Nestled along the southwest bank of the Potomac River in Arlington, Virginia, less than 3 miles across the water from the nation’s capital, is one of the world’s most famous institutions: the Pentagon. A symbol of American power globally, the five-sided building is also a next-door neighbor to Arlington’s 225,000 residents and the nearly 700,000 people who call Washington, D.C., home.

Renowned as it is, outsiders aren’t always aware that the Pentagon sits in Virginia, not Washington, D.C., says Christina Winn, director of business investment for Arlington Economic Development (AED).

“It’s interesting: People know about the Arlington National Cemetery, but they don’t always know that the Pentagon is in Arlington,” Winn said. “One of our marketing pieces is kind of tongue-in-cheek: ‘Five Things You Know and Five Things You Don’t Know about Arlington.’ The No. 2 thing is ‘Our largest building has five sides.’”

Bounded by the District of Columbia, Fairfax and Falls Church, Virginia, and the city of Alexandria, Virginia, Arlington County’s 26 square miles of land area make it the smallest self-governing county geographically in the United States. Almost 4.6 square miles of the county are federal property, including the 34 acres of land on which the Pentagon sits.

Still the largest low-rise office building in the world, the Pentagon and its 26,000 military and civilian employees along with approximately 3,000 non-defense support personnel have a substantial tangible and intangible presence in the county. It’s a bit like a large ocean liner permanently sailing in its northern Virginia locale.

“As an Arlington resident, I would say that your ship analogy isn’t that far off,” Emily Cassell, AED’s director of Arlington Convention & Visitors Service, agreed. “It is a big physical presence, but there’s also a constant awareness and respect for the fact that it is in the community.”

That awareness is multi-faceted. Just blocks or minutes away, the Pentagon’s nearby neighbors recognize that decisions affecting America’s defense and global security are made within its huge contours daily. It’s a place where international news is made, where national policy is carried out, where a large chunk of the nation’s resources are marshaled and allocated – and a place where history takes shape.

But the Pentagon is also local, a part of the fabric of the northern Virginia and D.C. communities that surround it. It’s a direct employer for thousands of residents in northern Virginia, the District, and Maryland, and a cultural hub for Arlington.

 

Economic Impact

Finding numbers to assess the economic impact of the Pentagon on its neighbors is difficult. While state by state figures for military spending and economic impact reports for individual military installations are released periodically, the direct economic effects of the Pentagon on its local area are not tabulated.
But it’s certain that the headquarters of America’s Department of Defense (DOD) makes a big difference in every aspect of the local economy. From the direct employment of nearly 30,000 workers and the clustering of DOD contractors and associated businesses in close proximity to the Pentagon to its significant influence on travel and tourism, the building’s influence is overarching.

“It impacts just about everything,” said Marc McCauley, AED’s director of real estate development. “Our transportation network, our commercial office market with all of the contractors and other spill-over space that the DOD leases. The labor force here, generally 25 to 30 percent works for the federal government and a large share of that is DOD. It’s hard to gauge it precisely because of the transient nature of many of those who might work at the Pentagon. They might be here for six months or they’re here serving a tour.”

A look at Arlington County’s “Profile 2018” offers some useful context for the Pentagon’s contribution to the local economy. According to the report, the county has an estimated 224,000 at-place employees. That’s a number nearly equal to the number of county residents. Pentagon employees represent more than one-seventh of the county workforce. Government employment in Arlington is pegged at 48,000 or 21.6 percent, with the Pentagon being the top public or private employer in the area.

Professional and Technical Services is the largest industry in the county, accounting for 23.4 percent of jobs. Clearly, many of these are directly or indirectly associated with the Pentagon, with the number of workers in the sector tallying 52,500.

The institution and the large and small firms that locate nearby to do business with it add considerably to Arlington’s exceptionally skilled workforce. More than 39 percent hold graduate or professional degrees, and 74 percent hold a bachelor’s degree. Median household income is listed at $110,388. According to the 2016 American Community Survey prepared by the U.S. Census Bureau, Arlington is the sixth highest income county in the United States. Unemployment was tabbed at just 2.5 percent in 2017.

While many of those who work at the Pentagon may do so for a brief period – over a span of months or a tour – their time working at the institution or nearby may not be limited to a particular period. Some military members may return to the Pentagon for subsequent tours or assignments. Others may choose to stay and work in the area after leaving the military, McCauley notes, and that’s a boon to the local economy.

“We focus a lot on the quality of our labor force,” he explained. “For several decades, things have been turning around. It used to be that if you got the companies, people would come to your area. Now it’s if you get the right people, companies will come. They will move to where people want to be. The military labor force is interesting in that people retire from the military so young but with a unique set of skills, a great work ethic, and specialized training. Those things relate well to transitioning to other types of employment.”

That’s a “plus” for Arlington, McCauley said.

“Some people may only think they’ll be here for a year while working at the Pentagon, but then they decide to stay here for the opportunities. The skills these people have are attractive to and attract a wide range of companies that want to come to the region.”

Crystal City and Pentagon City, located just to the south and east of the Pentagon, are a good example of how the institution generates business in local communities. Home to a number of satellite offices for the Pentagon itself, Crystal City has hosted a range of defense contractors, including major players like Lockheed Martin. These days, the area is attracting a mix of technology companies, many with links to defense and the Pentagon.

The Pentagon is also a magnet for travel and tourism, said Cassell.

“We have about 7 million visitors per year to Arlington. That generates about $3.1 billion in visitor spending. Defense-related business travel is absolutely significant. For those folks coming here for defense-related business, we share with them what’s happening in Arlington and the D.C. region in hopes that they might separately bring their families here to enjoy the different aspects of our community and the capital region.”

The presence of the Pentagon and a large federal workforce in Arlington and across the river in Washington, D.C., shields the area significantly from economic downturns that affect the rest of the nation. However, changes in government spending priorities, policy, and even politics that affect the defense sector do have an impact on the communities around the Pentagon – sometimes positively, sometimes negatively.

“A really good example of that immediate impact was fall 2013, where we had the government shutdown, sequestration, and pretty significant cuts in agency spending, not just defense,” Winn remembered. “It was very concerning. The Pentagon drives a significant part of our travel business.”

The Budget Control Act of 2011 led to the automatic spending cuts known as “sequestration.” Sequestration, which has had particularly sharp consequences for defense spending, began to affect the Pentagon and Arlington significantly in 2013. Military spending fell by $42.7 billion or 7.5 percent, amounting to nearly half of the $85 billion in spending reductions Congress enacted in 2013. A government shutdown lasting 16 days followed later in the year, exacerbating the situation.

“When things like lower defense spending, BRAC [base realignment and closure] or sequestration and corporate cutbacks happen, our vacancy [leased office space, hotels, etc.] has skyrocketed,” Winn said.

Realizing its dependence on the DOD, the Pentagon, and the government economically, Arlington began to reevaluate its business footing in 2011, Winn recalled.

“We started to look at emerging technology, sectors that actually complement our base. Cybersecurity is obviously a huge one which relates to defense. Our strategy has been to align with the momentum the Pentagon creates here.”

Winn says the county is also endeavoring to recruit small data and technology companies before they grow too large.

“We talk to them about the opportunities of being able to connect to the various staff at the Pentagon and other agencies that can help them get additional business.”

McCauley points to changes in how money is being spent inside the Pentagon, moving more toward defending against growing threats like cyber attacks. “That’s bringing in contractors and economic sectors that aren’t just DOD contractors,” he said.

“We don’t have facilities in Arlington where you can build a fighter jet, but we have plenty of office buildings where people can sit and write code,” McCauley said. “I think that shift helps us because of the nature of the work and the nature of the spending.

“When you look at the Pentagon and shifts in defense spending, for us it’s much more nuanced than dollars and cents. The cutting of the B-1 bomber may not affect us at all, but increases in cybersecurity funding as well as shifting from government personnel to outsourcing can have a positive effect on our commercial real estate market because our contractors are growing.”

Looking ahead, officials at Arlington Economic Development are aiming for even more business diversification. But they agree that the Pentagon and its workforce will continue to have a huge influence on the local economy and the way it grows moving forward.

“When we win big deals at AED, it’s almost always about our local labor force – the quality of it and the supply of workers who can help companies quickly ramp up growth. Anecdotally, I think the presence of the Pentagon in particular has a lot to do with that,” McCauley concluded.

 

The Pentagon and Community Culture

If you live in one of the communities surrounding the Pentagon, you cannot help but be aware of it. From helicopters that pass overhead daily shuttling important personnel to the huge structure to the traffic associated with its workforce to the mere sight of it from any number of nearby points of the compass, the institution is a constant companion.

“Many of us know people who work at the Pentagon, as contractors to the Department of Defense or in companies that are closely tied to defense-related work. If you’re anywhere near Rosslyn or Crystal City or Pentagon City, you see it and it registers,” Arlington resident Cassell said.

Those who move to communities near the Pentagon from other parts of the United States often gain a new appreciation for the significance of the institution.

“I’m a transplant to this region,” said Winn. “The thing that hit me that was so different to living somewhere else was that when you opened the newspaper, the national news was always something that happened someplace else. Here, the national news is at our front door. If you drive by the Pentagon, you realize there’s stuff happening in there that will make news nationally. But it’s local to us. It gives you a much different perspective than if you were living in Kansas or somewhere distant.”

The Pentagon’s presence helps to attract many from “somewhere distant” to live and work in Arlington, giving its culture an international flavor. For a good illustration, look no further than the Arlington Public School system, which includes children who speak 107 languages and hail from 146 countries.

AED’s Cassell, who once worked at the Pentagon as a contractor, points out that the Pentagon reservation is much like a sizeable town with a culture of its own.

“I definitely felt there was a unique feeling as you entered the building, even if it was a routine of going through the process to get in each day and going to whatever office is a mile away,” she said. “I recall vividly numerous times where I would be walking through the building with senior military people from whatever service branch, and it would be like ‘old home week.’ They would run into people they hadn’t seen in 10 years in Korea or something. It was quite striking. It’s like a small city, and people would run into folks they had known in different parts of their careers.”

The Marine Corps Marathon, Rolling Thunder, and the Army Ten-Miler

The neighborhood feeling extends beyond the institution’s walls. As a way of connecting with the communities that surround it, the Pentagon supports a number of notable events. Each October, a field of 30,000 runners begins the world-famous Marine Corps Marathon between the Pentagon and Arlington National Cemetery.

Staged since 1976, the 26.2-mile run passes through Rosslyn and crosses over the Potomac on the Key Bridge into the nation’s capital on a loop past many of the city’s most famous landmarks. After crossing over the Potomac again on the 14th Street Bridge, runners pass the Pentagon once more on Boundary Channel Drive before crossing the finish line at the Marine Corps War Memorial.

Since 1988, Rolling Thunder has drawn motorcyclists from across the nation to Washington, D.C., annually for a demonstration/protest to bring awareness and accountability for POWs and MIAs left behind. The highlight is Rolling Thunder’s First Amendment Demonstration Run.

The Pentagon hosts thousands of bikers who rally in its parking lots for a Memorial Day ride that crosses the Potomac and follows a designated route through the Mall area of Washington, D.C.

The Army Ten-Miler run has become nearly as well known as the Marine Corps Marathon. Begun in 1985, the Ten-Miler is also run in October. It attracts more than 35,000 runners including military, civilians, wheelchair athletes, and wounded warrior athletes. The 10-mile course starts and finishes at the Pentagon, crossing the Potomac into Washington, D.C., past historic sites including Arlington National Cemetery, the Lincoln Memorial, the Washington Monument, and the Thomas Jefferson Memorial.

The Pentagon’s North Lot hosts a “Hooah Tent Zone” with more than 80 team-sponsored tents. U.S. military commands from around the world gather to support their teams, promote their mission, and promote their “Army Spirit.” Runners and spectators interact with soldiers, experience the esprit de corps, and enjoy the festive activities that the Hooah Tents offer post-race.

 

A Mythical Reality

It’s hard to describe the feeling of living next door to a global landmark, Arlington residents say. For most of the world, the Pentagon is a faraway symbol of America. Locals not directly connected to their five-sided neighbor think of it only in passing. But not infrequently, they, too, are reminded of its importance.

“The Pentagon is an entity like the White House, where pretty much everyone around the world has heard of it in some way,” said AED Public Relations Manager Cara O’Donnell. “It almost has this mythical quality. It’s something I think we, living here, take for granted. To see that enormous five-sided building that they’ve only perhaps read about in social studies textbooks is very interesting to visitors from out of town: ‘Oh, that’s really it, right there!’

“But this is the building where all of our major defense decisions are being made. That’s striking for visitors and for us.”