State vies with D.C., Virginia for Nextel Headquarters move may bring 250 jobs

March 13, 1996|By Jay Hancock | Jay Hancock,SUN STAFF

Nextel Communications Inc. will move its national headquarters to the Washington metropolitan area, setting up a contest among Maryland, Virginia and the District of Columbia for the 250 to 300 jobs it will bring.

A wireless communications company for businesses, Nextel will staff the facility partly with managers from its offices in Rutherford, N.J., Lafayette, Calif., Atlanta and Denver. But it expects to do some hiring, too.

The Washington area "is becoming a center of gravity for telecommunications and networking companies," said Daniel F. Akerson, Nextel's new chairman and chief executive officer.

The region also yields talented labor, affordable real estate, proximity to regulators and "favorable tax incentives for businesses," Nextel's written announcement said.

Last fall, Nextel said it would move its headquarters from Rutherford to the Seattle area. Cellular-phone tycoon Craig McCaw, who last year agreed with his family to invest as much as $1.1 billion in Nextel, is based near Seattle.

But before the move was made, Nextel hired Mr. Akerson, who has roots in the Washington area.

Mr. Akerson, named Nextel's leader last week, is the former president and chief operating officer of Washington-based MCI Communications Corp. He is working out of Nextel's Washington office and owns a house in McLean, Va.

"Craig McCaw sent out a memo Friday afternoon that said, guess what, the headquarters is going to be in Washington," said Richard Read, a financial analyst who follows Nextel's publicly traded stock for Arnhold & S. Bleichroeder Inc. in New York. "It indicates a shift from a more entrepreneurial group of guys to a more serious approach."

Until last summer, Mr. Akerson, 47, was chief executive of General Instrument, a Chicago-based company that develops cable-TV set-top boxes. He is a 1970 graduate of the U.S. Naval Academy in Annapolis.

Of his Virginia home, "I won't say it wasn't a factor" in the headquarters move, Mr. Akerson said. But, he added, the decision was made after close consultation with Nextel officials.

"I would challenge anybody to come up with a better location [for a telecommunications company]," he said. "There is an awful lot of expertise and experience here."

Nextel said it will begin looking for headquarters office space in the Washington area immediately and expects to complete the move by midsummer. Its search in Maryland will be focused on western Montgomery County, Mr. Akerson said.

Maryland officials contacted Nextel this week, said Charles Porcari, spokesman for the Department of Business and Economic Development.

Any assumption that the state will offer financial incentives to lure Nextel is "speculative," Mr. Porcari said, adding, "we're willing to discuss whatever options may be appropriate."

Morgan O'Brien, Nextel's founder and former chairman, agreed to become vice chairman to make room for Mr. Akerson.

Mr. O'Brien built Nextel by collecting a hodgepodge of two-way radio dispatch systems across the country. His original idea was to compete directly against cellular-phone vendors, who operate nearby on the electromagnetic spectrum.

Recently, though, Nextel has decided to concentrate on the business market, selling its systems to companies that need to link mobile workers.

The company operates under the names Nextel, Dial Call and OneComm. "Craig McCaw's obviously a genius," Mr. Read said. "I think they're making really good progress in improving their handsets. They continue to iron out the bugs in their technology. But I think it's a little too early to be invested in it."

In 1994, Nextel reported a net loss of $147.7 million on revenue of $102.7 million. Results for last year have not yet been reported, but Mr. Akerson said yesterday that he expects the company's revenues to be around $250 million.

Pub Date: 3/13/96

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