, dur­ing his speech at the con­fer­ence. “There’s no one in Congress sup­port­ing a BRAC. It’ll be three, four, five years be­fore it’s en­ter­tained again.”

Ash­ley John­son, the tech­ni­cal di­rec­tor of NSWC In­dian Head’s Ex­plo­sive Ord­nance Dis­posal Tech­nol­ogy Divi­sion, sidestepped BRAC talk in his speech by point­ing out that the base has been named a Cen­ter for In­dus­trial and Tech­ni­cal Ex­cel­lence which al­lows it more au­thor­ity to al­low flex­i­bil­ity in con­tract­ing with pri­vate busi­nesses for prod­ucts and ser vices.

“It al­lows you to es­tab­lish a broader agree­ment and then work within that frame­work,” John­son said. He pointed out that of the $430 mil­lion worth of con­tract­ing hap­pen­ing at In­dian Head only about $68 mil­lion of that is with com­pa­nies in Mar yland.

“There’s room and ne­go­ti­a­tion for more con­tract­ing in Mary­land,” he said. The base’s work­force is ap­prox­i­mately 1,900 em­ploy­ees with an­nual op­er­a­tions of more than $1 bil­lion which in­cludes the pri­vate con­tract­ing amount plus di­rect govern­ment ex­pen­di­tures in ex­cess of $500 mil­lion, he said. The an­nual pay­roll at the base is $194.7 mil­lion.

John­son, who be­gan his ca­reer at In­dian Head in 1987 and cur­rently lives in the county, said part­ner­ing with pri­vate com­pa­nies to make use of the fa­cil­ity and keep costs down has be­come a ma­jor goal of his and is also im­por­tant to the Navy.

“It al­lows me to main­tain the fa­cil­ity at a lower cost,” he said, point­ing out that the base’s an­nual util­ity bill is $28 mil­lion. “When I can have just one com­pany come in with $30 mil­lion, it’s a big deal and helps me main­tain the fa­cil­ity.”

Gudger, who started his own tech­nol­ogy firm in 2003, which he grew from one em­ployee to 1,300 by 2011 when he en­tered govern­ment ser­vice af­ter be­ing tapped by the Obama ad­min­is­tra­tion, said he had to move out­side the county to grow his busi­ness.

“When I started my com­pany I had to move out of Charles County,” he said. “That hurt my heart. I don’t want to see that hap­pen again.” He said de­vel­op­ing an ecosys­tem in the county to sup­port and nur­ture tech­nol­ogy and man­u­fac­tur­ing busi­nesses is nec­es­sary to en­cour­age the next gen­er­a­tion of en­trepreneurs.

“We are so close to Washington, D.C., but we’re not looked at as a premiere place for busi­ness,” he said.

He said he was also dis­ap­pointed with the num­ber of lo­cal busi­nesses tak­ing ad­van­tage of con­tract­ing op­por­tu­ni­ties with the Depart­ment of De­fense.

“Small busi­ness has the largest share of Depart­ment of De­fense con­tract­ing than ever be­fore in his­tory,” he said, point­ing out that 25 per­cent of de­fense con­tract­ing dol­lars are go­ing to small busi­nesses. “Mary­land (busi­ness) hasn’t par­tic­i­pated at the level I’d like to see. I don’t see a lot of Charles County busi­nesses par­tic­i­pat­ing.”

Gudger said busi­ness own­ers could start by fa­mil­iar­iz­ing them­selves with the Pro­cure­ment Tech­ni­cal As­sis­tance Cen­ters like the one in La Plata. It’s the “first line” to cross in get­ting into govern­ment con­tract­ing, he said.

“I en­cour­age you to beat down the door to PTAC,” he said.

The other two speak­ers were aca­demics who also have pri­vate con­sult­ing firms in eco­nom­ics and public pol­icy.

Anir­ban Basu, an econ­o­mist who is chair­man and CEO of Sage Pol­icy Group in Bal­ti­more and is a lec­turer at Johns Hop­kins Univer­sity, said the “global econ­omy is not per­form­ing very well,” but that all is not bad.

“The sta­tus quo [for Charles County] is not so bad,” he said at the start of his talk. “The eco­nomic out­look looks pretty good.”

He said that while pro­jected global eco­nomic growth rates keep get­ting down­graded by world econ­omy watch­ers, the U.S. con­tin­ues in the pos­i­tive col­umn at around 2 per­cent, still un­der­per­form­ing the his­tor­i­cal av­er­age of around 3 per­cent. Others such as Brazil, Rus­sia and China aren’t far­ing as well and are see­ing de­clin­ing cur­rency strength.

“The U.S. dol­lar is no jug­ger­naut but Brazil’s real has fallen 33 per­cent against the dol­lar [in the last year],” he said. “Be­sides oil, nat­u­ral gas and de­fense, there’s not much to the Rus­sian econ­omy. Last year the ru­ble was down 20 per­cent against the dol­lar.”

“If you are an in­vestor in the Shanghai [Stock] Ex­change your one year re­turn is neg­a­tive 32 per­cent,” he added. “Money is flee­ing China at this point.”

He said there was a sil­ver lin­ing to all that money flee­ing China: A lot of it is be­ing in­vested in com­mer­cial real es­tate in the United States.

“Non-res­i­den­tial con­struc­tion in this coun­try is up 10.3 per­cent on a year over year ba­sis,” he said. “That’s pretty good for an econ­omy that’s grow­ing at 2 per­cent and that’s be­cause a lot of for­eign money is pour­ing into Amer­ica.”

He said a good sign for this re­gion is the con­tin­ued job growth that matches or ex­ceeds most of the rest of the coun­try.

“Over the next ten years, this thing is go­ing to turn around,” he said of the ane­mic global eco­nomic growth and glut of lower priced raw ma­te­ri­als. “And that’s go­ing to be good for Charles County.”

Dean Bel­las, pres­i­dent of Urban An­a­lyt­ics in Alexan­dria, Va., and an ad­junct fac­ulty mem­ber at Catholic Univer­sity, talked about govern­ment tax rev­enues and the cost of public ser­vices. He said the as­sump­tion since the 1920s has been that new­com­ers mov­ing into an area are, at least ini­tially, a drain on county re­sources and put an up­ward pres­sure on tax rates.

“I think that as­sump­tion has been wrong and I think it’s been wrong for a long time,” Bel­las said.

Put sim­ply, he said “the growth in rev­enue is com­ing from the growth in the res­i­den­tial side” and that lo­cal plan­ners and public of­fi­cials should em­brace res­i­den­tial growth rather than fear it.

“You have to ed­u­cate your public of­fi­cials that growth is good,” he told the cham­ber mem­bers in the room.

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