Pentagon City

In Rare Public Appearance, Amazon Leaders Pledge to Become ‘Good Neighbors’ in Arlington

By Alex Koma
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Amazon executives say they’re looking forward to becoming “good neighbors” in Arlington, delivering a decidedly optimistic message to local leaders in one of the company’s first public events since tabbing the county for its new headquarters.

The tech giant’s head of worldwide economic development, Holly Sullivan, assured a crowd of government officials and business executives last night (Thursday) that the company is looking to build a “sustainable long-term partnership” in the region. That presented a stark contrast with Amazon’s recent decision to spurn New York City over concerns that local leaders were insufficiently supportive of a new headquarters there.

The event, organized by the Metropolitan Washington Council of Governments and held at George Mason University’s Virginia Square campus, also came just a few days after Arlington officials and activists expressed concern that Amazon executives haven’t done enough to engage the community as it gears up to move into the area.

Sullivan challenged that idea Thursday, arguing the company plans to be “active in the community” and has “just started our outreach” in Arlington. But only a limited group of Arlingtonians had the chance to hear that message — the event was “invitation-only,” though the COG did offer a livestream for anyone hoping to watch from home.

That stricture prompted some local critics of the project to refuse to attend the event, calling on the company to hold public hearings with community members instead. Many have been especially critical of Arlington’s proposed incentive package for Amazon — if the County Board approves it next month, Arlington would fork over $23 million over the next 15 years to a company owned by the world’s richest man.

On that front, Sullivan was able to offer significantly less reassurance. In response to a rare question from a reporter at the event, she pointedly would not say whether the company would pull the plug on its Arlington plans if the Board rejects the incentive package.

“The talent in the area was the primary driver of this entire process,” Sullivan said. “But incentives are important to us. They give us an opportunity to reinvest in our infrastructure and development opportunities for our workforce.”

Of course, it’s quite unlikely that the Board would take such a step. Even Board members who have expressed some unease with the incentive package have reasoned that it’s a small price to pay for the 25,000 (or more) jobs Amazon hopes to bring to the county.

The business community has also been increasingly vocal in support of the project. Not only has the Arlington Chamber of Commerce repeatedly thrown its weight behind the effort, but the Crystal City-based Consumer Technology Association recently joined in the fight as well. The CEO of the tech advocacy group attended the event to welcome Amazon to the neighborhood, and the CTA organized a crowd of dozens of pro-Amazon demonstrators to hold signs outside the gathering.

“We know this is a historic moment, not just for Arlington, but the whole region,” said Victor Hoskins, head of Arlington Economic Development.

To assuage anyone concerned that the company would bring a huge surge of out-of-state workers to jam area roads and pack local apartment buildings, Sullivan stressed that, in a perfect world, company executives “hope to hire all 25,000 workers locally.”

But she followed that up with a laugh, acknowledging that such a possibility is a bit unlikely. However, she is confident that D.C. region has enough highly skilled tech workers to provide a deep hiring pool for Amazon. And it helps, she believes, that the company already has corporate offices in both Herndon and D.C. to draw from too.

“A few people may choose to relocate from our Seattle headquarters, but this is not a relocation of corporate employees from Seattle,” Sullivan said.

Sullivan added that, wherever the company’s employees hail from, Amazon plans to design its offices in a way to “push employees out into the neighborhood to support local businesses.”

While the tech giant is still in the most preliminary phases of designing the office space it plans to lease from JBG Smith in Crystal City and build in Pentagon City, she said the company fully expects to draw from the design principles it used in Seattle.

“We’ll be trying to take the indoors outdoors and vice versa,” Sullivan said. “We want it to feel very much like a neighborhood. There will be no walls around it, no big sign that says ‘Amazon’ on it.”

That includes a focus on welcoming retailers and other restaurants onto the ground floor of the company’s offices. Though JBG has already worked fervently to bring more mixed-use developments to the area, it’s a process the area’s dominant property owner is hoping that Amazon will accelerate, to the whole neighborhood’s benefit.

“Crystal City gets pretty quiet at night, because everyone leaves right after work,” said Andrew VanHorn, JBG Smith’s executive vice president. “It may not be 24/7, but we want to make it more of an 18/7 environment.”

Until the Board signs off on the incentive package and Amazon starts submitting construction plans for its new offices, VanHorn pointed out that any design conversations are quite preliminary at this point.

However, he said JBG is working under the general assumption that the company will move into all of its leased office space in Crystal City by 2020. Then development work on a new building at Metropolitan Park in Pentagon City will run roughly from 2021 to 2025; construction at the former “Pen Place” development will run from 2023 to 2027.

Sullivan stressed that the buildings won’t look too out of step with the existing skyline, saying executives hope to “integrate into what’s already there” in Pentagon City.

Arlington’s notoriously extensive civic engagement process for new developments offers a long road ahead for the company, but Sullivan said she’s looking forward to embarking on it to answer a simple question: “How can we be a better neighbor?”

“We’re all doing this together,” Sullivan said. “We’re going to be neighbors.”

As Amazon Moves In, Crystal City Business Group Works to Expand to Pentagon City, Potomac Yard

By Alex Koma
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Crystal City’s leading business advocacy group is taking its most concrete steps yet to expand and represent Pentagon City and Arlington’s portion of Potomac Yard as well.

The Crystal City Business Improvement District is hoping to bump out its borders as soon as next year, according to documents submitted to the County Board. The BID plans to spend the next few months working secure the support of businesses in its adjacent neighborhoods, then finalize the change sometime in fiscal year 2020.

The business group, funded via a tax on properties in Crystal City, has been eyeing a potential expansion for months now, and the move took on increased importance once Amazon announced it would be setting up shop across all three South Arlington neighborhoods: the tech giant will have office space in both Crystal City and Pentagon City, and is spurring the creation of a new Virginia Tech campus in Potomac Yard.

The BID has already started to pitch the area to businesses as a cohesive “downtown” for Arlington, and is billing the creation of an “area-wide” BID as a way to “reinforce the complementary nature of these markets” when it comes time to lure new companies and residents to the area.

“In fact, the Crystal City, Pentagon City, and Potomac Yard-Arlington area has a total asset value of over $11 billion and represents a powerful economic engine for Arlington County, the region, and the Commonwealth of Virginia,” the BID wrote in its work plan for FY2020, delivered to the Board ahead of its meeting Saturday (Feb. 23).

The group’s new proposed borders would expand the BID’s reach down Army Navy Drive until it meets S. Hayes Street, putting major developments like Amazon’s future home near Metropolitan Park and the neighborhood’s Costco and Best Buy under the BID’s umbrella. However, the Fashion Centre at Pentagon City mall would not be included under the BID’s current proposal.

On the Potomac Yard side of the things to the south, the BID would extend its borders down Route 1 until it meets Four Mile Run (and the county’s border with Alexandria). That would pull in the large development that includes Lidl’s American headquarters and a Harris Teeter grocery store.

According to its work plan, the BID plans to spend the second and third quarters of the current fiscal year rallying support from business owners in Pentagon City and Potomac Yard. It also plans to move offices later this year, then hire more staff to account for its expanded borders.

The Board will also set the tax rate it imposes on Crystal City businesses to fund the BID as part of its upcoming budget deliberations. The BID is requesting that the tax rate remain stable, and when combined with a 6.8 percent jump in property values in the neighborhood, the group expects to pull in about $2.76 million in revenue this year.

County Officials, Activists Say Amazon Executives Have Failed to Engage with Arlington Community

By Alex Koma
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Amazon can feel a bit omnipresent around Arlington these days, but, in one key way, local leaders and activists say the company has been missing in action.

The tech giant sent a few emissaries to Pentagon City in mid-November, as politicians from around the state and the region congregated to hail the company’s massive Arlington expansion. Since then, however, people closely watching the Amazon debate say they’ve seen barely any evidence that the company’s executives have shown their faces in the community.

And in the wake of Amazon’s sudden, splashy decision to cancel plans for a new headquarters in New York City over local opposition to the project, officials see a clear need for the company to build stronger in-person relationships in Arlington.

“I don’t really understand why they’re not out here… they need to have their coming out party, if you will,” County Board member Erik Gutshall told ARLnow. “Without some really clear rationale or justification from them, I would be very, very hesitant to vote on the incentive agreement without them having had some meaningful engagement in the community. In fact, I couldn’t see us voting on this without that happening first.”

The Board is set to take up that $23 million incentive package on March 16, after delaying a planned February vote on the matter, leaving just a few weeks for the company to meet those concerns.

“We should have a dialogue with them on this, and the community’s legitimate concerns, and it should be a dialogue soon,” said Board member Matt de Ferranti.

For its part, Amazon says it’s done plenty of work on the ground to build strong partnerships in Arlington. Spokeswoman Jill Kerr said in a statement that the company “has met with stakeholders in the community to discuss plans for our second headquarters in National Landing and we will continue to do so into the future.”

The company has also joined the county’s Chamber of Commerce to work with local business owners. Scott Pedowitz, the Chamber’s government affairs manager, says the company has “been very active since joining” and sent its representatives to a variety of the group’s gatherings.

“Earlier this month, we convened a meeting of over 50 local nonprofit organizations with Amazon’s head of community engagement,” Pedowitz wrote in an email. “It was a great dialogue and we’ve heard directly from several of our local nonprofits about follow-up.”

But activists opposed to the project argue that the company can’t simply work with the business community and Arlington’s professional class, when Amazon’s arrival threatens so many low- and middle-income people in the area. Expert opinions are split on just how much the company’s 25,000 highly paid workers will drive up rent prices in the county, but the changes to the housing market will almost certainly force some people to leave their homes.

“We’re being sold all this stuff about how Amazon wants to be a good neighbor and they love our community, but they haven’t spent a second with the community,” said Roshan Abraham, a longtime Amazon critic and a leader of the progressive group Our Revolution Arlington. “Maybe they’ve had meetings with the Arlington Chamber, and they think that’s the community. But they haven’t spoken to the rest of us.”

In all of the many community meetings focused on the project he’s attended over the last few months, anti-Amazon organizer Alex Howe points out that “the only time I’ve ever seen an Amazon official is in Richmond.” And that was when state lawmakers were debating a $750 million incentive package for the company, which Gov. Ralph Northam ultimately approved earlier this month.

Gutshall did suggest that perhaps Amazon was “distracted” with the opposition it was facing in New York, where city officials called company executives in for heated hearings on the project. However, Abraham reasons that the company has seen no need to make its case to skeptics in Arlington because local leaders have so aggressively pushed the project on their own.

“They haven’t had to speak to us because the County Board has been doing their work for them,” Abraham said. “In New York, politicians pressured them and Amazon was put in a position where they had to speak to the community. No one’s putting that pressure on them here.”

Yet de Ferranti and Gutshall say they’ve both urged the company to engage in Arlington. Gutshall says his consistent message to Amazon officials has been that “the Board and the community are expecting you to join the community, and if you’re going to do that, you need to show up.”

However, de Ferranti says he is concerned that activists opposed to the company’s presence in the county would turn any community meeting into a “shouting match” rather than a constructive dialogue.

“I want to have a real conversation on this, not a chance for people to demagogue,” de Ferranti said.

Abraham says that sort of stance “totally baffles me,” arguing that the Board “shouldn’t be afraid of how the community might respond to Amazon executives being here.” Gutshall also noted that “even our most contentious town halls on this haven’t been abominable.”

“You don’t have to engage with the only purpose of trying to change somebody’s mind,” Gutshall said. “But if you have a dialogue and if it’s done in a civil way, it’s healthy. It’s not necessarily everyone singing ‘kumbaya’ all of a sudden, but it’s important to have those conversations.”

Gutshall says the company has assured him that it has “imminent” plans to start holding community meetings, even though he’s seen no evidence of specific plans just yet.

Pedowitz points out that the Metropolitan Washington Council of Governments is organizing an event titled “A Regional Conversation with Amazon,” scheduled for George Mason’s Virginia Square campus tomorrow night (Thursday). The event will convene “elected officials, government executives, and business and community leaders” for a meeting with Amazon representatives to “discuss plans to become a bigger part of our diverse, dynamic and growing region.”

But that event is described as an “invitation-only” gathering, and does not appear publicly on the group’s website — a Washington Post reporter tweeting out a link to an internal event description seems to be the first public reference to the meeting.

An organizer of the event did not respond to a request for comment on whether the gathering is open to the public or the press.

BREAKING: Amazon Cancels NYC HQ2 Plans, But Leaders Say ‘Nothing Has Changed’ for Arlington

By Alex Koma

(Updated at 2:45 p.m.) Amazon is cancelling plans to build half of its “HQ2” in New York City, citing mounting criticism from local officials and activists in its reasoning for abandoning its other proposed location for a new headquarters outside Arlington.

But Amazon said in a statement announcing the change that it does not intend to re-open the HQ2 search and will “proceed as planned in Northern Virginia and Nashville.”

County Board Chair Christian Dorsey says the company told local officials that “nothing has changed” when it comes to Amazon’s plans for Arlington, and that the county isn’t likely to suddenly see jobs bound for New York head here instead.

Amazon originally announced plans to bring 25,000 jobs to Crystal City and Pentagon City in November, though the terms of the state incentive deal recently approved by Gov. Ralph Northam do allow for the company add another 12,850 jobs to the Arlington headquarters after that.

Dorsey told reporters on a conference call Thursday afternoon that the chances of the company reaching that larger number have likely increased with today’s news. However, he added that the county does not plan to try to lure any of the jobs originally set for New York to Arlington instead. Spokespeople for JBG Smith, Amazon’s future landlord in some buildings and development partner for others, declined to comment on Amazon’s New York City changes.

“If they want to occupy more square footage, that will be contingent on the community plans we already have in place for any business,” Dorsey said. “But at this point, there is no reason to speculate about that.”

Amazon pointed to a lack of “positive, collaborative relationships with state and local elected officials” in explaining its decision to abandon its New York plans. Rumors first started circulating that the tech giant could spurn the city once New York lawmakers appointed a vocal Amazon critic to a state board that would have oversight over the state’s incentive package for the company, and a coalition of lawmakers and left-leaning activists have been intensely skeptical of Amazon’s plans for the city.

But Dorsey says this development has done little to change his opinion of Amazon as a partner for the county, praising the company’s executives as “collegial and collaborative” thus far.

“They’ve been a completely honest broker and we feel good about our relationship with them,” Dorsey said. “I can’t speculate about what went wrong in New York… we’re just trying to treat Amazon as they’ve treated us: by being transparent, honest and forthright. They’ve not only accepted who we are and our values, but embraced it.”

Amazon’s skeptics in the county think it’s foolish for local leaders to view today’s news so charitably. Roshan Abraham, an outspoken Amazon critic and a leader of the progressive group Our Revolution Arlington, thinks the company’s sudden decision to pull out of New York should give county officials “significant pause” in dealing with Amazon.

“This demonstrates Amazon’s need for control,” Abraham told ARLnow. “Amazon wants things to go their way, and if it doesn’t, they’ll leave. They’ll hold the county hostage with that threat. They’re clearly not afraid to use that to their advantage.

Abraham hopes the company’s decision to leave New York demonstrates “the power of activists and what activism can achieve,” and emboldens the tech company’s opponents around the county. Though anti-Amazon sentiment has been a bit more muted in the county than in New York, activists have raised concerns ranging from affordable housing to labor and environmental practices to the use of public funds to benefit one of the world’s largest companies.

But local leaders say they aren’t worried about any sort of major community backlash derailing Arlington’s own incentive deal for Amazon, just yet.

“Some things could change a little bit in our performance agreement with Amazon… and this is likely to contribute to some increased heat over the next six weeks,” County Board member Matt de Ferranti told ARLnow. “I don’t want to underplay it, but we’re certainly not panicked by it.”

The Board is still mulling that agreement, which will work out to about $23 million in grant money for the company over the next 15 years. The cash will be drawn only from a projected increase in hotel stay tax revenues that Amazon is expected to generate.

A vote on that deal was delayed after originally being targeted for this month, and Dorsey says the Board is currently eyeing March 16 for the big decision.

“We are excited that Amazon’s plans for Virginia remain in place and that we can continue working together to position Virginia’s dynamic tech sector for healthy, sustained, statewide growth,” Stephen Moret, the president and CEO of the Virginia Economic Development Partnership (which helped broker the Amazon deal) wrote in a statement.

Here’s the full Amazon statement about its Valentine’s Day breakup with NYC:

After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

We are disappointed to have reached this conclusion — we love New York, its incomparable dynamism, people, and culture — and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.

We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.

We do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.

Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.

Amazon Signals It Could Sign Agreement with Local Unions to Govern Arlington Construction

By Alex Koma

Amazon is showing an increasing willingness to sign a collective bargaining agreement with local unions before it sets to work building new office space in Arlington, perhaps meeting a frequent demand of activists concerned about the tech giant’s labor practices.

Though the company cautions that nothing is set in stone until county officials formally sign off on an incentive deal to bring the tech giant’s new headquarters to Crystal City and Pentagon City, Amazon is sending signals that it’s open to the prospect of striking a “project labor agreement” with construction workers who could someday erect the company’s future home in Arlington.

Should the company someday strike such a deal, commonly known as a “PLA,” the agreement would set out the employment conditions for all workers involved in Amazon’s construction efforts (whether or not they belong to a union) before the company starts accepting bids for the project. The PLA could govern everything from pay rates to workers’ compensation claims, and the agreements are generally designed to ensure labor peace during a major project while also improving conditions for workers.

“We’re definitely open to it,” Amazon spokeswoman Jill Kerr told ARLnow. “But this is all still pretty early. We really have our heads down, focused on working with the community on this initial package for approval before county officials.”

Kerr says that company has already held an initial meeting on the topic with representatives from the Baltimore-D.C. Building Trades, a coalition of unionized construction workers, and JBG Smith, the company’s future landlord at some existing buildings and development partner for other properties.

A spokesman for JBG Smith declined to comment on the deliberations, but Kerr stressed that discussions were “all hypothetical” and remain very much in the earliest possible stages of debate. Amazon plans to both build new offices in Pentagon City and renovate others in Crystal City, and Kerr believes it’s too early to say how any future PLA would apply to that range of projects.

However, Steve Courtien, the D.C. field representative for the building trades, came away from the meeting cautiously optimistic about the prospects of someday striking a deal with Amazon.

During a Feb. 3 town hall on Amazon convened by Arlington Democrats, he said the company seemed generally “positive” about the idea, particularly because the tech firm has worked out PLAs for some of its other projects around the country — Kerr said she was unable to confirm that latter assertion.

As for JBG Smith, Courtien said the idea of a PLA was more of a “mind bend” to them, but he fully expects the development firm to follow Amazon’s lead, given the size of the company’s investment in the area.

“That’s what they have to get past,” Courtien said. “Amazon basically has to tell JBG, ‘this is what we want,’ then they say ‘OK’ and negotiate the PLA with private contractors.”

The County Board is signaling that it’s broadly supportive of those efforts, and members have said in the past that they’ve encouraged Amazon to strike a PLA before moving into Arlington.

But Virginia law prohibits government agencies from requiring PLAs as a condition of allowing new construction (in keeping with the state’s tradition of pro-business, anti-union regulations) and county officials are cautioning that they’ll only have a limited role to play in the discussions.

“I think I speak for the whole Board in saying it’s something we’re all supportive of,” County Board member Erik Gutshall said during the town hall. “But it’s not something we can legally mandate from them.”

Anti-Amazon activists have been similarly enthusiastic about the idea of a PLA for the company’s construction work, considering the frequent concerns raised about how the tech giant treats its warehouse workers.

Stories of employees being unable to take bathroom breaks without risking their jobs or warehouses filled with boiling heat in the summer and freezing cold in the winter have spooked many county residents. Roshan Abraham, a leading Amazon critic as part of his leadership role with the progressive group Our Revolution Arlington, also points out that the company has pledged to oppose any unionization efforts it encounters at its other new headquarters in New York City.

That’s why Abraham believes it will be crucial for Arlington workers to secure a PLA before Amazon comes to town, though he fears it might not be enough to combat the huge company’s power.

“We shouldn’t stop just at a PLA,” Abraham said during the town hall. “We should be pressuring them even further to stay out of their union-busting behavior, which has been pretty well documented elsewhere.”

Ultimately, Abraham is so skeptical of the company’s business practices that he believes it’s a poor fit for Arlington’s values (even though he is “not that deluded” to believe that the county will turn down the company’s new headquarters).

Board members say they have their own concerns about Amazon’s ethics, whether it signs a PLA or not, but they don’t believe they’re substantial enough to justify barring the company from moving in.

After all, Gutshall pointed out that Arlington is also home to Boeing, a major military contractor, and while he may not like that they “manufacture equipment that is designed to kill people all over the world,” he hasn’t tried to chase the company away.

“We’ve not made it a condition of a corporation locating here or a resident locating here to abide by our progressive values for how you conduct your business,” said County Board member Katie Cristol. “Some 10 or 15 percent of Arlingtonians voted for Donald Trump. I’m not a fan of that, but I’m not going to try to kick them out of Arlington County or say they can’t live here.”

Photo via JBG Smith

Northam Signs Amazon Incentive Deal, Finalizing Key Piece of Plan to Bring Tech Giant to Arlington

By Alex Koma

Embattled Gov. Ralph Northam has signed a bill to send up to $750 million in incentive cash to Amazon, quietly sealing the oft-discussed deal to bring a new headquarters to Arlington.

Northam put pen to paper on the legislation last night, a day before it was set to become law without his signature. An identical companion bill is still pending in the state Senate, but Northam’s approval and the General Assembly’s overwhelming support of both pieces of legislation likely means its passage is a mere formality.

Unlike the massive media circus Northam convened to herald Amazon’s selection of Crystal City and Pentagon City for a massive new headquarters, the governor signed the incentives bill without so much as a press release. The governor is currently facing relentless calls to resign, after the revelation that a racist photo appeared on his medical school yearbook page and his subsequent admission that he once wore blackface during a dance competition.

But even that scandal was not enough to derail the completion of the Amazon deal, which Northam and his staffers took the lead in negotiating alongside a small group of state lawmakers.

“This is an investment in the growth of Virginia,” Amazon spokeswoman Jill Kerr wrote in a statement. “It will help diversify the economy and serve as a catalyst for drawing in other businesses and sought-after jobs. We believe the establishment of our headquarters in Virginia and 25,000 new, high-paying jobs, is a benefit to the entire commonwealth, and we are excited for what the future holds.”

Under the terms of the deal, state officials will send the tech giant $550 million in grant money to defray the company’s tax burden, so long as Amazon comes through on its promise to bring those 25,000 jobs to Arlington between now and 2030. Amazon could earn another $200 million if it adds another 12,850 jobs at the new headquarters through 2034, but it’s not committed to doing so.

The legislation just approved by Northam may be the single largest piece of the county’s offer to Amazon, but it’s far from the only sweetener state officials dangled to attract the company.

Two transportation projects promised as part of the deal — a second entrance for the Crystal City Metro station and an expansion of the Crystal City-Potomac Yard bus rapid transit system to Pentagon City — recently won tens of millions in state funds, though three remaining transportation improvements still need to find funding.

Officials also agreed to invest $800 million over the next 20 years to help state universities hand out 25,000 degrees in high-tech fields, in a bid to provide a “tech talent pipeline” that could fuel Amazon’s new headquarters. A Senate bill establishing the program passed that chamber unanimously yesterday (Tuesday), while an identical companion in the House of Delegates also passed that body on a 92-5 vote.

Finally, Arlington officials need to sign off on their own incentive deal with the company, designed to send about $23 million to Amazon over the next 15 years. The money will be drawn from an increase in hotel tax revenues expected to be driven by Amazon’s arrival.

The County Board had long planned to consider the issue at the end of the month, but has since backed off that timeline in favor of examining the deal no earlier than mid-March.

County Board Delays Consideration of Amazon Incentives, After Targeting February for a Vote

By Alex Koma

Arlington leaders are pushing back their consideration of an incentive package to seal the deal for Amazon’s new headquarters by at least a month.

Ever since the tech giant announced its plans to bring 25,000 workers to the county in mid-November, the County Board has pledged to hold a public hearing and vote on the logistics of its offer to Amazon no earlier than its Feb. 23 meeting.

But officials have begun hinting in recent weeks that they may miss that self-imposed deadline, and Board Chair Christian Dorsey confirmed those intimations at the Board’s meeting yesterday (Tuesday).

“February was the date that was targeted, but it’s not going to be before March that it’s before this Board,” Dorsey said. “We just want to give everyone that comfort and peace of mind.”

It seems the Board plans to use the extra time to convene additional community discussions about the company’s plans to move in to Pentagon City and Crystal City.

New Board member Matt de Ferranti added Tuesday that the Board will soon be extending an invitation to all the county’s civic associations for more community meetings on Amazon. De Ferranti said that each group will be able to request that up to two Board members attend a neighborhood gathering on the subject in the coming weeks.

Thus far, the Board has held just a pair of community “listening sessions” on Amazon. Those gatherings have proven to be contentious ones, with the company’s fiercest opponents using the events as chances to register their concerns about the tech giant’s business practices and potential to further gentrify Arlington neighborhoods.

Others still say they’re deeply concerned about the prospect that state and county officials could soon send hundreds of millions of dollars in incentive money to a company owned by the world’s richest man.

State lawmakers signed off on an incentive package just this week to direct up to $750 million in tax rebates to the company over the next 15 years or so, though the county’s offer is a bit more modest.

Arlington is proposing to send $23 million in grant money to the company over the same time period, with the money to be drawn from a projected increase in hotel tax revenues driven by Amazon’s arrival in the region.

The county would also agree to spend $28 million over a 10-year period on infrastructure improvements around the proposed headquarters, with the money coming from a preexisting property tax levied on businesses across Crystal City, Pentagon City and Potomac Yard. Additionally, Arlington has agreed to help the company build a helipad at the new headquarters, though securing federal approval for that effort could prove to be quite challenging.

The County Board could consider the incentive offer next month during either its March 16 or March 19 meetings, should officials not avoid additional delays.

So long as the Board approves the deal, as is broadly expected, the company would then begin submitting plans for the construction and renovation of several buildings across Crystal City and Pentagon City, requiring additional county approvals.

Lawmakers Overwhelmingly Support Incentive Bills to Bring New Amazon Headquarters to Arlington

By Alex Koma

State lawmakers have overwhelmingly approved an incentive package designed to lure Amazon to Arlington, sending legislation to Gov. Ralph Northam’s desk that will direct hundreds of millions of dollars in grant funds to the tech giant over the next 15 years.

Virginia’s House of Delegates passed a bill on the matter by an 83-16 margin today (Monday), after the state Senate signed off on the legislation with a 35-5 vote last week. Northam will ultimately have the final say on the issue, but considering that his administration helped broker the deal with Jeff Bezos’ firm in the first place, it now seems a sure bet that the company has the state’s support for a massive expansion in Pentagon City and Crystal City.

The legislation sets up a “Major Headquarters Workforce Grant Fund” to hand out the payments, designed to offset state taxes Amazon would incur should it set up a massive new headquarters in the county. In all, the bill would send $550 million to the tech giant between now and 2030, so long as the company delivers on its promise to bring 25,000 high-paying jobs to the area.

If the company can come through with another 12,850 jobs after that, Amazon stands to earn another $200 million in incentives, for a total haul of $750 million attached to the project.

Northam and his negotiators promised a variety of transportation improvements around the proposed headquarters in order to make Arlington seem especially attractive to the company, in addition to investments in tech education programs at state universities. But those measures will likely be included as part of the state budget, or funded through other state programs, leaving the incentive bills as the clearest chance for the General Assembly to have its say on Amazon’s arrival.

“When it comes to Arlington and Alexandria, I believe this is exactly what they want,” said Del. S. Chris Jones (R-76th District), a member of a powerful panel of lawmakers who worked with Northam to hammer out Virginia’s offer to the company, during a brief floor debate today.

While the incentive legislation never faced much in the way of serious opposition, it did attract dissenting votes from Republicans and Democrats alike. Six Democrats and 10 Republicans in the House opposed the bill, while all five state senators to vote against the measure were Republicans.

Notably, Del. Alfonso Lopez (D-49th District) was the lone member of Arlington’s legislative delegation to vote against the bill.

Part of the company’s headquarters will be based in his South Arlington district, and he’s already raised concerns about how Amazon will disrupt the area’s housing market. He also chose to send back campaign contributions from the tech giant, after Amazon shelled out cash to all of Arlington’s lawmakers and many other prominent state leaders.

“The thing I keep hearing about over and over again are the prospects of displacement,” Lopez said. “This has been a problem for a really long time. HQ2 has just shown a bright light on it.”

Lopez commended some of the planned investments in housing affordability measures that Northam is promising as part of his offer to the company, but he says that “neighbors are worried about being displaced now, long before money creates any new housing.”

Experts across the region say that it’s no sure bet that Amazon will suddenly drive up all home prices and force renters out of the county, but they do believe it’s a distinct possibility that low- and middle-income people could feel a squeeze from the company’s arrival. And with Arlington and Alexandria committing to just limited affordable housing measures on top of the state’s efforts, some lawmakers do indeed see reason for skepticism.

“Those provisions are too little and too late,” said Del. Lee Carter (D-50th District), an intense Amazon opponent and the legislature’s lone Democratic socialist. “Even if construction were to be completed right now, it’d be too late for some neighbors in my district.”

Others still, Republicans and Democrats alike, questioned the wisdom of handing over such large incentives to a company owned by the world’s richest man. But the potential of the deal to bring so many jobs to the region, with a corresponding flow of tax revenue to local governments, was too promising for many lawmakers to pass up.

“We put together one of the best business deals I’ve ever seen in my 20 years of economic development experience,” said Del. Matthew James (D-80th District) during a committee hearing on the legislation last week. Like Jones, he helped negotiate the deal with Northam’s team.

The House also acted today to combine two identical Amazon incentive bills into one before sending the legislation to Northam, which should remove the need for the Senate to consider a version of the bill to originate in the House. Once this year’s legislative session ends on Feb. 23, the governor will have a month to decide whether to sign or veto the bill.

In the meantime, Arlington officials have yet to consider their own package of incentives attached to the deal, totaling about $23 million in grant funds over 15 years. The County Board plans to take that matter up no sooner than its Feb. 23 meeting, but some members have recently begun suggesting that they could push the issue into March instead.

Photo via @Osubi_C

More Traffic Changes Coming for S. Eads Street As Road Runs Near Pentagon Parking Lots

By Alex Koma
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Construction work around some of the Pentagon’s parking lots is prompting a new round of traffic changes and detours in the area.

Work focused on the new I-395 express lanes previously prompted the closure of the west side of S. Eads Street from Army Navy Drive to where it nears the Pentagon’s south parking lot at S. Rotary Road. Starting yesterday (Tuesday), workers are now moving to the east side of S. Eads instead, allowing traffic to use both sides of the street once more in the area.

Drivers will now be able to access the 395 HOV lanes as normal once more, but there are still some detours planned for the area, according to a press release.

During the morning rush hour, from 6-9 a.m., drivers will be able to use S. Rotary Road to access I-395’s southbound HOV lanes, but won’t be able to access a section of the western side of S. Eads Street. Anyone on 395 will be able to turn left to reach the Pentagon’s south parking lot, or turn right onto S. Eads.

During the afternoon rush hour, from 3-8 p.m., both sides of S. Eads Street will be fully accessible.

Signs will be posted to guide drivers about all these changes, and construction is expected to continue through the spring.

A full 395 HOV shutdown is also scheduled for this weekend, starting at Friday (Jan. 25) at 11 p.m and concluding Monday (Jan. 28) at 4 a.m.

Amazon Shouldn’t Spell ‘Doom’ for Most Local Renters, But Observers Still Fear Its South Arlington Impacts

By Alex Koma

For people fearful about how Amazon will impact Arlington, a single question tends to rise above all others — will the company’s arrival price me out of my home?

There are certainly plenty of other concerns surrounding the company, and the 25,000 jobs it has promised to bring to its new home in Pentagon City and Crystal City, stemming from its highly criticized business practices to its potential impact on roads and transit in the region.

But concerns about housing affordability have most consistently come to the fore since Amazon’s announcement that it would be setting up shop in Arlington, as renters worry that the company’s army of well-paid workers will set off an explosion in home prices and push them deeper into Northern Virginia’s suburbs.

In selling the proposed deal to bring the Amazon headquarters to the county, officials have argued that these fears are largely overblown. Over the last few months, all manner of local leaders have claimed that the company will arrive slowly enough for Arlington to absorb the new residents, and that the county won’t be forced to house every single one of the workers who will spend their days in the new office space.

And, in general, academics, advocates and real estate watchers around the area agree with that line of thinking. For the most part, the experts surveyed by ARLnow on the issue don’t believe that Amazon will have the sort of apocalyptic impact on housing and gentrification that some skeptics fear.

Yet they also caution that the company will almost certainly still push many people out of the county, particularly those of more modest means living in South Arlington neighborhoods. While the county may not face the same massive disruptive impacts as Seattle, which is still struggling to integrate one of the world’s largest companies into its metro area, observers warn that it would foolish to minimize the size of the challenge Arlington is facing.

“I don’t agree with the view of impending doom that Arlington will become San Francisco due to housing problems, but there are real concerns here to address,” said Eric Brescia, a Fannie Mae economist and a member of Arlington’s Citizens Advisory Commission on Housing.

The case against Amazon panic

Fundamentally, the argument minimizing Amazon’s impacts on the housing market includes the same key points.

First of all, the company plans to bring its 25,000 workers to the new headquarters over the next decade or so, not all at once. And, even then, not all of them are likely to live in Arlington, the thinking goes — many could choose to move to other Northern Virginia suburbs, or even to Maryland and D.C., to take advantage of Arlington’s connection to public transit networks.

Many other employees set to work at the headquarters probably already live in Arlington, considering that Amazon says it chose the D.C. region due to its bevy of “tech talent” already in the area.

That means that county leaders are planning on seeing closer to 15 to 20 percent of Amazon’s workers relocate to Arlington specifically, an influx of (at most) 5,000 people. In fact, a report prepared by George Mason University’s Stephen S. Fuller Institute as part of the state’s courtship of Amazon estimates that more than twice as many of the company’s workers will move to Fairfax instead of Arlington.

“This isn’t based on a wish, but based on our prior experience with other large employers,” said County Board Chair Christian Dorsey. “Can we guarantee it? Of course not… but this is the best we can do in projecting how this investment does and does not look like other investments that we’ve had.”

County Board member Erik Gutshall also points out that the D.C. region as a whole has been in the midst of a massive explosion in growth in recent years, and Amazon could merely feel like a drop in the bucket. Based on regional projections, Gutshall says the company’s is “expected to account for about 5 percent of regional job growth over the next 12 years.”

“That, to me, says this alone is not going to be a major driver of housing affordability problems,” Gutshall said.

Regional observers believe that the broad strokes of that argument are accurate.

Brad Dillman, the chief economist for national real estate developer Cortland, points out that Crystal City and Pentagon City both have slightly higher residential vacancy rates than the D.C. metro area as a whole, leaving some room for Amazon employees moving in.

And Christopher Ptomey, the executive director of the Urban Land Institute’s Terwilliger Center for Housing, notes that it’s hardly uncommon to see large government agencies (or other big companies) move into communities around the Northern Virginia area. Based on Arlington’s own past experiences with such changes, he sees no reason Amazon employees would behave any differently.

“Some people come here and decide Arlington has great schools and is convenient, so they’re willing to pay a little bit more to stay here,” Ptomey said. “Others prefer a bigger house and a wider lot and lighter traffic. I don’t think Amazon employees going to be particularly unique in that way.”

Uncertainties abound

Yet, with so many unknowns about the company’s plans still remaining, experts caution that it’s hard to make too many definitive declarations about the make-up of the company’s workforce just yet. That complicates efforts to make predictions about how they might behave when they arrive.

“We need to know: what’s the age range and family type of these workers?” said Jenny Schuetz, who studies housing policy as part of the Brookings Institution’s Metropolitan Policy Program. “A bunch of 25-year-olds will want to live nearby, but they pay a lot more in taxes than they consume in services. More older families will require more space in high-performing schools, but some will want to live farther out.”

Indeed, Schuetz and other analysts warn that the county shouldn’t offer too much certainty about Amazon’s precise impacts until officials start to see how the company’s arrival changes the region.

Arlington officials have simultaneously downplayed the number of people arriving along with Amazon, while also trumpeting how other high-priced tech companies will likely flock to the area to do business with Jeff Bezos’ firm. Until Arlington can evaluate just how real that downstream impact is, experts say it might be useless to simply study just Amazon’s workforce.

“Will just Amazon come here or is this the beginning of D.C. becoming a major tech hub?” Brescia said. “That’s really unknown.”

But Schuetz notes that research shows, in general, “each new tech job spins off roughly five additional jobs.” That might be good news for the county’s economy, but it also complicates the math of predicting how many people will flow into Arlington.

“We know that big headquarters like this have a multiplier effect,” Schuetz said. “They will need supportive services and restaurants to serve the campus directly.”

However many people associated with the company ultimately arrive in Arlington, analysts point out that they are likely to be quite wealthy. The terms of the state’s proposed deal with Amazon require an average annual salary of $150,000 for the company’s employees, and other tech workers bound for Arlington are likely to pull in similar sums.

Even still, Dorsey believes those salaries “are not out of scale with typical earnings in the area,” minimizing the impact they’ll have on the county’s home prices.

A ‘housing crisis’ for low-income renters?

But critics of the county’s pursuit of Amazon believe that sort of mindset ignores the current conditions in Arlington, which already pose problems for renters. Tim Dempsey, a member of the steering committee for the progressive group Our Revolution Arlington, points out that many Board members (including Dorsey himself) won office based on pledges to combat the county’s pre-Amazon “housing crisis” for low-income people and the middle class alike.

“We already don’t have housing for middle-income earners, whether that’s school teachers, firefighters or policemen,” Dempsey said. “The county never asked the community if it was a good idea to bid for this, and when we raised these issues, we were told it was premature to even talk about this.”

Ideally, Schuetz says that Amazon’s workers and their peers won’t be competing for the same types of housing as the people Dempsey is worried about. In all likelihood, “if they’re displacing people, they’ll be displacing other high-income households” by moving into Arlington’s high-rent Metro corridors.

Dillman also foresees developers adding plenty of new housing around the new headquarters, noting that the pace of development has been especially slow in Crystal City as the area’s office vacancy rate has skyrocketed. That should, in theory, provide plenty of new, high-end homes for Amazon arrivals.

The “danger point” that Schuetz fears is what becomes of the “low-cost, older housing” in neighborhoods elsewhere in South Arlington, particularly along Columbia Pike, or in North Alexandria.

“Those could be the targets for redevelopment, where you could potentially charge higher rents,” Schuetz said. “And that’s the area where we’d see displacement.”

Michelle Krocker, the executive director of the Northern Virginia Affordable Housing Alliance, agrees that the fate of apartments running from the Pike to Bailey’s Crossroads and even Seven Corners is one of her prime concerns. But her research also suggests that observers “shouldn’t assume everyone will jump on the bandwagon and sell.”

“Many of these buildings have been in the same family for generations, going back to 1950s, 1960s,” Krocker said. “That means there can be tax consequences and liabilities if they entertain selling. And, for many, the buildings are cash cows.”

Of course, the county could take additional steps to preserve those sorts of buildings to address the issue. And officials say they’re already mulling all manner of strategies to combat housing affordability challenges.

To Brescia, how the county follows through with those plans could provide the clearest answer for anyone searching for the exact extent of Amazon’s impacts.

“It will all really depend on the policy response to this, across the region,” Brescia said.

Two Crystal City Transportation Projects Tied to Amazon Deal Now Set to Win Millions in State Funds

By Alex Koma
1/3

A pair of major Crystal City transportation projects that were key parts of Arlington’s pitch to Amazon are now set to receive millions in state funds.

State transportation planners are recommending that officials send the county $52.9 million to help build a second entrance for the Crystal City Metro station, and another $6.6 million for an expansion of the Crystal City-Potomac Yard bus rapid transit system to Pentagon City.

The money is set to flow through Virginia’s “Smart Scale” program, a pot of money managed by Gov. Ralph Northam’s Commonwealth Transportation Board for big-ticket projects around the state. Each year, state planners recommend a series of improvements for funding by weighing various factors like how each one will reduce congestion or spur economic development efforts.

While the funding arrangement isn’t final just yet, the cash could help spur the construction of two of the five transportation improvements Northam’s negotiators promised to the tech giant in striking a deal to bring Amazon’s new headquarters to Crystal City and Pentagon City. A second, southwestern entrance to the proposed Potomac Yard Metro station, a new pedestrian bridge connecting Crystal City to Reagan National Airport and as-yet-undetermined improvements to Route 1 were also part of the incentive package.

However, the company didn’t put forward any cash on its own to afford the changes, leaving the county and the state to sort out the funding details. And the latest recommendations from state officials suggests that they’ll be drawing the bulk of the funding from “Smart Scale” cash, necessarily shrinking the size of the pot of transportation dollars available for the rest of the state.

Notably, the nearly $53 million set aside for the second Metro entrance is substantially less than the $78 million in “Smart Scale” money county officials requested for the project this past summer, back when it was still no sure bet that Amazon would pick Arlington. The project’s total price tag is estimated at $90.7 million.

County leaders have hoped for years now to build an eastern entrance to the station, to be located at the northwest corner of the intersection of Crystal Drive and 18th Street S., in order to make it more accessible to commuters and improve connectivity with the nearby Virginia Railway Express station.

Yet Arlington had trouble winning regional transportation funding for the project, in part due to some of the vagaries of the deal struck by state lawmakers to provide dedicated annual funding for the Metro system, but Amazon’s impending arrival seems to have bumped the effort to the front of the line. The project didn’t score especially well on the “Smart Scale” metrics designed to evaluate projects for funding, placing 83rd out of the 433 projects submitted for consideration this year, but it was still included among the 11 projects in the Northern Virginia area set to see more cash this year.

Documents prepared for the CTB don’t lay out where the county will find the remaining $37 million or so for the project. The regional Northern Virginia Transportation Authority previously sent $5 million to account for engineering and design costs, but Arlington officials declined to allocate much cash for the project in an update to its 10-year construction spending plan passed last year. Northam could opt to include more funding for the project in his state budget this year; the county’s proposed deal with Amazon also mentions that officials plan to draw up to $28 million over a 10-year period from tax revenues generated by the new headquarters to afford improvements in the area.

By contrast, the expansion of the dedicated bus lane system, commonly known as the “Transitway,” was already in the works when the Amazon deal came into focus. The “Smart Scale” cash will fund all but about $1.8 million of the project’s estimated cost.

The Transitway currently operates between the Crystal City Metro station and the Braddock Road station in Alexandria, with dedicated bus lanes and stations covering about 4.5 miles in all. The expansion would add another .75 miles to the route, linking the Pentagon City Metro to the Crystal City stop.

With Virginia Tech planning a new campus in Potomac Yard to coincide with Amazon’s arrival, and development in the neighborhood ramping up, the bus service would provide a link between all three areas before a new Metro station opens in the Alexandria neighborhood. The project ranked 10th overall on the “Smart Scale” metrics.

The CTB will spend the next few months finalizing these funding plans, and is set to approve them formally in June.

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