Growth spurt
Prince William County no longer operates in the shadow of its booming Northern Virginia neighbors

by Garry Kranz
for Virginia Business
January 2006

By the time Sean Connaughton was elected to the Prince William County Board of Supervisors in 1999, the county already had begun to turn the corner. The Washington exurb then was best known as the home of the Potomac Mills outlet mall and the intended location of a rebuffed Walt Disney theme park. Few people in the late 1990s noticed that Prince William was quickly becoming the fastest growing area in already booming Northern Virginia.

Although the county’s population grew by nearly one third in the 1990s, Prince William remained in the shadows of rich neighbors such as Fairfax and Loudoun counties. Businesses flocked to Tysons Corner or the Dulles Toll Road, but Prince William and its biggest cities, Manassas and Manassas Park, were considered “too far” outside the Beltway. “People have choices and businesses have choices, and up until 2000, they were choosing not to come to Prince William County,” says Connaughton, chairman of the Board of Supervisors.

The county also had gained a reputation for its slow-growth battles, including the fight that led Walt Disney Co. to drop plans for its $650 million Disney’s America theme park. The 3,000-acre tourist attraction, planned at a site four miles west of the Manassas Civil War Battlefield, drew the united opposition of historians, environmentalists and slow-growth proponents. The project proposed 1,300 hotel rooms, 6,000 housing units and millions of feet of commercial space. The theme park’s supporters said it would have created an estimated 19,000 jobs and millions of dollars in tax revenues.

“Ten years ago, there was certainly a reaction in the metropolitan area that was fed by some of the deals that went south like the Disney deal,” says Martin Briley, executive director of the county’s economic development team. “We don’t hear about that anymore.”

Prince William’s image and fortunes have changed dramatically. Since repackaging its economic development message a few years ago, the county has sealed more than 200 high-tech deals. They have drawn $2.6 billion in private investment and created at least 11,000 jobs with annual wages of typically $50,000. “That’s a pretty tremendous confirmation of the marketplace,” says Briley.

The new investment includes the building of a $325 million, 300,000-square-foot insulin manufacturing plant by pharmaceutical giant Eli Lilly and Co., which will employ around 350 workers when completed. Though it was scaled back by $100 million and once promised twice as many employees, local officials are hardly whining. Also the Prince William campus of George Mason University has become a magnet for biotech firms, while federal agencies such as the Department of Homeland Security and the FBI are moving offices into the 1,000-acre Innovation Technology industrial park. Other recent announcements include a planned $50 million luxury hotel and conference center for Harbor Station, along the Potomac River. The facility, scheduled to open in late 2007, will have 62,000 square feet of meeting space and an 18-hole golf course designed by Jack Nicholas. “This area has just finally come into its own,” says Deborah Jones, president of the Prince William County Greater Manassas Chamber of Commerce.

The county continues to attract new residents. Its population, estimated at 359,042, has risen 28 percent since 2000. Prince William, in fact, has added 140,000 residents since 1990. Along with the population boost has come an increase in residents’ income. The county’s median household income of nearly $80,000 rivals that of Fairfax, Montgomery County, Md., and others among the nation’s richest counties.

The growth of population and income has affected the county’s housing market. While house prices in Prince William are still considered cheap compared to other parts of Northern Virginia, they have exploded in recent years. The average home price, including condominiums and town houses, is now about $415,000, up from $130,000 five years ago. The average single-family house costs $550,000. “Ten years ago a $300,000 house was like, ‘Oh my God, that’s a nice house,’” says real estate broker Susan Jacobs, the former chairwoman of the Prince William County Greater Manassas Chamber of Commerce. “Now if you’re looking for a $300,000 house, you’re looking at a town house.”

The fastest growing sectors of the housing market are million-dollar homes and subdivisions for upscale, 55 and older residents. These homes frequently sit in gated communities or along golf course developments popping up around towns such as Haymarket and Gainesville, the only areas of the county where large lots remain.

Much of the sales activity comes from two groups: longtime home owners trading up on the newfound equity in their houses and newcomers moving into the area for high-paying jobs.
The rapid growth in home prices is beginning to squeeze middle-class and working-class families. A study by a county task force found that a family earning $44,650 could afford only 1 percent of homes sold in 2004. The group expects the existing shortage of affordable housing to worsen as the county’s population continues to grow by an estimated 31 percent by 2010.

The housing crunch has been particularly tough for the county’s growing Hispanic community, which includes many immigrants. As a result, two or three immigrant families sometimes occupy the same home.

While opponents of the Disney deal won their battle, they may have lost the war to preserve the land around the Manassas battlefield. Many of the 20,000 homes constructed in the past five years are in the same area that Disney wanted to build.

There are many reasons why Prince William County has grown so rapidly. Older and more developed Washington suburbs such as Fairfax and Arlington are already built out and offer few opportunities for business and housing development. Higher costs in those areas also are forcing workers to look further out for homes and jobs with shorter commutes.

Part of the county’s sale pitch is that Prince William, once seen as too far away, isn’t that far these days thanks to changing commuter patterns and construction of roadways such as the Prince William County Parkway and Fairfax County Parkway. To prove that point, the county’s economic development agency dispatches teams of drivers to key intersections at least once a year to clock travel times. It claims that 75 percent of Northern Virginia workers live within a 30-minute commute of Prince William’s center “It’s an important message,” says Briley.

Aggressive moves by the county to lower tax rates also have made the county attractive for development. The board of supervisors cut property taxes from $1.36 per $100 of assessed home value (the highest in the region in 1999) to 91 cents. The rate is expected to drop to 75 cents this year.

Taxes on computer equipment also have been slashed by two-thirds and depreciation rates have accelerated since 1999, saving millions of dollars annually for the high-tech and biosciences companies that the county targets. Although more than 3.2 million square feet of office space has been built or is under development since 2001, Prince William has a vacancy rate of only 4 percent.

The county’s tight fiscal management, economic growth and low unemployment rate of about 2.5 percent have earned it a rare AAA bond rating, awarded to fewer than 1 percent of local governments.

The county’s rapid growth has also created several challenges that could ultimately pressure community leaders to rethink some of the policies that have made the area so attractive. County surveys show residents are mostly pleased with the services in their communities, but they are concerned about the rate of growth, traffic and road building.

Community leaders also worry that recent decisions by the Pentagon to relocate 18,000 jobs to Fort Belvoir to the north and another 5,000 to Quantico in the south will mean even worse traffic for Prince William.

To keep pace with the population growth, more than 20 new schools have been built for a nationally recognized public school system serving more than 65,000 students. New fire and police stations have also been built, and about 400 new police officers and firefighters have been hired. Currently, the county is financing $100 million worth of new road construction, and voters will likely be asked to support bonds for $180 million more for roads in November.

Prince William Hospital, a once small community facility, is a prime example of how demand is quickly outpacing capacity. A new 36,000-square-foot emergency room opened in July, the hospital’s second expansion. A new surgery center opened in October, a new cancer center will open this summer, and a major outpatient center is planned for Haymarket, where the county’s fastest growth is occurring. “[Residents] are expecting more technology, and that’s why we’re buying more technology,” spokeswoman Donna Ballou says of new offerings including a state-of-the-art CAT scan machine.

As the county’s demographics change, so do residents’ expectations. One example is a proposed $56 million, 1,100-seat performing arts center being developed by the county, city of Manassas and GMU that planners boast will rival Milan’s La Scala Opera House. “We’re trying to provide some of the basic services as well as some of the amenities they are not only requesting but demanding,” says Connaughton.

Those demands, however, could tax Prince William’s resources and put pressure on politicians to loosen the government’s reins on spending. Already the county is stepping up historic preservation efforts, and a bond vote is planned for additional parks, trails and recreational offerings.

For now, though, that doesn’t appear to be a problem as rapid growth continues to keep the county’s coffers so flush that local leaders don’t have to choose between lower taxes or service cuts. “We’ve become an attractive place to live and have a business because we’ve stuck to the fundamentals and put the money into roads, schools and public safety,” says Connaughton.