Chamber hosts its first economic development conference
Indian Head location important to chamber leaders
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.