Area’s im­age takes a hit from dis­cord

Po­lit­i­cal dys­func­tion is an un­wel­come re­minder of re­gion’s vul­ner­a­bil­ity

The Washington Post Sunday - - METRO - BY ROBERT MC­CART­NEY

When North­ern Vir­ginia landed one of Ama­zon’s two new East Coast head­quar­ters in Novem­ber, the vic­tory ap­peared to prove that the Wash­ing­ton re­gion could stand on its own eco­nom­i­cally and re­duce its his­tor­i­cal de­pen­dence on the fed­eral gov­ern­ment.

Now, the gov­ern­ment’s par­tial shut­down has punc­tured that bub­ble of op­ti­mism and high­lighted again the area’s vul­ner­a­bil­ity to the fed­eral pres­ence and its record of dys­func­tion and grid­lock.

The im­me­di­ate ef­fect of shut­ter­ing a quar­ter of fed­eral agen­cies has been the bite taken out of the re­gion’s econ­omy es­ti­mated at more than $100 mil­lion a day. More than a quar­ter of a mil­lion fed­eral work­ers and con­trac­tors in the area aren’t be­ing paid, and the rip­ple ef­fects are sap­ping pri­vate busi­nesses through­out the Dis­trict and the Vir­ginia and Mary­land suburbs.

A long-term con­se­quence is set­ting back an ef­fort — be­gun af­ter the 2013 shut­down and ac­com­pa­ny­ing bud­get cuts known as se­ques­tra­tion — to forge a strong regional iden­tity in­de­pen­dent of the fed­eral gov­ern­ment.

Elected of­fi­cials and busi­ness and civic leaders hoped to re­brand the re­gion as a lively, at­trac­tive place to live, visit and do busi­ness re­gard­less of the fed­eral pres­ence. They did so partly to lure com­pa­nies such as Ama­zon to ex­pand the area’s pri­vate sec-

tor. (Ama­zon CEO Jef­frey P. Be­zos owns The Wash­ing­ton Post.)

In­stead, the shut­down, now the long­est in his­tory, has gen­er­ated a new burst of neg­a­tive pub­lic­ity about Wash­ing­ton that mar­ket­ing and tourism ex­ec­u­tives said is re­viv­ing the area’s bad rep­u­ta­tion around the coun­try and abroad.

“It takes an all-too-fa­mil­iar shut­down or se­ques­tra­tion to re­mind peo­ple of the shadow of the fed­eral gov­ern­ment and what it casts over D.C.,” said Cary Hatch, chief ex­ec­u­tive of MDB Com­mu­ni­ca­tions, an ad­ver­tis­ing firm.

“We’ve got all this good stuff — a vi­brant foodie scene, top-tier theater, great qual­ity of life, but then the shut­down slows down our progress,” Hatch said. “It re­ally does un­der­score that we co­ex­ist with this pe­ri­odic po­lit­i­cal drama and dis­con­tent.”

The Wash­ing­ton re­gion’s econ­omy is suf­fi­ciently large that it can re­cover from the shut­down with min­i­mal da­m­age, pro­vided the gov­ern­ment re­opens by Fe­bru­ary, ac­cord­ing to Ge­orge Ma­son Univer­sity econ­o­mist Stephen S. Fuller.

Af­ter that, if the stand­off con­tin­ues be­tween Pres­i­dent Trump and con­gres­sional Democrats over fund­ing for a south­ern bor­der wall, there would be sig­nif­i­cant ef­fects on ho­tel and restau­rant sales, local tax rev­enue and Metro rid­er­ship, Fuller said.

It helps that Jan­uary is a slow month for tourism and that only part of the gov­ern­ment is closed. The 2013 shut­down ended af­ter 16 days but fur­loughed more than twice as many em­ploy­ees.

Peo­ple suf­fer­ing most in the re­gion are fed­eral em­ploy­ees and con­trac­tors at the low end of the in­come scale who have been fur­loughed or are be­ing re­quired to work with­out pay. Many do not have enough sav­ings to cover ne­ces­si­ties such as rent, gro­ceries and util­ity bills.

Such work­ers are con­cen­trated in the eastern half of the re­gion, ac­cord­ing to data re­leased Fri­day by the Metropolitan Wash­ing­ton Coun­cil of Gov­ern­ments, or COG. It said com­mu­ni­ties where half of fed­eral work­ers earn less than $75,000 a year in­clude Wards 7 and 8 in the Dis­trict; Prince Ge­orge’s County inside the Cap­i­tal Beltway; Lau­rel, Wal­dorf and Ger­man­town else­where in sub­ur­ban Mary­land; and part of Alexan­dria and Wood­bridge in North­ern Vir­ginia.

“All of the com­mu­ni­ties in our re­gion are hurt­ing a lit­tle, but some com­mu­ni­ties are hurt­ing a lot,” COG Ex­ec­u­tive Di­rec­tor Chuck Bean said.

So­cial ser­vice agen­cies that help the needy are re­port­ing in­creases in vis­its to food banks and in­quiries about cash as­sis­tance to pay rent and util­ity bills.

The Manas­sas food pantry run by North­ern Vir­ginia Fam­ily Ser­vice has seen a 10 per­cent jump in peo­ple com­ing to pick up gro­ceries. Most are fed­eral work­ers or con­trac­tors, and some are peo­ple who haven’t sought help in a decade.

“It’s folks that we have not seen since the [2008] re­ces­sion, have been stable for sev­eral years, and now are find­ing them­selves in the po­si­tion of again need­ing as­sis­tance,” An­drea Eck, ex­ec­u­tive vice pres­i­dent of pro­grams, said.

Many are bringing a friend, she Fuller, who has tracked the regional econ­omy for years, said that 145,000 of the 361,000 fed­eral work­ers in the Wash­ing­ton re­gion are not re­ceiv­ing pay­checks. In ad­di­tion, he said, about 112,500 fed­eral con­trac­tors are out of work.

The to­tal cost of that hole in the regional econ­omy is $119 mil­lion a day, or 7.3 per­cent of the area’s to­tal out­put, Fuller said.

Fed­eral work­ers have been paid retroac­tively af­ter pre­vi­ous shut­downs, and Con­gress has passed a bill to do the same this time. Based on ex­pe­ri­ence, how­ever, the con­trac­tors would not be re­im­bursed. If that hap­pens, the to­tal over­all im­pact would be lost out­put of $46 mil­lion a day, or 2.8 per­cent of the re­gion’s pro­duc­tion, ac­cord­ing to Fuller.

“This be­comes big­ger the longer it lasts, but it’s start­ing with a fairly small foot­print,” Fuller said.

The shut­down also in­jures the large num­bers of busi­nesses that rely in­di­rectly on fed­eral ac­tiv­ity.

Kristina Bouweiri, owner of Re­ston Limou­sine, the area’s largest limou­sine and bus com­pany, has worked for decades to di­ver­si­added. fy her busi­ness by re­duc­ing its de­pen­dence on fed­eral con­tracts. Only a tenth of her $28 mil­lion in an­nual rev­enue comes di­rectly from the fed­eral gov­ern­ment, com­pared with four-fifths in the 1980s.

But count her among hurt by the shut­down.

“We work with a lot of in­ter­na­tional or­ga­ni­za­tions, and many of them have can­celed their Jan­uary trips be­cause they were com­ing to meet with [now fur­loughed] fed­eral gov­ern­ment of­fi­cials,” Bouweiri said. “The gov­ern­ment work­ers aren’t eat­ing out. They’re those not hir­ing buses to go on wine tours.”

Over­all, her busi­ness is down 15 per­cent.

“The shut­down is bad for ev­ery­one, when you have such a large group of peo­ple not work­ing,” Bouweiri said. “It re­ally af­fects ev­ery res­i­dent of the DMV.”

The shut­down has put the con­ven­tion and tourism in­dus­try on red alert. Desti­na­tion DC, the Dis­trict’s of­fi­cial mar­ket­ing or­ga­ni­za­tion, im­me­di­ately re­vived the “DC Is Open” cam­paign, which it cre­ated in 2013 when the shut­down hit dur­ing the busy fall tourism sea­son.

The goal is to let peo­ple know that al­though the Smith­so­nian mu­se­ums and zoo are closed, plenty of other entertainment re­mains avail­able.

“You can still come and en­joy a Caps game or theater at Arena Stage or . . . other world-class mu­se­ums” such as the Phillips Col­lec­tion or New­seum, Desti­na­tion DC CEO El­liott Fer­gu­son said.

He ac­knowl­edged that much da­m­age has been done, es­pe­cially to the city’s im­age over­seas.

“When you’re in a dif­fer­ent coun­try, and the news all comes from D.C., and it’s all focused on pol­i­tics, then there’s a per­cep­tion that it’s not the most fun or at­trac­tive place to go in the U.S.,” Fer­gu­son said. “We hope this doesn’t con­tinue on to March or April, which is a peak pe­riod for us.”

Like many res­i­dents, Fer­gu­son pointed to one up­side of the gov­ern­ment’s clo­sure: the drop in traf­fic. He said, “I just came from a lunch meet­ing, and the first thing they said was, ‘Wow, it’s so easy to get around.’ ”


Fed­eral em­ploy­ees rally at the Capi­tol on Thurs­day to protest the im­passe be­tween con­gres­sional Democrats and Pres­i­dent Trump over fund­ing for a wall along the U.S.-Mex­ico bor­der.

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