AOL Planning Move to Loudoun County

Firm Leaving Cramped Fairfax Quarters

by Kara Swisher

Saturday, February 24, 1996

America Online Inc., the nation's largest on-line services company and one of the fastest-growing businesses in the Washington area, yesterday said it plans to move from a cramped trio of office buildings in Fairfax County to a single large headquarters facility in Loudoun County.

Company officials confirmed they have signed a letter of intent to purchase the prominent British Aerospace building at Route 28 and Waxpool Road, just north of Dulles International Airport. The building has been largely vacant since the British company decided not to expand as planned. The deal is subject to meeting "due diligence" requirements, America Online officials said.

America Online would not disclose the price it offered for the site, but sources familiar with the deal said the company will pay close to $25 million for the building.

The main reason for the move is to accommodate the company's fast-growing work force, which has more than doubled to 1,500 employees in Northern Virginia in the past year, said America Online spokeswoman Pam McGraw. The company has 4,000 workers nationwide.

The ultimate aim, she said, is to create a single "campus" for its employees, similar to those of many high-technology companies on the West Coast, such as Microsoft Corp. America Online said the deal gives it the option to purchase an additional 60 acres of land around the building to expand.

"We think it is important to have one facility and to have as many employees in one place as possible," McGraw said. "As we have grown, the space issue has made it awkward and it has been harder to do business."

If the deal is completed, a majority of the company's employees in Northern Virginia will gradually move to the new site from three nondescript buildings on Westwood Center Drive in Vienna, one of which the company owns. It leased the other two recently to accommodate new employees. Those workers include producers of its computer on-line content areas, marketing personnel and others. Some workers in its computer data and technology units will remain in Reston.

The move would make America Online the second-largest employer in Loudoun County, behind United Airlines Inc., which has 5,000 employees there. Loudoun is the fastest-growing county in metropolitan Washington and has the second-highest per capita income behind Fairfax County. Many of its new residents are white-collar workers moving into new planned communities.

The more than 2,000 technology firms in the Washington area are the mainstay of the region's economic growth. In Northern Virginia, for example, employment in business services occupations has increased at three times the rate of overall job growth in the region over the past year, spurred by such companies as America Online.

Sources said the high-profile company was courted by Loudoun County officials. Real estate sources said AT&T Corp. was also interested in the site.

"This is probably not an unexpected step for a fast-moving company like America Online," said Ray Pelletier, executive director of the Northern Virginia Technology Council.

America Online's move into the British Aerospace building -- which with about 250,000 square feet of office and warehouse space is one of the largest vacant blocks of space in the area -- is certainly good news for the county, area real estate brokers said. According to John McEvilly Jr., senior vice president of CB Commercial Real Estate Group Inc. in McLean, the office vacancy rate in Loudoun County will drop from 28 percent to 5 percent if the deal is completed.

"This is one of the few large complexes out there, so it will make a dramatic impact," McEvilly said, "especially because it was considered a white elephant" after British Aerospace scuttled plans to expand there. Some British Aerospace workers are still housed in a small part of the building, he said, but they will have to be moved.

Taylor Associates of Dallas and Grubb & Ellis in Vienna are brokers for the transaction.

Staff writers Peter Pae and Peter Behr contributed to this report.

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