Austin offered incentives to lure Army HQ. Here’s why Raleigh came up short.

Incentives played a role — but weren’t the only reason — Austin beat out Raleigh for the Army’s new Futures Command Center, an Army official said Friday.

Though Raleigh, Austin and the other three finalist cities all “bent over backwards to help us,” Austin’s bid for the project “scored the highest” when it came to offering the service proximity to STEM workers, private-sector innovators, academia, quality of life and civic support, Army Undersecretary Ryan McCarthy said during a morning news conference at the Pentagon.

Texas officials also offered incentives, and are “working through that now” when it comes to nailing down the details, McCarthy told reporters.

Further details on the Texas incentives were not immediately forthcoming. “At this time there are still some ongoing discussions and we cannot release those details,” said Charissie Bodisch, senior vice president for economic development for the Austin Chamber of Commerce.

But North Carolina had also put incentives on the table, specifically an offer of three years’ worth of free rent for office space on N.C. State University’s Centennial Campus, according to Gov. Roy Cooper’s office.

Recruiters showed the Army a number of spaces around the Triangle, notably in RTP, but service officials were most interested in options on Centennial Campus and meetings with the Army late in the recruiting process occurred at the Hunt Library.

N.C. State spokesman Mick Kulikowski confirmed that Centennial Campus had figured in the search, and N.C. Military Foundation Executive Director Stuart Ruffin likewise said there “was a strong push for Centennial” as the search evolved and Raleigh moved further up the Army’s list of finalists.

“What they were looking for generally is somewhere they could be in the thick of things, somewhere they could be right next to the innovators so they didn’t need to get in the car and even drive 10 minutes for lunch,” Ruffin said.

Centennial fit the bill because it already has dozens of research institutes, private-sector companies and federal-government operations on site, he said.

Recruiters had also pointed the Army to The Frontier, an RTP office complex that houses the Army Research Office and that, Ruffin said, offered a “similar setup.” It’s on N.C. 54 in Durham County near the Interstate 40/Durham Freeway/Triangle Expressway interchange.

Ruffin said “it’ll be interesting to see what the Texas incentives wind up being,” given that the Army’s mantra “from the start was that this is not about incentives or dollars, it’s about speed.”

A gift of office space or free rent helps the Army get around procurement rules that otherwise could slow the establishment of the headquarters, Ruffin said, noting that service leaders announced their plan to form it only last October.

“The timeline they’ve got to stand this thing up is mind-blowing,” Ruffin said. “Nine months ago, we got an announcement of a new four-star command, and it became real on July 1. That’s nearly unprecedented.”

‘Best foot forward’

The Army Futures Command formally opened for business on July 1 in temporary offices in Crystal City, Virginia, near the Pentagon. The Army wanted to lease office space in one of the finalist cities and after renovations wants the headquarters space ready for full occupancy next summer.

The Army Futures Command will be home to about 500 uniformed and civilian staffers and headed by a four-star general. It is expected to ensure the development of new missiles, cannons, tanks and aircraft for modern warfare.

Friday’s news conference confirmed a decision The News & Observer and other media organizations reported late Thursday after the Army notified advocates of Raleigh, Boston, Philadelphia and Minneapolis that their cities had lost out.

Austin officials were pleased, naturally enough.

“This is a major win for the Austin mega-region,” said Phil Wilson, chairman of the Austin Chamber of Commerce.

In North Carolina, U.S. Sen. Thom Tillis, a Republican, and U.S. Rep. David Price, D-Chapel Hill, both said they were disappointed by the news.

“Over the last few months, North Carolina’s Congressional delegation and state leaders have worked together to submit our strongest proposal possible,” said Tillis, who helped orchestrate some of the key behind-the-scenes meetings that shaped the bid. “It is a testament to the strength of the Research Triangle’s business, academic, and military communities that Raleigh was considered in the final round after the Army received applications from major cities across the country.”

Price noted that “North Carolina is a growing hub of technological innovation as well as the home to the Army Research Office and one of the largest military populations in the country.” He added that he’ll “continue to advocate for robust federal investment in our state.”

Cooper said North Carolina had “put its best foot forward” and shown again that the Triangle is “a national leader for technology, innovation and entrepreneurship.”

He and his office praised the state’s Congressional delegation, local officials in Wake and Durham counties, the UNC system and its local branches, Duke University, the Military Foundation and other executive-branch and economic-development agencies for working together to try to land the headquarters.

“We got to know each other really well, and I think these relationships will be enduring and productive,” said Kathie Sidner, the UNC system’s director of defense and military partnerships. “

Larger tech sectors

Army leaders from the start said they wanted to put the new headquarters in a city with a good mix of academia and industry.

The finalists emerged from a search that initially looked at 30 cities. A “ground team” scouted each for office space before McCarthy and Futures Command task force chief Lt. Gen. Eric Wesley visited them for a last look.

That last meeting with McCarthy and Wesley took about a day, with the pair asking “tough but reasonable questions” about the concentration here of corporate and academic resources that can contribute to work on the Army’s six modernization priorities, Sidner said.

McCarthy also told them the Army was looking closely at the levels of investment in the innovation hubs in each of the cities. On Friday, McCarthy said each city has incubators “where you walk into a room and they have a sea of laptops,” with people using them who are both willing to work with and challenge big corporations.

The Army’s looking for the kind of innovation that before World War II saw a small, unknown company called American Bantam design the vehicle that, once mass-produced by larger firms, became the iconic jeep, he said.

But when it comes to investing in such hubs, Austin and Boston are established players with start-up tech sectors that for the moment are perhaps larger than the Triangle’s, Sidner said.

The Triangle’s is “growing at a faster rate,” which allows recruiters to argue that “if you’re looking at the future, the future is here,” she said.

Again, though, speed was a factor for the Army.

“We do not have time to build this ecosystem,” McCarthy said Friday. “It needed to be ready immediately.”

Austin also shared the Triangle’s major advantages, which along with the tech sector are a cluster of top-level universities and proximity to a major Army base in Fort Bragg.

Local officials acknowledged from the start that Austin — home of the University of Texas, a high-flying tech sector of its own and a relatively short drive away from Fort Hood — would offer stiff competition.

Along with Boston, “we always viewed them as our top competitors,” Sidner said.

It’s likely the competition was “razor-thin there at the end,” Ruffin said, adding that officials do want to check back with the service in the coming weeks to find out how they thought the Triangle matched up.

But the overall evaluation process appeared sound, he said.

“When you get down to the top five, just about every one of those made sense,” Ruffin said. “If there was some weird, no-name town in there that was that clearly politically motivated, we’d have felt different about it. But the list they came up with is a testament to the process they used.”

Zachery Eanes and Brian Murphy contributed to this report.

Related stories from Raleigh News & Observer