(Updated at 10:35 a.m.) After months of breathless speculation, Amazon has made it official and announced that it is coming to Arlington — but the county isn’t alone in winning the tech giant’s second headquarters.
The tech giant announced today (Tuesday) that it will split its $5 billion investment for an “HQ2” between Crystal City and Long Island City in Queens, confirming earlier reporting of the last-minute switch. Nashville will also receive 5,000 jobs as part of the arrangement.
A press conference has been scheduled for 1:30 p.m. in Pentagon City.
Amazon will now set up roughly half of the new headquarters on a site in Crystal City a bid championed by state and county officials, as well as JBG Smith, the region’s biggest real estate owner.
In a press release, Amazon dubbed the site as “National Landing.” A county spokeswoman tells ARLnow that “National Landing” refers to the Crystal City, Pentagon City and Potomac Yard area, which together will make up the footprint of Amazon’s local campus. A map included in the announcement also refers to the Rosslyn-Ballston corridor as “Downtown Arlington.”
More from Amazon’s announcement:
As part of Amazon’s new headquarters, Virginia and Arlington will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with the opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of $3.2 billion over the next 20 years as a result of Amazon’s investment and job creation.
Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted high-paying jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.
The community and Amazon employees will benefit from the Commonwealth investing $195 million in infrastructure in the neighborhood, including improvements to the Crystal City and the Potomac Yards Metro stations; a pedestrian bridge connecting National Landing and Reagan National Airport; and work to improve safety, accessibility, and the pedestrian experience crossing Route 1 over the next 10 years. Arlington will also dedicate an estimated $28 million based on 12% of future property tax revenues earned from an existing Tax Increment Financing (TIF) district for on-site infrastructure and open space in National Landing.
“This is a big win for Virginia – I’m proud Amazon recognizes the tremendous assets the Commonwealth has to offer and plans to deepen its roots here,” said Governor Ralph Northam of Virginia. “Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century, and I’m excited to say that our innovative approach was successful. The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure that will bolster the features that make Virginia so attractive: a strong and talented workforce, a stable and competitive business climate, and a world-class higher education system.”
“We are proud that Amazon has selected National Landing for a major new headquarters. This is, above all, a validation of our community’s commitment to sustainability, transit-oriented development, affordable housing, and diversity,” said Arlington County Board Chair Katie Cristol. “The strength of our workforce coupled with our proximity to the nation’s capital makes us an attractive business location. But Arlington’s real strength is the decades of planning that have produced one of the most vibrant, civically engaged communities in the world. Those plans have paved the way for this investment, and we look forward to engaging the Arlington community about Amazon’s plans and how we can grow together.”
JBG Smith owns huge swaths of property throughout the neighborhood, which was long thought to be a key factor in Arlington’s favor. The company has launched a new website in conjunction with the announcement: Nationallanding.com.
Crystal City’s high office vacancy rate, long a thorn in the side of county leaders that will now be alleviated virtually overnight, also provided plenty of open space for the company to work with as it plans a new campus.
While communities across the country were vying to earn HQ2 as part of an unusual public bidding process, the D.C. region was widely viewed as a favorite to earn Amazon’s new headquarters after the company listed Northern Virginia, Maryland and D.C. among its 20 finalists in January. Even still, the company announced late in the process that it would seek to split HQ2, noting that executives didn’t believe that any of the finalists had enough “tech talent” to fill the contemplated 50,000 jobs for the new offices.
Arlington was long viewed as a particularly strong contender after the county submitted both the Crystal City site and locations along the Rosslyn-Ballston corridor for consideration. Amazon officials subsequently toured those locations this spring, and even linked many of its employees to a particular ARLnow article about the county’s environmental accolades.
With the decision finally made, Arlington officials will now have to grapple with the impact of the company’s arrival — especially now that the company won’t be bringing quite the same investment as it originally promised.
The rosiest estimates of HQ2’s impact suggest the company will create a “prosperity bomb” in the region, offering tens of thousands of high-paying jobs and filling up the coffers of local governments.
But many critics have spent months warning that HQ2’s arrival could exacerbate many of the problems already plaguing Arlington. They reason the arrival of so many wealthy Amazon workers could cause housing prices to skyrocket and make it virtually impossible for low-income people to afford to live in the area, or even strain the region’s already challenged transit systems.
Others still worry that the county has offered a series of lucrative tax breaks and cash incentives to the company, dampening whatever economic benefits HQ2 may offer — the county has steadfastly refused to offer any details of its offer to Amazon, as the company has sworn HQ2 bidders to secrecy. There’s also no telling if the county and state might look to revise its incentive offer, now that Amazon has split up HQ2.
County officials have long insisted that they’re prepared to meet these challenges, however, and with Apple still weighing its own move to Arlington, it seems quite likely that such conversations will dominate their attention in the coming months.
Arlington County and the City of Alexandria trumpeted the selection in a joint press release issued shortly after Amazon’s announcement.
The press release says Virginia Tech will now establish an “Innovation Campus” in Alexandria near the new headquarters, while Arlington and Alexandria public schools will “have access to new resources related to computer science education, to be made available statewide” and George Mason University’s campus in Virginia Square will expand. Also funded thanks to Amazon’s arrival: the long hoped-for second entrance to the Crystal City Metro station and a new High Line-like pedestrian bridge from Crystal City to Reagan National Airport.
(more…)
