Amazon

Morning Notes

By ARLnow.com

County Officials Defend Amazon FOIA Deal — “The Arlington government’s top attorney says there’s nothing improper about part of the county’s incentive deal with Amazon that gives the company notice of Virginia Freedom of Information Act filings related to the agreement.” [InsideNova]

Pedestrian Struck in Virginia Square — Police, firefighters responded to a pedestrian struck by a vehicle on Wilson Blvd at N. Oakland Street Tuesday morning. The vehicle was turning and struck the pedestrian, who suffered minor injuries, we’re told. In Arlington, pedestrian-involved crashes like this are common, occurring almost every day, though most — like this incident — result in non-life-threatening injuries to the victim. [Twitter]

Smoke Fills Lee Highway Building — Firefighters responded to an under-construction commercial building on the 5800 block of Lee Highway yesterday afternoon to investigate smoke in the building. It was determined that the smoke came from a malfunctioning HVAC unit. [Twitter]

What Local Startups Think About Amazon’s Imminent Arrival

By ARLnow.com

Sponsored by Monday Properties and written by ARLnow.com, Startup Monday is a weekly column that profiles Arlington-based startups and their founders, plus other local technology happenings. The Ground Floor, Monday’s office space for young companies in Rosslyn, is now open. The Metro-accessible space features a 5,000-square-foot common area that includes a kitchen, lounge area, collaborative meeting spaces, and a stage for formal presentations.

With the local and state economic incentive packages now approved, it appears to be all systems go for Amazon’s arrival in “National Landing.”

The company has been planning a gradual build-up of its presence in Arlington, with 400-500 jobs expected in the first year of “HQ2,” but 25,000 or more jobs expected to be created here within 12 years. Amazon will initially lease temporary office space in Crystal City, but will build the bulk of its local presence at sites near the Pentagon City Metro.

Amazon’s impact on housing prices has been subject to some debate, though generally HQ2 is expected to bring higher housing costs to Arlington and the region.

Amazon may also have impact on businesses, particularly local startups and tech companies. The tech and retail giant, for instance, might drive up office rents and employee salaries, and might make it harder to recruit technical talent.

We asked a number of local startup founders what they thought of Amazon’s impending arrival and most said they were looking forward to it, but with some apprehension.

“I’m mildly optimistic, though having seen some of the impacts of tech companies booming in San Francisco and Seattle (increased homelessness, drug use and local economy challenges) I’m also a bit nervous,” said Joanne Sonenshine of Connective Impact.

“For my business, which helps companies partner with social impact programs, having Amazon locally is a good thing, so we can advance their social investments to benefit our local and global economic development through their supplier and partner investments,” Sonenshine continued. “I’m hopeful that Amazon will be also be a thoughtful neighbor, however, and consider how their actions impact those of us living around them. I’m… encouraged that a focus on education and technology will also benefit our local schools.”

JJ Linser of L2Platforms struck a similar tone.

“I am cautiously optimistic about Amazon coming to the [area],” Linser said. “From a cultural standpoint, I think their presence will attract even more talented software developers… which will result in a larger and more diverse community of local devs.”

“I think all companies in the software business could benefit off this, because it will give [D.C. area] devs more resources to take advantage, such as more people to exchange experiences and ideas with, which will result in an overall more talented and diverse workforce,” he added. “From a business perspective, I think it could create more opportunity for local software shops to partner and collaborate with Amazon.”

Chase Damiano, COO of Arlington-based Commonwealth Joe Coffee Roasters, says he is particularly excited about having chosen Pentagon City for the company’s flagship location. The cafe at 520 12th Street S. is right across the street from Amazon’s future Pentagon City campus, and Damiano expects Amazon employees to be among his top customers.

“I’m excited for Amazon to come,” Damiano wrote. “It’ll bring more energy to Crystal City/Pentagon City. At a recent town hall in Arlington, Amazon representatives commented they design their offices to ‘nudge’ their employees into the surrounding community. I believe Amazon can bring more business to craft coffee houses like us.”

Jean Jacques Borno, founder of Crystal City-based financial planning app startup 1787fp, thinks Amazon will be a net plus for his company in a number of ways.

“Amazon HQ2 is great for local startups, Arlington, the state of Virginia, and the overall Washington, D.C. economy,” Borno said. “The Amazon move helps establish Washington, D.C. as an emerging technology hub.”

“I am not sure how the Amazon move will directly impact my startup,” Borno added, “but I think it can help us recruit more employees to the area.”

Morning Poll: What Do You Think of the Amazon Decision?

By ARLnow.com

Over the weekend, the Arlington County Board voted unanimously to approve an incentive package that will help bring Amazon and its expected 25,000 or so jobs to the Pentagon City and Crystal City areas.

The approval followed impassioned public testimony from about 100 speakers.

Those in favor of the incentives, which include an estimated $23 million over 15 years from an expected rise in hotel tax revenues attributable to Amazon’s presence, says it’s a small price to pay for one of the biggest economic development prizes in a generation. Amazon, proponents say, will bring thousands of good jobs to the area and act as a magnet for other employers considering their next destination.

Those against the incentives say sending any tax revenue to one of the world’s largest companies, led by the world’s richest man, is a particularly egregious form of “corporate welfare.” That’s doubly so given Amazon’s oft-criticized treatment of its warehouse workers and the effect the company is having on brick-and-mortar retailers, critics say. Also, Amazon’s arrival may bring with it higher housing prices that could push out lower-income residents.

In the end, the Board decided that the benefits outweighed any potential negatives. Do you think they made the right decision?

BREAKING: County Board Approves Amazon Incentive Package

By Airey
1/5

(Updated on 3/18/19) Arlington officials have unanimously approved an incentive package offered to lure Amazon to the county, after hearing impassioned public testimony both for and against the tech giant’s “HQ2” plans.

The vote clears the way for the company to officially begin developing the site as early as this year.

The Arlington County Board voted 5-0 to approve the incentive plan after Board’s regularly-scheduled Saturday meeting stretched on for nearly twelve hours and disruptions from angry protestors continued until Chair Christian Dorsey called multiple recesses to quell the shouting.

Board member Libby Garvey acknowledged over booing that the incentive plan was “not perfect” but said it was “overwhelmingly” good for Arlington.

Board Member Erik Gutshall said “would not vote for anything that was not a clear and overwhelming win for Arlington.”

After Amazon representatives were ushered into a back room during an earlier outburst, Board members sat back on the dais and spoke for a few minutes about the tensions in the room, which was quiet for the first time that day.

“What I’m sensing is a real concern about loss and vulnerability,” said Dorsey, who noted that “the history” of Arlington neighborhoods was that of gentrification. “We never really had a way to stop it. I know it’s maybe attractive to thinking saying no to Amazon stops it. It doesn’t.”

Protests continued after the back-and-forth, with shouts of “shame!” peppering the Board members’ final remarks on the dais. Longtime D.C. protestor Chris Otten was escorted out and arrested after an expletive-ridden tirade aimed at the Board.

The incentive package grants an estimated $23 million in incentives to Amazon over the next 15 years if the company fills 6 million square feet of office space by 2035. It also includes a plan to fund $28 million in transportation upgrades near Amazon’s headquarters over the next decade via use of Crystal City’s Tax Increment Financing district.

The Board’s vote came after nearly five hours of public comment from more than 100 people. County staff said it was first time they’ve allowed speakers to sign-up ahead of time in a bid to control crowding.

The Board also questioned Amazon’s head of economic development Holly Sullivan.

Board members Katie Cristol and Dorsey both asked how Amazon planned to enforce labor laws in light of the subcontractor electrical Power Design, which is likely to help build the headquarters and is currently being sued by the D.C. Attorney General for “cheating” wages from 535 employees.

Sullivan responded that the company has had one meeting with a “building trade” and is working to “develop a workforce agreement.”

One of Arlington’s state legislators, Del. Mark Levine, told ARLnow he wanted the Board to delay their vote because he’s “become concerned” that Amazon still hasn’t agreed to that labor commitment.

“The fact that they’re not willing to sign even a memorandum… makes me concerned that they’re not going to be fair to their workers,” said Levine, echoing concerns from electrician and construction unions that testified earlier today.

Amazon also drew criticism for potentially shrinking affordable housing in the region which is already squeezed. Several landlords and real estate firms expressed support of the company locating to Pentagon City and Crystal City, but other speakers shared worries that rent prices are already rising.

“When we have community that isn’t transient, that has staying power, we have a stronger community.” said Page Cooper, who said her 13-month lease shrunk to 8 months when it came time to renew last year.

Supporters said the economic growth from Amazon’s promise of 25,000 is sorely needed. It’s also a number Dorsey has said could increase in light of Amazon cancelling its plans for a second headquarters in New York City.

The county “needs these jobs” and that is “well positioned to integrate Amazon,” due to the area’s public transit system, said Chuck, Executive Director of the Metropolitan Washington Council of Governments.

Steve Cooper, a board member at the Arlington Chamber of Commerce, compared Arlington — long a community with government as its top employers — to his hometown in Detroit.

“Detroit has suffered from being a one-industry town now for six decades,” he said, adding, “Arlington will never be Detroit because we have a chance to diversity.”

The crowd was roughly equally split between those for and against the incentive package — and Board Chair Christian Dorsey repeatedly tried to quell laughter and applause, with emotions running high as the day wore on.

Douglas Park resident Kinsey Fabrizio was praising the board for its “public outreach” when loud laughter from activists, who criticized what they described as lack of community input, drowned out the rest of her testimony.

“This is not WWE,” Dorsey said as he quieted the crowd.

(more…)

Here’s What You Need to Know Before Saturday’s Amazon Incentive Package Vote

By Airey

The County Board is poised to pass a controversial incentive package for Amazon this Saturday, which could help bring tens of thousands of jobs and millions in added property taxes to Arlington County, at the cost of tens of millions in tax subsidies for one of the world’s largest companies.

The Board is scheduled to vote on the multi-million dollar incentive package during their regularly-scheduled Saturday meeting, which is Amazon’s last hurdle to clear before beginning development on their new headquarters slated to start construction in 2021.

The meeting begins at 8:30 a.m. at the Bozman Government Center in Courthouse, however, the Amazon part of discussion isn’t scheduled to start until after 1 p.m., per an agenda summary and the hearing is expected to be dogged with public protest from critics opposing Amazon.

The county’s incentive package was first publicly released earlier this month and features a 15-year, estimated $23 million incentive given to Amazon if the tech-and-retail giant meets office space occupancy goals over several years. The company would need to fill 60,000 square feet of office space starting in June of 2020 and meet benchmarks towards occupying 6 million square feet by 2035.

The incentive is funded from a portion of the increases in hotel tax revenue that officials predict from Amazon’s “HQ2” moving to the region.

The incentive package up for a vote Saturday also includes plans to spend $28 million over a period of 10 years to update infrastructure around the proposed headquarters, in addition to the state’s multi-million-dollar contribution. That money will be pulled from a portion of the increase in commercial property tax revenue in the Crystal City area that results from Amazon’s arrival.

The county also offered to at least try to fulfill Amazon’s request for an on-site helicopter pad on-site despite residents’ ongoing complaints of existing helicopter noise and the region’s strictly-enforced no-fly zone.

Amazon announced it selected Arlington as the site for its second headquarters in November, promising to bring at least 25,000 jobs and occupy 6,056,000 million square feet of commercial space in the Crystal City and Pentagon City areas, which have experienced high vacancy rates for the last 15 years.

County Board Chair Christian Dorsey said in February the expected number of Amazon jobs is now higher because the company cancelled its other headquarter plans in New York City.

The incentives have drawn persistent criticism from activists who believe the county shouldn’t be giving any incentives to a company run by the world’s richest man — and who fear its relocation to Arlington will exacerbate the county’s affordable hosing shortage. Critics have also raised red flags about a portion of the agreement that gives Amazon advance notice of FOIA requests.

On Friday, local activist coalition “For Us, Not Amazon” announced a noon protest outside the county government steps on Saturday before the vote.

“While the County tries to ignore us, For Us, Not Amazon has been doing the real community engagement, knocking doors, listening to community members’ concerns and it’s time to make sure Arlington County officials listen to every one of us before this sham gets voted on,” the description of the rally reads.

The head of Arlington’s Chamber of Commerce argued the package was a “good deal” for the county in a Thursday op-ed on ARLnow, writing that “focusing on the Transient Occupancy Tax means that taxes on Arlington residents and businesses will not fund these incentives and that Amazon will receive these payments only if our hoteliers grow their businesses too.”

For Us, Not Amazon’s member organizations knocked on doors earlier this week to gather petition signatures opposing the incentive package.

On Monday, 30 advocacy and community organizations — including the Nauck Civic Association and the Arlington NAACP, among statewide and regional groups — signed a letter requesting the County Board “postpone the vote on incentives and hold public hearings to foster transparency and understanding.”

The Board originally planned for a February public hearing and vote on the incentives but rescheduled to March, citing the need for more community discussions.

Saturday’s vote does not include the state’s $750 million-incentive package to Amazon, which the Virginia General Assembly overwhelmingly approved in January.

This weekend’s Board meeting will also not include ideas county officials pitched Amazon but didn’t officially include in the incentive package — such as suggesting Amazon take advantage of a little-used technology incentive program to potentially save millions in taxes, as first reported by ARLnow.

Morning Notes

By ARLnow.com

Baby Boy for Cristol — Arlington County Board member Katie Cristol gave birth to her first child, a baby boy, this past weekend. She plans to call in to Saturday’s County Board meeting and participate in the crucial Amazon incentive package vote. [Twitter]

Building Plans for Temporary Amazon Office — JBG Smith “submitted plans March 7 to make common area improvements throughout the 12-story, 221,000-square-foot [office building at] 1800 S. Bell St., to be leased in full by Amazon.” [Washington Business Journal]

County May Change Building Plan Practices — “Arlington officials are considering ending same-day viewing at the Department of Community Planning, Housing & Development after a Washington Business Journal reporter asked to view a permit for a building Amazon.com Inc. is expected to lease, said Ben Aiken, director of constituent services in the county manager’s office.” [Washington Business Journal]

VRE Plans Moving Forward — “Virginia Railway Express is moving forward with plans to build an expanded Crystal City Station, a key step needed to expand and improve service. The VRE Operations Board is due to vote Friday to allow contracting to move forward for engineering work based on the already approved concept design.” [WTOP]

New Leases in Rosslyn — Earlier this week Monday Properties announced the signing of three lease deals at 1100 Wilson Boulevard, one half of its Rosslyn twin towers. The firms leasing new space are The Health Management Academy and Trilogy Federal LLC, while WJLA owner Sinclair Broadcasting is expanding its existing space. [Monday Properties]

Extensive Road Closures Saturday — Expect a number of road closures in Courthouse, Rosslyn and near the Pentagon Saturday morning for the annual Four Courts Four Miler. [Arlington County]

Nearby: Gentrification Fears in Arlandria — “Concern of rising rents and gentrification have always been present in the Arlandria neighborhood, which sits between South Glebe and West Glebe roads and ends at Potomac Yard. Amazon.com Inc.’s plan to move to nearby Arlington has only intensified those worries.” [Washington Business Journal]

Letter to the Editor: Amazon is a Good Deal for Arlington, Chamber of Commerce Argues

By ARLnow.com

The following Letter to the Editor was submitted by Arlington Chamber of Commerce President Kate Bates, who writes in support of passing the county’s incentive deals made to motivate Amazon to open its new headquarters in Crystal City and Pentagon City.  

The Chamber is a non-profit which advocates for 750 county businesses and organizations, which includes Amazon as of December. The Chamber has written several letters to County Board members and the Virginia General Assembly over the last year in support of bringing Amazon to the region, and to urge officials to pass state and local tax incentives. 

The County Board will vote on Saturday for their incentive package finalizing Amazon’s plans to move to area.

It’s an exciting time for Arlington. On Saturday, the County Board will vote on the performance agreement for Amazon’s headquarters. Approving this agreement is a powerful statement that Arlington is open for business and we are no longer solely a government town, but a magnet for innovation in all sectors. Welcoming Amazon to Arlington will create opportunities for residents and businesses. The community as a whole will benefit from the jobs, economic activity, and innovation that Amazon will bring to Arlington. The performance agreement is a good deal for Arlington.

Economic Well-being

Amazon’s commitment to Arlington will provide us with balance; adding business diversity will strengthen our local economy. The job losses from BRAC and sequestration, and the uncertainty of the recent shutdown have shown that we cannot rely on the Federal Government alone for our prosperity. Amazon gradually adding 25,000-37,850 private-sector jobs will replace the 24,000 federal and contractor jobs lost in the Crystal City area over the past two decades.

Amazon’s presence will solidify Arlington as an innovation hub. Having Amazon as an anchor will help Arlington and Northern Virginia attract innovative companies. A robust job market will provide opportunities for our young people to succeed here, in the community where they are growing up and getting their education. Our local businesses expect Amazon’s arrival and the resulting diversification in our local economy to help them thrive.

Incentives

Arlington Economic Development crafted a groundbreaking incentive package that truly invests in Arlington’s future. The overwhelming majority, 95%, of the Arlington incentive package comprises investments in our community through housing, transportation, and infrastructure. The incentive payment to Amazon, the other 5%, depends Amazon hitting their established benchmarks for office space.

The direct financial incentive to Amazon is funded through a fraction of the growth in the Transient Occupancy Tax, a tax paid by guests staying in Arlington’s hotels. Tying Amazon’s direct incentives to revenue growth ensures that payments will not divert money from other priorities. Focusing on the Transient Occupancy Tax means that taxes on Arlington residents and businesses will not fund these incentives and that Amazon will receive these payments only if our hoteliers grow their businesses too.

Community

In the months since the announcement, Amazon has shown they want to be a part of the Arlington community. Amazon is already engaging, joining the Chamber and meeting with businesses, nonprofits, and community groups to build long-term relationships. Amazon’s Director of Community Engagement met with more than 50 leaders from Arlington nonprofits at a Chamber-hosted gathering, and senior Amazon team members have attended many community events. Amazon’s culture values making direct change; we look forward to the prospect of thousands of innovative people participating in our community.

The Amazon headquarters announcement has focused Arlington on our transportation, housing, and school funding challenges, all of which predate Amazon. The redevelopment of the Crystal City area will bring the transportation infrastructure improvements and amenities envisioned in its sector plan. Approving this agreement will help secure Arlington’s fiscal health and provide tax revenues to help the community address these challenges.

This is an historic moment for Arlington. The establishment of Amazon’s headquarters offers Arlington a unique occasion to strengthen our economy, to create opportunities for residents, and to improve the County’s fiscal position. We look forward to working together as a community to seize the opportunities that welcoming Amazon affords to all of Arlington.

ARLnow.com occasionally publishes thoughtful letters to the editor about issues of local interest. To submit a letter to the editor for consideration, please email it to [email protected]. Letters may be edited for content and brevity. 

Morning Notes

By ARLnow.com

Free Amazon Mugs at Northside Social — Amazon is partnering with Northside Social to give out free branded to-go tumblers this morning. [Instagram]

Kojo Explores the Amazon Effect — “We’ll look back on Seattle’s history with Amazon and discuss how our local governments can navigate their relationship with the company. Plus, we’ll hear from a policy researcher on how the DMV’s housing market will shift over the next two decades as Amazon gets settled in the region.” [Kojo Nnamdi Show]

Amazon’s Tech Effect — “Within the [D.C.] area’s tech industry – the sector likely to be most affected by the [Amazon] news – leaders are either keeping mum about their reaction or publicly expressing excitement. But behind the scenes, experts say, there is a fair amount of apprehension.” [U.S. News]

Metro to Subsidize Late Night Uber Rides? — “With Metro hours due to remain limited for the foreseeable future, Metro plans to pay cabs or a company like Uber or Lyft $1 million to slightly discount trips for certain people rather than provide alternative bus or other service.” [WTOP, WMATA]

737 Max Grounded at DCA — “For people flying in and out of the Reagan National Airport, Wednesday’s grounding of all 737 MAX 8 and MAX 9 jets brought mixed reactions. Some flights were cancelled. Others were already in the air when the emergency order came down, and were grounded the moment they touched down.” [WJLA, NBC 4]

‘Poo’ at Wakefield High School — Arlington Public Schools has been slow to fix a direction sign at Wakefield High School that is missing the “L” in “pool.” [Sun Gazette]

Photo courtesy Dennis Dimick

Peter’s Take: Moving Arlington Closer to Environmental Sustainability

By Peter Rousselot

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

As Arlington continues to prepare for Amazon’s arrival, justified concerns have been raised about the impact of Amazon’s coming here on our environment, our parks, and our schools.

Concerns relating to the environment take place in the context of a Virginia legal system that reserves to the state, rather than municipalities like Arlington, many decisions regarding regulation of products and practices that harm our environment.

Today, I’m focusing on some promising new community initiatives that highlight the environmental threats posed by some of these products and practices. I’m not focusing on whether the appropriate response to any particular environmental threat should be:

  • citizen or regulatory action
  • in Arlington or Richmond
  • some combination of the above

Film screening of “StyrofoamMom” — a locally produced documentary

On Saturday, April 6, from 5:30 to 8:30 pm, a group of organizations are sponsoring a dinner and open-house reception featuring a showing of a locally produced documentary, “StyrofoamMom.”

StyrofoamMom is a name given to Miriam Gennari, an Arlington resident, by Chris Zimmerman, a former County Board member, when she caught him eating from a Styrofoam® container. Gennari ran for School Board in 2013 focusing on environmental stewardship and literacy in Arlington Public Schools.

Gennari has been advocating the Arlington County government for 10 years, asking our government to develop policies and strategies regarding Arlington’s most ignored single-use plastic, expanded-polystyrene. Her hope in sharing the film is that with new student leadership, she can hand the microphone over to the youth of Arlington and the region, to work with government and business leaders to finish the job properly.

Film production

StyrofoamMom was made with critical support from Arlington Independent Media (AIM) and its state-of-the-art studio, video and sound equipment, as well as the talents of hundreds of volunteers. At the event AIM will announce its decision to bestow two local student scholarships. This new “green crew” will be taught filmmaking and will produce environmental films in multiple languages. Students will be trained in studio, field, editing and radio production.

Participating organizations

The dinner, reception, and film are being organized and sponsored by Eco Teen Action Network, supported by Global Co Lab Network and Smithsonian Conservation Commons, together with student environmental clubs, organizations and business leaders.

The Global Co Lab Network is a local Arlington non-governmental organization created to focus experts and stakeholders on youth and their ideas for change.  Utilizing living room gatherings or “Co Labs,” combined with virtual rooms or “Dream Hubs”, the Global Co Lab Network is working with the Smithsonian Conservation Commons to build a local and global network of teens. The Network will showcase its efforts at the 50th anniversary of Earth Day at the Earth Optimism Summit in Washington, DC. in April 2020.

Event host JBG SMITH

The event and film screening will be hosted at a JBG Smith building in National Landing. For JBG Smith, hosting this event demonstrates a willingness to encourage young people’s interest in discussions regarding sustainability. The reported sustainability values expressed by both Amazon and JBG Smith have been driven by consumer demand. With universities investing in the area, bright and creative minds will be coming together to discuss the complexities of building a mega community and the waste and pollution it could produce if not carefully planned.

Conclusion

The Global Co Lab Network is sponsoring the April 6 event to highlight its goal to empower the next generation to address environmental issues.  Arlington has not made this a priority, but it should. Global Co Lab Network has observed that there are very few environmental clubs at schools in Arlington compared to other places. This is unfortunate since we are a county that prides itself on our green environmental culture.

Amazon’s new HQ at National Landing, together with the new talent it has the potential to attract, can bring together a new focus on environmental sustainability and specific plans to achieve it.

Arlington must decide which priorities are most important to it, and how those priorities will be implemented. The April 6 event will combine the new perspectives of young people, veteran activists, and other partners who can work together to make Arlington a green, healthy, sustainable county that will serve as an example in the United States.

More information is available here, here and here. To attend the event, register here.

Peter Rousselot previously served as Chair of the Fiscal Affairs Advisory Commission (FAAC) to the Arlington County Board and as Co-Chair of the Advisory Council on Instruction (ACI) to the Arlington School Board. He is also a former Chair of the Arlington County Democratic Committee (ACDC) and a former member of the Central Committee of the Democratic Party of Virginia (DPVA). He currently serves as a board member of the Together Virginia PAC-a political action committee dedicated to identifying, helping and advising Democratic candidates in rural Virginia.

Podcast: Washington Business Journal Editor-in-Chief Doug Fruehling

By ARLnow.com

Doug Fruehling has had a two-decade career with the Washington Business Journal, assuming the top newsroom job of the Rosslyn-based publication in 2009.

As editor-in-chief, Fruehling has been overseeing WBJ’s coverage of Amazon’s forthcoming HQ2 in Arlington. On the latest 26 Square Miles podcast, Fruehling discussed the ramifications of Amazon coming to “National Landing” and how the subscription-based Business Journal has managed to expand its coverage in the face of news industry struggles.

Also discussed: WBJ’s hiring of current ARLnow editor Alex Koma.

Listen below or subscribe to the podcast on iTunes, Google Play, Stitcher or TuneIn. We used some new recording equipment this go-round, so please forgive the resulting audio glitches — we’ll try to get them ironed out prior to the next episode.

Photo via Washington Business Journal

Amazon Could Avoid Paying Any Business License Taxes in Arlington, Even Without Incentive Program

By Alex Koma

Arlington officials have pitched Amazon on a program to help the company slash its business license tax burden when it sets up shop in Pentagon City and Crystal City — but the county is also admitting that Amazon could avoid that particular tax altogether.

Should an incentive package designed to bring the tech giant’s new headquarters to Arlington win county approval this weekend, Amazon will still be subject to all manner of local levies. In particular, officials are counting on real estate tax revenues from the company to generate an extra $342 million for county coffers over the next 16 years.

But it’s an open question how much in business license taxes — a levy known as the “Business, Professional and Occupational License” tax or “BPOL” — Amazon will actually need to pay. It’s an issue that’s fueled outrage from local Amazon critics, who argue that the county shouldn’t be offering tax breaks to an extremely valuable company owned by the world’s richest man, which has already successfully avoided paying federal taxes for the last few years.

Documents show that county officials have already marketed Arlington’s “Technology Zone” program to the company, an incentive program that could help Amazon slash its BPOL burden by as much as 72 percent for the next 10 years. It’s unclear whether Amazon might qualify for the tax break, but county staff say it’s also a possibility that the BPOL tax might not apply to the company at all.

In a report prepared for the County Board ahead of this weekend’s vote, staff wrote that Amazon “may be classified as a type of company that is not subject to BPOL at all, such as a retailer or wholesaler.” State law does indeed allow for a variety of exemptions to the tax, with organizations from banks to newspapers eligible to avoid the BPOL levy.

Or perhaps Amazon could avoid the BPOL tax because it’s levied on each company’s “gross receipts.” Staff write that “as a corporate headquarters and global company, Amazon may not have gross receipts attributable to the Arlington location,” largely due to where the sales in question might originate.

Christina Winn, director of business investment for Arlington Economic Development, says the county will examine “the point of sale” in making that determination. If the sales happen somewhere other than Arlington, the BPOL tax may not apply to Amazon.

“Taxes are very complicated, especially with these large companies where all their consultants are based in other places,” Winn said. “They’re based here, but they may be on site in some other state.”

Victor Hoskins, the head of Arlington Economic Development, previously told the Washington Post that other companies with large corporate headquarters in the county (like Nestle and Lidl) have avoided the tax for just that sort of reason. He said it “just hasn’t been the case for large global companies” that they’ve been subject to the BPOL rate.

Staff stressed in the report that they haven’t included any BPOL revenues in their projections of the company’s fiscal impact on Arlington, given the uncertainty over Amazon’s eligibility for the tax. Instead, the county has based its revenue assumptions on real and personal property taxes, hotel stay and meals taxes and sales taxes — Arlington is also counting on BPOL taxes from the company’s landlord in Crystal City, developer JBG Smith.

“Because it’s such a big company with many different lines of business, and they don’t know what businesses are coming into the Arlington facility, we just assumed zero for gross receipts,” Winn said. “We just felt like that was the most conservative and responsible way to model this project.”

Amazon will need to sort out these tax questions with county staff, likely involving the commissioner of revenue’s office.

If the company does qualify for the BPOL tax after all, it could still apply for the “Technology Zone” incentive, though that only applies for 10 years, and would slash (but not eliminate) Amazon’s BPOL tax payments.

If the county judges that the business units located at Amazon’s Arlington headquarters have “a primary function in the creation, design and/or research and development of technology hardware or software,” the company would qualify for the tax break. The program has gone relatively unused since it was last updated in 2014 — for full disclosure, ARLnow’s parent company applied for the tax break in 2015, but was rejected, despite approximately 20 percent of the company’s budget being devoted to web design, development and hosting.

“That incentive zone is there for any business, and Amazon can take advantage of it, if they want to,” County Board Vice Chair Libby Garvey said during an interview on WAMU 88.5’s Kojo Nnamdi Show Friday. “So, we’re really treating Amazon — as hard as it is to believe — basically, like any other business. So, we’re not telling them that every other business can make use of this tech zone incentive that we have and you can’t.”

The Board is set to vote on the incentive package at its meeting Saturday (March 16), including the heart of the proposed offer to Amazon: an estimated $23 million over the next 15 years, drawn from a projected increase in hotel tax revenues driven by the company’s arrival.

However, the county has recently conceded that number could go higher (or lower) depending on what sort of impact local hotels actually see in the coming years. Amazon will only be permitted to use that cash on building and furnishing its new headquarters.

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