economy

Arlington to consider several ways to combat office vacancies this year, starting with looser parking restrictions

By Daniel Egitto
An office building with a leasing availability sign in Courthouse in December 2022 (via Google Maps)

Several measures designed to combat Arlington’s persistently high office vacancy rate are slated for discussion next month.

On the table are expanded opportunities for shared and offsite parking, as well as more lenient parking requirements for fitness centers. Officials are also set to consider whether to allow large media screens for outdoor entertainment in some business districts.

The Arlington County Board is scheduled to vote next month on whether to advertise requests to amend Arlington’s zoning ordinance to make these changes. County Manager Mark Schwartz told the Board last week he hopes that these and other ordinance changes can make it easier for Arlington businesses to get started and grow.

“Very often you’ll have a business that, if it could take advantage of parking very near to it, would be able to move ahead,” he said on Tuesday.

Schwartz noted that fitness centers have particularly strict parking requirements.

Large media screens, meanwhile, could assist with “placemaking” in certain commercial business districts. Currently, it’s an exceptionally arduous process to get large outdoor displays approved.

The county also plans to pursue bigger-picture ordinance changes, Schwartz said. Later this year, the Board is expected to discuss guidance on office-to-apartment conversions as well as potentially simplifying the major and minor site plan amendment process, which landowners must navigate when repurposing or renovating large development projects.

Within the next six months, Board members are also expected to consider plans to facilitate change of use within existing buildings and adopt a more flexible ordinance around signage.

Other possible ordinance changes concern storage uses at office buildings as well as the process for converting underutilized parking spaces.

“We promised we’d be coming to you with sort of a regular rhythm of items, and starting next month we will do that,” Schwartz told officials.

Arlington’s office vacancy rate is currently just over 22%, the county manager said — up from 21.5% in October. Arlington Economic Development predicted in October that this number would continue to rise, as about a quarter of Arlington office space is at risk of sustained vacancies.

The county has scrambled to find uses for its office buildings since the pandemic, passing several zoning changes on a compressed community engagement timeline. Recent adjustments allow urban farms, breweries and podcast studios to move into older office buildings without seeking special permissions.

Despite these efforts, a shrinking commercial base has left Arlington residents shouldering a growing portion of the county’s budget. Historically, the commercial and residential tax base split the budget 50-50 but in recent years, this has shifted to a 55-45 split.

Board member Matt de Ferranti last week called office vacancies “a huge challenge” and praised ongoing efforts by county staff.

“I think it is important to reiterate strong support for the direction we are going in,” he said.

Photo via Google Maps

County says it needs new policies to tackle rising office vacancy rates

By Jo DeVoe
A partially vacant office building in Courthouse in December 2022 (via Google Maps)

(Updated at 12 p.m. on 10/19/23) County leaders say Arlington is facing a grim future due to its rising office vacancy rate, which now stands at 21.5%.

Arlington is leading the region with its vacancy rate, which works out to 9 million square feet of empty space, according to Arlington Economic Development Director Ryan Touhill. He predicts the vacancy rate will continue climbing, as AED has determined about one-quarter of office buildings are at risk of sustained vacancies.

Compounding the vacancy issues, many leased buildings have space available for sublease and significantly lower rates of people going into the office, according to Arlington Economic Development Commission.

These conditions are set to have serious impacts on Arlington County’s future budgets, with County Board members and County Manager Mark Schwartz already predicting belt-tightening this budget cycle.

Last week, staff told the Arlington County Board about new strategies and policies they are considering to further combat this issue as part of the ongoing Commercial Market Resiliency Initiative. Yesterday (Tuesday), the county’s Economic Development Commission discussed its own recommendations for dealing with these vacancy rates.

That follows several zoning changes made in the last 12 months — on a compressed community engagement timeline — to get emerging businesses into older office buildings by allowing them to operate without seeking special permissions. This includes micro-fulfillment centers, urban farms, breweries, dog boarding facilities, pickleball courts and podcast studios.

Board Chair Christian Dorsey said Arlington is facing a different challenge than it has before.

“This is a little bit different than some of the elevated rates of vacancy that we’ve experienced in the past,” Dorsey said last week.

During the Base Realignment and Closure process, for instance, the office vacancy rate peaked at 20.1% in 2015 after major Department of Defense offices decamped from the county, per the Economic Development Commission.

Arlington managed to bounce back by landing deals with Nestle, Boeing and RTX — formerly Raytheon — Amazon and Microsoft, Dorsey said.

“But this is a little bit different because this is in the midst of a paradigm shift in the commercial market,” he said, pointing to the impacts of remote work. “And then, of course, there’s a market which is in turmoil, with incredibly low valuations and commercial space, which impacts lending and trading.”

Rising office vacancy rate (via Arlington County)

With a potentially protracted dip in tax revenue from commercial properties in Arlington, residents will have to pay more for essential services, Touhill said.

“Historically, we’ve had that 50-50 split between our commercial and residential tax base,” he said. “But in recent years, we’ve seen that increase to more of a 55-45 split. And this means that our residents are carrying more of the burden to fund our essential services.”

To weather this storm, the economic development commission, AED and the Dept. of Community Planning, Housing and Development (CPHD) intend to streamline onerous county processes and tackle restrictive ordinances.

‘Work flows’ in the second stage of the Commercial Market Resiliency Initiative (via Arlington County)

One under scrutiny will be the major and minor site plan amendment process, which developers and property owners go through to repurpose or renovate large, existing development projects.

“The site plan process’s length and variability are amongst the biggest impediments to redevelopment,” says the commission, which calls for an expedited process for these types of projects. “As these buildings already exist, all that will change is the building’s use.”

(more…)

Arlington is the third-best place in the U.S. to raise a family, says new report

By Jo DeVoe
Parents and kids celebrate the last bus drop off of the school year with a water balloon fight in the Yorktown neighborhood (staff photo by Jay Westcott)

(Updated at 10:40 a.m.) Out of more than 130 municipalities, Arlington is the third best place to raise a family, according to a new rankings report.

Arlington was evaluated alongside nearly 140 cities nationwide based on factors such as, cost of living, housing, the local economy and quality of life for renting families, according to RentCafe, which analyzes rental data and trends.

Arlington ranked near the bottom for cost of living but clinched second place for “Local Economy” and third for “Quality of Life,” which boosted its overall score – surpassed only by Plano, Texas and Scottsdale, Arizona.

“Arlington provides the ultimate combination of budget-friendly options, a growing job market, and high quality of life,” per the report, which called the county “a place teeming with history, but still keeping up with the younger crowd.”

With a cost of living 40% above the national average, the county ranked 128th in the “Cost of Living & Housing” category. In addition to having the 10th highest rental rates in U.S., RentCafe says renters looking to “upsize” for a growing family can expect to pay, on average, $645 per additional room.

While that “may not be so appealing for many renter families,” the report notes, “Arlingtonians can rest assured that they are raising their children in one of the finest locations in the U.S.”

RentCafe highlighted that 85% of apartments in Arlington are situated “in prime locations” near “excellent schools” and family-friendly spots, including parks and museums.

The reported also noted Arlington has one of the highest child school enrollment rates nationwide, at 92%, and the second lowest percentage of children living below the poverty line, at 6.8%.

In terms of its economy, RentCafe highlights that 76% of Arlington residents possess a higher education degree, ranking it second-highest. Additionally, there’s been a 1.6% uptick in job growth and a mere 2.9% unemployment rate, marking the lowest among the top 10.

“The city proves that it knows how to both play hard and work hard,” the report said.

The list of the top 10 municipalities is below:

  1. Plano, Texas: Top-ranked for its balance of urban and suburban life, high-quality schools, and spacious apartments.
  2. Scottsdale, Arizona: Offers upscale living, stunning views, and over 330 sunny days a year.
  3. Arlington, Virginia: A history-rich city with a youthful vibe, boasting excellent economy and quality of life.
  4. Marietta, Georgia: Provides a low cost of living, large apartments, and excellent schools.
  5. Sunnyvale, California: Heart of Silicon Valley, offering diverse kid-friendly activities and top-notch schools.
  6. Round Rock, Texas: Known as the “Sports Capital of Texas,” it’s perfect for active families who love their space.
  7. Austin, Texas: A cultural hub with a vibrant entertainment scene and an appealing cost of living.
  8. Fayetteville, Arkansas: Leads in cost of living and housing, blending small-town charm with ample family apartments.
  9. Raleigh, North Carolina: A perfect blend of Southern charm and a busy college town, perfect for raising a little scientist.
  10. Ann Arbor, Michigan: A renter’s paradise with dense forestation, great schools, and a thriving cultural scene.

Economic downturn puts Columbia Pike redevelopment on hold

By Jo DeVoe
1/6

Construction of an approved residential development at the Rappahannock Coffee site on Columbia Pike is on hold for now.

The approved six-story, 120-unit building with ground-floor retail and underground parking would replace three one-story retail buildings and a surface parking lot on the southeast corner of the intersection of Columbia Pike and S. Barton Street, at 2400 Columbia Pike.

Yao Yao, with YW Development, told ARLnow that his firm isn’t going to pursue redevelopment at this time, citing high and climbing interest rates and a generally poor economic outlook — including mixed signals of a looming recession.

Instead, he is looking for a new tenant to fill the vacant retail space next to Rappahannock Coffee and Roasting and generate some income before moving forward with the project. It used to be occupied by Cabinet Era before the business moved to Falls Church.

Leasing agent Erik Ulsaker says the space will work as-is for a temporary retail concept. Any tenant would have to be okay with a termination option if, in three to four years, economic conditions improve and it comes time to build.

“This is a good space for startups, and people who want to get going on their business plans,” he said, adding that he and his business partner “welcome creative ideas,” like pop-ups.

“If it goes over well, it could be put into the development, as we’ve got 16,000 square feet of retail on the back end,” he said. “It’s a good way to test the market.”

YW Development’s proposal went before the Arlington County Board last year. It modified an existing, already-approved proposal for the site by adding 6,500 square feet, 15 residential units and 36 parking spaces while preserving existing building facades.

The long-delayed project — first proposed in 2013, approved in 2016 and pushed back in 2020 — was initially led by Columbia Pike-based B.M. Smith, which was behind the Penrose Square development across the street.

Hat tip to John Antonelli

Morning Notes

By ARLnow.com
Sunny and wet Ballston (staff photo by Jay Westcott)

Interest Rates Could Slow Development — “Arlington County leaders are preparing for a difficult economic environment for multifamily development, even as they say they’re optimistic about the region’s future… [I]f the Federal Reserve pushes the federal funds rate to 3.5% by year-end as it has targeted, that could have serious repercussions, said Shooshan Co. Chairman John Shooshan, speaking at Bisnow’s Future of Arlington County event on Thursday.” [Bisnow]

Talent Driving Local Tech Strength — “Northern Virginia has become a magnet for the industry, with the Dulles Technology Corridor continuing its growth along the Silver Line and Amazon HQ2 going up in Arlington… Taylor said the upcoming Virginia Tech Innovation Campus in Alexandria and George Mason’s Fuse at Mason Square in Arlington are two projects that will be pivotal to ‘churning out more talent.'” [Axios]

Funding for DCA Runway Reconstruction — “Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) announced $5,958,173 in federal funding for two Virginia airports… [including] $1,750,000 for Ronald Reagan Washington International Airport in Arlington, VA for the reconstruction of a runway.” [Press Release]

Business Is Booming at Airport — “Concession sales are booming at Reagan National and Dulles International airports as travel continues to rebound from the early days of the Covid pandemic. Since the start of 2022, concessions sales have grown 241% at National and 143% at Dulles.” [Washington Business Journal]

‘CraigPokesU’ Manager Profiled — “Blake Williams has 14 dragon tattoos and 12 piercings. Some of his body art you can see — like the ‘third eye’ on his forehead, the ring in his nose and the letters that spell out ‘kindness’ on his knuckles — while others fall into the ‘that’s private’ category, he says. Williams, 47, is the head piercer and shop manager at CraigPokesU on Langston Boulevard, just up the street from Cowboy Cafe.” [Arlington Magazine]

Arlingtonian Helped to Shape Region — “Chuck Bean has spent 10 years leading the Metropolitan Washington Council of Governments… Bean, who lives in Arlington, is unknown to many D.C.-area residents, but as liaison between COG’s 125 staffers and public officials representing 24 counties and cities, he has played a lead role in coordinating regional planning to improve transportation, combat climate change and encourage more housing construction.” [Washington Post]

Street Project Funded in F.C. –“he Northern Virginia Transportation Authority (NVTA) approved a $22.5 million project funding request from the City on Thursday for transportation improvements on North Washington Street. The North Washington Street Multimodal Improvements Project includes sidewalk widening, improved intersection geometry, signal improvements, crosswalks, utility undergrounding, lighting, and landscaping, between Great Falls Street and Gresham Place.” [City of Falls Church]

It’s Friday — Clear throughout the day and hot. High of 92 and low of 75. Sunrise at 6:02 am and sunset at 8:30 pm. [Weather.gov]

Morning Notes

By ARLnow.com
Men play basketball at Westover Park under the lights (staff photo by Jay Westcott)

Prison for Convicted Drug Trafficker — “An Alexandria man was sentenced today to 14 years in prison for conspiracy, possession, and distribution of fentanyl and Eutylone, and being a felon in possession of a firearm during drug trafficking… Pills distributed by the conspiracy twice on December 20, 2020, contributed to the mixed drug overdose death of a 20-year-old female in Arlington, whose blood was later determined to contain fentanyl.” [Dept. of Justice, Twitter]

ACDC Lowering Participation Age — “Seventeen-year-olds would be able to participate in operation of the Arlington County Democratic Committee under proposed bylaw amendments. The change, part of a larger swath of amendments to be voted on in April, would allow those under 18 to participate in ACDC activities, including caucuses, if they would turn 18 before the next Election Day.” [Sun Gazette]

History of Columbia Gardens Cemetery — “Columbia Gardens, long run by the Thomas family, is the resting place of historic personages: car dealer Bob Peck, Sen. Robert Byrd, guitarist Roy Buchanan, and a host of prominent locals with names like Ball, Marcy, Mackay and Lyon. Retired superintendent Ned Thomas Jr. confirmed the story his great-grandfather (a co-founder) relayed: ‘Someone in the War Department knew World War I was coming and that Arlington cemetery was basically full,’ he told me. So the partners thought a new cemetery in Arlington would make a lot of money.” [Falls Church News-Press]

Marymount Boosts Local Economy — “A new study suggests Marymount University pumps $236 million annually into the local economy, directly and indirectly, and is responsible for a cumulative payroll of about $90 million. The study, released by the university, looks at both the direct impact of the university on local economic conditions, and indirect impacts, such as spending by students.” [Sun Gazette]

It’s Monday — Rain in the evening. High of 75 and low of 57. Sunrise at 6:33 am and sunset at 6:09 pm. [Weather.gov]

County to Study Ways of Making Temporary Outdoor Seating Areas Permanent

By Jo DeVoe

Arlington County says it will explore ways to make it easier for restaurants to establish or expand outdoor dining after the pandemic ends, according to a county report.

During the pandemic, the Arlington County Board approved a temporary way for restaurants to circumvent the normally lengthy county process for getting an outdoor dining permit. Many restaurants debuted outdoor seating over the last year to make up for the indoor space lost to social distancing requirements and give guests a safer dining experience.

Since then, the County Board has amended the outdoor dining ordinance to expand it and mold it to changing circumstances.

In December, the Board granted restaurant and bar owners the ability to set up temporary outdoor seating areas (TOSAs) in common areas, such as plazas. When capacity restrictions were lifted this spring, the County Board gave restaurants a way to request temporary certificates of occupancy (TCOs) for their TOSAs so they could operate the seating areas while operating at full capacity indoors.

The county report said staff will be looking to see if some aspects of the program could be worked into the regular outdoor seating approval process. It did not include a timeline for this inquiry.

“Specifically, staff will be working to commence a strategic exploration of whether certain flexibilities provided as part of the TOSA program initiated in response to the COVID-19 emergency should be incorporated into established regulatory provisions for outdoor dining,” it said. “This future process will have a robust engagement element and would also include public hearings prior to the County Board’s consideration of any recommended policy or regulatory changes that might result from the study,”

All this is being considered in the background of a technical change that will give restaurateurs a little leeway in phasing out the outdoor seating when the local pandemic emergency is declared over.

When the county passed a continuity of governance emergency ordinance last spring to keep government and business operations afloat, it said any flexibility allowed by the ordinance, such as TOSAs, would expire six months after the declared end of the emergency. But in reality, the document’s section on TOSAs said they expire with the declared end of the emergency.

On Saturday, the County Board is slated to consider advertising a public hearing to amend the ordinance so it’s clear that eateries also have six months to phase out the seating.

“In addition to providing consistency with the Ordinance and continued support of Arlington’s businesses, this proposed amendment will also ensure that food establishments are not required, immediately at the end of the emergency, to make significant changes to their operations and allows time for business planning,” the county report said.

Kate Bates, President and CEO of the Arlington Chamber of Commerce, said the Chamber supports this change but urged the county to get cracking on the study of permanent options.

“Given the time it will take for Arlington County to set the rules for permanent, expanded outdoor dining, and the further time it will take for restaurants to adapt to new rules, the Chamber encourages Arlington County to advance its work on making the TOSA program permanent,” she said. “While the 2022 outdoor dining season feels far off as the summer of 2021 winds down, restaurants will need to start making investments soon to be prepared in the spring.”

As part of the upcoming request to advertise, staff said they will do outreach to see how locals feel about TOSAs. Staff report fielding a range of comments, questions and opinions on them, from support from the business community to concern that outdoor dining makes it harder for pedestrians and cyclists to get around. The report said neighbors near TOSAs tolerate the noise associated with them provided that TOSAs would end along with the emergency.

Bates said making the provisions permanent will allow restaurants to invest in their spaces in ways that could mitigate these concerns.

“We expect that there will be some refinements to the outdoor dining rules as they are made permanent, but we encourage Arlington County not to risk the success of outdoor dining by over-regulating to ameliorate any possible complaint,” she said.

Arlington Car Dealerships Plagued by Effects of National Chip Shortage

By Anuj Khemka
Mercedes-Benz of Arlington in Ballston (via Google Maps)

Many Arlington car dealerships are struggling to stock cars amid a nationwide shortage of computer chips.

At Mercedes-Benz of Arlington in Ballston, formerly known as American Service Center, a lot once stocked with around 130 used cars available for sale has emptied out to 63 vehicles, according to Ron Moghisi, who manages pre-owned sales. He said many of the cars were purchased at nearly 30% over the normal list price.

“There’s a lot of demand, but there’s just nothing for us to buy and to resell, because the price is so high that it won’t make sense,” Moghisi said. “Let’s say you buy a bicycle for $10 that you can sell for $12. It doesn’t make sense to buy it for $16, because you’re going to get stuck with it. Some dealers are taking the risk and buying them, and God help them.”

Employees at the Koons Arlington Toyota and Brown’s Arlington Honda dealerships in Cherrydale told ARLnow they also have fewer available new and used cars to sell. At Brown’s Honda, around 50 used cars are currently available for sale, whereas 150 to 200 cars would normally be in stock, according to a pre-owned salesman. Prices at the dealership are up between 20% and 45%, in line with used car price increases nationally.

The scarcity of computer chips can be traced back to the beginning stages of the coronavirus.

When lockdowns first went into effect, car sales crashed, leading automobile companies to reduce orders for chips and other parts. Chip manufacturers, in response, cut production in order to avoid financial losses.

The strategy helped chip companies survive the pandemic. As car sales bounced back, however, automobile companies found that there weren’t enough chips for them to maintain the levels of production they wanted, as ramping up chip production can take a long time. Ford Motor Company slashed production by 50%. Meanwhile, Jeep temporarily stopped manufacturing two of its models because it didn’t have the chips needed to make them.

As the supply of cars dwindled, dealerships around the country, including those in Arlington, suffered. At the Mercedes-Benz dealership, Moghisi said that the low supply of both new and used cars has forced the dealership to hike its prices for used cars in order to maintain profitability.

“There are not many new cars around, which really means people are not trading [in] their cars, and therefore, there’s a shortage in the market for premium cars,” Moghisi said.

According to Eddy Malikov, the manager at the used-car dealership Arlington Auto Group, consumer demand is starting to decrease as a result of the rise in prices.

“I think there’s less demand now in the U.S market at least from what our business has seen. We sold around 30 cars in the first two weeks last month. This month we’ve done around 18 vehicles,” Malikov said. “I would say demand might be going down and prices and supply are going back to where they should be.”

For Moghisi, as the shortage stretches on, the stress builds for him and his employees.

“We’ve been playing the waiting game — just have to wait and see what happens. We buy whatever we can get, which is not enough,” Moghisi said. “The way this has affected the industry is, dealerships are making less money, which has put a pressure on employees. If there are no cars to sell, we can’t make a living.”

It could be a while before the automobile industry and car dealerships have fully recovered from the ongoing chip shortage. Intel CEO Patrick Gelsinger told analysts last month that the chip companies may not catch up to demand for another one to two years.

“We hear different stories. We hear it’ll be fixed by November, December, then we hear by next July. We don’t know,” Moghisi said. “I don’t think we’ll have to shut down the department. Eventually, it’ll get fixed, it’s just a matter of time. The only issue is we have to dig into our savings.”

Photo via Google Maps

De Ferranti Highlights Economic Recovery, Honors Heroes in State of County Speech

By Jo DeVoe

Fewer COVID-19 cases. Lower unemployment. Higher hotel occupancy rates. These and other signs point to Arlington County’s continued recovery, according to Board Chair Matt de Ferranti.

During the annual State of the County address, the chair said Arlington County is well on the road to economic recovery but it has a ways to go before it enters into a period of renewal. The event was hosted virtually yesterday morning (Tuesday) by the Arlington Chamber of Commerce, with a Q&A moderated by ARLnow founder Scott Brodbeck.

“We’re growing, but not as fast as at the start of 2020, before the pandemic, when our prospects seemed truly bright,” he said. “If we’re honest, recovery is not all we’re looking for at this moment. The state that we have not reached — that we must create — is renewal.”

Reaching renewal will mean supporting small businesses, working to eliminate inequities and increasing housing options, he said.

Recent data show the health of Arlington County residents has stabilized, with a 0.6% COVID-19 test positivity rate and about one case per day over the last two weeks. Unemployment is down, as well, from 7.2% this time last year to 3% today, he said. As vaccination rates rise, tourism is recovering, with hotel occupancy rates up to 40% from a low of 20%.

The county has also retained organizations with an Arlington footprint, including the State Department, while attracting new companies, from Microsoft to shipping company ZeBox‘s startup incubator. All along, Amazon continues to meet its occupancy and hiring goals while supporting businesses, he said, and will present its second phase of its HQ2 to the Board later this year.

Plus, new development is continuing.

“The County Board has approved numerous office and residential projects that will drive economic growth… and strengthen our economy in Arlington,” de Ferranti said. “We’re hearing from commercial real estate brokers that there is significant pent-up demand from [office] tenants who delayed real estate decisions in the pandemic. We expect to see these deals come forward in the fall of this year.”

Still, the office vacancy rate is a lingering concern for de Ferranti, who noted that it was 18.7% in the first quarter, up 2.1% from the same time last year.

“Part of the reason I sought this office was to bring down the vacancy rate so that we could invest in schools, housing, transit, transportation and the things that make Arlington a great place to live,” he said. “Our economic development projects show promise, our pipeline is strong, so I’m confident we can bring down the rate over the coming years.”

The county will need to engage with companies already here and those eyeing Arlington while adapting to 21st-century office needs through measures such as office-to-apartment conversions, he said.

“We saw before Amazon that there was a time when we got a touch complacent working on our office vacancy rate,” he said. “That’s no one’s fault but we do need to stay focused on it.”

While it’s mostly larger companies that help to fill Arlington’s office towers, small businesses in Arlington need help, de Ferranti said, so Arlington Economic Development is preparing a grant program using American Rescue Plan funds. It follows up on a similar program last year that helped 393 businesses.

The county still has work to do to fix bugs with the online permit system and improve the customer service experience for businesses — lessons learned from the roll-out of temporary outdoor seating areas, or TOSAs, the chair admitted.

(more…)

Board Chair Matt de Ferranti: Arlington’s Economic Recovery Is Underway

By Jo DeVoe

With COVID-19 cases trending down, vaccines being distributed and restrictions loosening, County Board Chair Matt de Ferranti says his focus is starting to shift toward Arlington’s economic and social recovery.

“There is more work to do on the pandemic but recovery has already begun,” he said.

And Arlington County, by his assessment, is in a fairly strong place financially — in some ways, he said it is in a better place than when numerous federal agencies and military offices decamped from Pentagon City and Crystal City starting around 2005.

Arlington will receive $23 million this year and next year through the federal American Rescue Plan, some of which will be used to return funding for affordable housing and hunger prevention programs that had been on the chopping block from the 2022 budget. The new budget, as passed, boosts spending by 3.5% despite the economic turmoil caused by the pandemic.

In addition, Amazon’s presence is contributing to Arlington’s stability. De Ferranti said the e-commerce giant’s arrival is and will continue attracting talent and businesses of all sizes, strengthening the county’s commercial office base. And, for now, the county has been spared from making incentive payments to Amazon.

The county’s incentive package for Amazon stipulated that Arlington would share a cut of the revenue generated from an increase in hotel stays if Amazon met its hiring goals. Since the economic impact of the coronavirus also included dramatically fewer hotel stays, Arlington has not been on the hook for these payments.

If any of these things weren’t true, de Ferranti said he “would be more worried about the fiscal outlook in 2023, 2024 and 2025.”

This moment — when the county’s financial outlook is strong but there’s still significant need in parts of the community — is exactly when the government needs to step in, he said. Keeping people who are at risk of eviction in their homes, fighting hunger and providing grants and loans to small businesses will have big economic returns later on, the chair said.

The county has learned a number of financial lessons from the coronavirus, de Ferranti noted. Arlington will need to invest more in public health staffing and is considering a rainy-day fund for future public health emergencies. When the American Rescue Plan funding dries up, the county may need to increase its support, through grants and loans, for small businesses as well as its investments in hunger and eviction prevention.

While the county has been focused on the pandemic response, it has held back on certain equity-focused work. Some community engagement in land-use changes to address Missing Middle housing was pushed back due to the pandemic, as have investments in multimodal transit and workforce development.

“Arlington is committed to equity, but it has been hard,” de Ferranti said.

And while Amazon is economically propping up the county in some ways, Arlington Public Schools’ budget will not be feeling the returns as directly. The county will need to do more work with the School Board and administration to address APS’s systemic budget deficits, he said.

(more…)

Morning Notes

By ARLnow.com

Arts Group Pushing for New Venue — “As part of its recently adopted strategic plan, [Embracing Arlington Arts] plans to use the coming three years to build community support for a performing-arts venue that would include a black-box theater and ancillary classroom and office space. Efforts would also be made to identify a site and start raising funds.” [InsideNova]

APS Changing Student Camera Policy — “In response to challenges teachers are experiencing engaging students with cameras off, we have adapted our policy regarding the use of cameras during instruction time, based on input we have received from teachers, staff, parents, the Distance Learning Task Force, and advisory committee members. We are asking teachers to encourage students to turn on their cameras during synchronous instruction and while directly engaging with peers and staff.” [Arlington Public Schools]

Spotlight on Arlington Man’s Heroism — “A must read about Arlington’s Paris Davis, the former publisher of VA’s Metro Herald. His heroism in 1965, while commanding a Special Forces team in Vietnam, seems worthy of the Medal of Honor. But those who served with him say the Pentagon kept losing the paperwork.” [New York Times, Twitter]

Local Nonprofit’s Work Highlighted — “Mohammad Ahmed, 30, gave up working as an Uber driver in March for fear of infecting his wife, 3-year-old son and two elderly parents who live with him. When he couldn’t pay the rent or electric bill for their two-bedroom apartment in Arlington, a local charity funded mainly by taxpayer dollars stepped in.” [Washington Post]

Metro Reducing Rail Service — “Metro this week began reducing Metrorail service during peak commuting hours because of low usage while saying it will boost Metrobus service as new commuting trends emerge during the coronavirus pandemic. The transit agency referred to the changes as a way to ‘normalize’ rail service.” [Washington Post]

Local Economy Expected to Grow — “Greater Washington’s economy will rebound in 2021 as Covid-19 vaccinations become more common and the weather warms up, according to a new regional economic forecast released Friday. That means 3.5% growth in the gross regional product in 2021, a sharp rebound from the 2.9% drop in 2020. But the region will only see a full recovery in 2022, with 4.1% projected growth in the local economy.” [Washington Business Journal]

Many Office Workers Will Stay Remote — “Working in D.C. will continue to look different for the greater part of this year due to the coronavirus, a new study shows. Employers expect less than a third of their employees to physically be in the office in the first quarter of this year, but by the fall, they expect 75% of their staff to be back, according to a study.” [NBC 4, Washingtonian]

Flickr pool photo by GM and MB

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