War on Terror Stokes Demand for Super-Secure Offices

Wed April 20, 2005 - Northeast Edition

HAGERSTOWN, MD (AP) Business is booming for buildings that can keep secrets.

Because of the war on terrorism, offices designed to safeguard data, process classified information and keep conversations private are being leased by federal defense and intelligence contractors in the national capital region as fast as developers can build them, authorities said. Some rooms have walls lined with steel or made of 8-in. thick concrete to meet federal requirements. Other security standards mandate elaborate alarm systems, sound-masking technology and vent grates to block intruders.

The government calls such spaces Sensitive Compartmented Information Facilities, or SCIFs. Developers are building or planning more of them near the National Security Agency (NSA) headquarters south of Baltimore, and at other locations in the region including the Army biodefense laboratories in Frederick and the former Fort Ritchie Army base in the Blue Ridge Mountains, 70 mi. northwest of Washington.

Not since the Cold War has demand for super-secure office space been so strong, said Dennis J. Lane, of Ryan Commercial Real Estate Services. “In the post-9/11 world, it came back with a vengeance,” he said.

Lane, who helps companies locate near the NSA, said that since the 2001 terrorist attacks, tenants have snapped up all available secure office space, leaving “virtually no inventory of ready-to-go SCIF.”

But more is coming. Bill Badger, president of the Anne Arundel County Economic Development Corp. said 500,000 sq. ft. of SCIF recently have come on line or been proposed in the county. Much of it is at the rapidly growing National Business Park near NSA, with tenants including General Dynamics Corp., Northrop Grumman Corp., Computer Sciences Corp., Titan Corp. and Booz Allen Hamilton Inc.

The park’s owner, Columbia-based Corporate Office Properties Trust (COPT), said the 1.7 million sq. ft. of existing office space — SCIF and otherwise — is fully leased. A second phase, with 10 buildings comprising 1.3 million sq. ft., has begun, said Dwight S. Taylor, president of COPT’s Corporate Development Services unit.

“The market’s been very good,” Taylor said. “There’s always been demand for existing SCIF space but clearly, in this current security-conscious environment, the demand has risen.”

Last fall, COPT announced plans for 1.7 million sq. ft. of new office space at the former Fort Ritchie in Cascade. Taylor said some of the buildings would be for defense or intelligence agencies and contractors, with SCIF space available as needed.

The strong demand for SCIF is driven by increased government spending. Federal intelligence spending has grown from $30 billion five years ago to an estimated $40 billion today, said Steven Aftergood, director of a government secrecy project at the Washington-based Federation of American Scientists.

Paul Mauritz, an assistant secretary of the Maryland Department of Business and Economic Development, said that as the NSA work force expands, “they’re tending to push contractors out of their buildings.” That means contractors must find their own secure space.

SCIFs aren’t cheap. Michael Creaney, chief operating officer of The Creaney & Smith Group LLC, a Baltimore contractor, said the most common type of SCIF is a room within a room, with features that can vary widely depending on the security classification of the work to be done there.

Even the most basic SCIF, of drywall construction, costs double the $30-to-$35-per-sq.-ft. price of conventional office space, Creaney said. The highest-security enclosure, essentially a SCIF within a SCIF, can cost $300 a sq. ft., he said.

Such high installation costs have produced innovations such as portable SCIFS — made of materials that can be easily assembled and disassembled — and mobile SCIFs mounted on trailers. SFO To Go Inc., a Sterling, VA-based company, said its mobile SCIFs can be installed in three to seven days compared with the average of 45 days advertised by one builder of permanent SCIF space.

Darryl Rekemeyer, director of the Fort Detrick Business Development Office in Frederick, said SCIF developers are vying for a share of the $128-million National Biodefense Analysis and Countermeasures Center that the Department of Homeland Security will start building at the Army post next year.

Polysonics Corp., a Remington, VA, acoustics-design company with decades of SCIF experience, enjoyed a 30-percent sales increase last year, senior consultant Josh Thompson said. He said the government’s demand for secure acoustical environments has outpaced the company’s forecasts because, despite advances in digital security, some secrets must be discussed in person.

“More and more, people like to have the face time,” Thompson said.

Another company, Columbia-based Essex Corp., has gone from SCIF user — to safeguard its NSA signal-processing work — to SCIF builder by recently buying The Windermere Group, an Annapolis-based design-and-construction firm, for $69.4 million.