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

(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.

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Activists Use Life-Sized Amazon Echo to Protest Company’s Energy Practices in Crystal City

Crystal City commuters were greeted by a bit of an unusual sight this morning at the neighborhood’s Metro station: a human-sized Amazon Echo.

Environmental activists with the group Greenpeace USA invited people at the station to ask questions to their very own “Alexa” Thursday, and posted a variety of signs around the area proclaiming it as “National Landing,” the name chosen by local officials pitching the trifecta of Crystal City, Pentagon City and Potomac Yard for the tech giant’s new headquarters.

It was all part of a demonstration designed to draw attention to Amazon’s practices for powering its data centers scattered across the Northern Virginia area.

Though much of the opposition to the company’s move to Arlington has centered on its labor standards or the incentive money flowing to the massive firm, this morning’s demonstration accused Amazon of falling short of its commitments to use renewable energy to fuel its 55 data centers scattered across the region.

“We asked Alexa if she thought Amazon would be a good neighbor to Virginians and she replied, ‘that depends how much you like breathing clean air,'” Elizabeth Jardim, a Greenpeace USA senior corporate campaigner, wrote in a statement. “Amazon’s cloud including Alexa is powered largely from Northern Virginia, where it uses 88 percent dirty energy — meaning every question to Alexa is driving carbon emissions.”

Activists invited commuters to ask questions of “Alexa” about Amazon’s energy practices, and the life-sized Echo (voiced by local improv instructor Donna Steele) was ready with plenty of snarky replies.

Amazon committed years ago to someday using 100 percent renewable energy at its data centers, run as part of its lucrative Amazon Web Services cloud computing division.

But Greenpeace is accusing the company of abandoning that effort, even as other tech companies in Virginia like Google and Microsoft make progress.

The tech giant responded to the report by saying it’s “firmly committed” to that goal, and claimed that Greenpeace is using “inaccurate data” that “overstate both AWS’s current and projected energy usage.”

The activists stand by their numbers, however, insisting that the company address the issue if it’s to be a good neighbor in Arlington.

“Before Amazon breaks ground on its HQ2 in Virginia, Jeff Bezos needs to take responsibility for Amazon’s already massive energy demand in the state and follow through on its commitment to use 100 percent renewable energy,” Jardim said.

Arlington officials have said in the past they’ve had their own conversations with Amazon executives about the best ways to ensure that the company’s new office buildings across “National Landing” are energy efficient, but those discussions won’t proceed in earnest until the county formally signs off on the incentive package designed to bring the company to Arlington.

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

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

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Morning Notes

More Rumbles of More Amazon — “John Boyd, principal of the Boyd Co. Inc., a private site selection firm in Princeton, N.J… said he wouldn’t be surprised if Amazon decided to add more jobs to its operations in Crystal City.” [Washington Business Journal]

ACFD Rescues Stuck Puppy — Arlington firefighters helped to free a 9-week-old puppy whose head got stuck while being a bit too curious. “She thanked the crew with many kisses,” the department said. [Twitter]

Caps Player Joins Bash — New Arlington-based fitness business Bash Boxing has gained an investor and partner known for throwing a few punches: Washington Capitals winger Tom Wilson. [Washington Business Journal]

Middle School Project May Be Delayed — “The surroundings may prove a bit cramped for a while, but county school officials say they are working up contingencies if the expansion of Dorothy Hamm Middle School isn’t ready in time for the start of classes in September.” [InsideNova]

Favola vs. Merlene Preview — “Has a longtime member of the Arlington Democratic establishment solidly represented Northern Virginia at the state legislature in Richmond, or is there need for new blood?” [Greater Greater Washington]

Civic Federation Diversity Efforts Hit Snag — “Duke Banks hopes one of his legacies will be a commitment to bringing in a younger and more diverse group of leaders… Efforts to bring in new faces at the venerable organization have seen successes, but took a recent step backward with the resignation of two members of the board’s leadership.” [InsideNova]

Nearby: Affordable Homes Disappearing in Alexandria — The number of single-family homes in Alexandria valued at less than $500,000 dipped below the number priced higher last year. [Washington Business Journal]

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Plans Taking Shape for Large New Mixed-Use Development on Amazon’s Doorstep in Crystal City

JBG Smith is starting to sketch out its plans for a major redevelopment of a Crystal City property that will drop hundreds of new apartments and thousands of square feet of retail space directly adjacent to some of Amazon’s new office space in the area.

The developer has now filed preliminary plans with the county detailing the future of a vacant office building at 1900 Crystal Drive. The company has already started some demolition work for the current structure, and previously announced plans to build two new mixed-use buildings in its place, accelerating the project now that Amazon is on the way.

The tech giant plans to lease space at two of JBG’s properties on the same block, buildings at 241 18th Street S. and 1800 S. Bell Street, so this new development could offer Amazon workers with apartments within easy walking distance of the new headquarters.

Developers throughout the area have been racing to build new housing across Pentagon City and Crystal City since the company announced its plans in mid-November, though the neighborhoods do have slightly higher than average residential vacancy rates, for now.

JBG kicked off the redevelopment process in earnest in late January, asking for a slew of county zoning changes and a “site plan amendment” to key the full redevelopment of the block. The plans call for the construction of two large towers, holding a total of 790 apartments. One will be 26 stories tall, the other 25 stories.

Each one will also have space for ground floor retail: 19,390 square feet of space in one tower and 16,800 square feet in the other, according to documents filed with the county.

The developer is envisioning a “pedestrian plaza” in between the two buildings, with room for just under 9,000 square feet of retail in the plaza. The plans even allow for a park to be built nearby, though the documents don’t specify where, exactly, it will be located on the block — but if it is built, a “grand staircase” will connect it to the pedestrian plaza.

When it comes to parking, JBG plans to partially rely on the existing underground garage on the site. The developer plans to demolish part of the garage, but leave 306 spaces unchanged. Then, it hopes to add a new section of the garage with 290 new spaces for a total of 596 available in all.

The project is a long way from being approved, however — the county’s Site Plan Review Committee will now scrutinize these plans, before they head to the Planning Commission and County Board. Vornado/Charles E. Smith previously secured permission to build a 24-story building on the property, but that approval lapsed in 2015. The company spun off its local property holdings in a merger with JBG the next year.

This is far from the last redevelopment JBG is planning in the neighborhood in the coming years. In addition to its large “Central District” project (bringing a new movie theater, grocery store and office space to the area), the company previously told its investors that it could look to redevelop properties including 2001 Jefferson Davis Highway, 223 23rd Street S., 101 12th Street S., and the RiverHouse Apartments (1400 S. Joyce Street).

Though JBG is by far the largest property owner in the area — controlling about 71 percent of the market’s office buildings — county officials hope other landlords take similar steps to refresh nearby buildings.

As for Amazon itself, the company won’t file any plans with the county until the Board signs off an incentive package to formally bring the headquarters to the area. The Board won’t take up that issue any earlier than March.

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Morning Poll: Would You Support Amazon Shifting New York’s Half of HQ2 to Arlington?

Update at 11:45 a.m. — The Washington Post is now reporting that Amazon is “reconsidering” its New York City plans.

Earlier: There is some local opposition to Amazon’s forthcoming Arlington presence and incentive package, but it’s nothing compared to the public protests and opposition from elected officials in New York.

“Amazon doesn’t care about locals who live in Long Island City,” said a key New York state senator who’s among the leading critics of the incentive package offered to the tech giant. “All they care about is how much they can squeeze out of the public till in New York.”

That lawmaker, state Sen. Michael Gianaris, has been appointed to an oversight board that has the power to torpedo the deal. Meanwhile, Virginia’s incentive package for Amazon was signed into law this week.

Should Gianaris or other NYC Amazon critics manage to turn up the heat on the company to a boiling point, it’s possible that Amazon’s plans for a huge new office and 25,000-40,000 additional jobs in New York could fall apart.

Should that happen, hypothetically, might Arlington be the beneficiary? Amazon could opt to make Arlington its full “HQ2,” as originally proposed during the HQ2 search.

If that were to happen, would you support Amazon doubling its presence in Arlington? Or should they look elsewhere?

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GOP Ditches Proposal for More Affordable Housing Cash, Angering Advocates Concerned About Amazon

Republican lawmakers have scuttled Gov. Ralph Northam’s proposal to ramp up state funding for affordable housing, a move that’s irked advocates hoping for more state help as Amazon starts to move into Arlington.

GOP leaders in both the state Senate and House of Delegates have now put forward budget proposals without the $19.5 million spread across two years Northam had hoped to see flow into the Virginia Housing Trust Fund, a program offering low-interest loans for developers hoping to build reasonably priced housing.

Though the fund would be available to applicants across the state, the governor’s effort to massively ramp up cash flowing into the fund was broadly seen as a small way the state could prepare for Amazon’s expected impacts on the housing market across the Northern Virginia region.

“We are outraged that selected members of Virginia’s money committees stripped this critical support for housing for Virginia families,” a coalition of 40 affordable housing advocacy groups wrote in a statement. Signatories include the Arlington Partnership for Affordable Housing, the Arlington Housing Corporation, the Alliance for Housing Solutions, the Arlington Street People’s Assistance Network and the Northern Virginia Affordable Housing Alliance.

“At a time when the state is approving $50 million in subsidies to Micron and $750 million to Amazon, it is wholly appropriate and necessary to invest $19.5 million in housing,” they wrote.

The Senate’s proposed budget includes just $1 million for the fund over the next two years, while the House proposal includes no cash whatsoever.

Northam had planned to fund the increase as part of a suite of proposals to use $1.2 billion in new revenue generated by the federal tax reform passed in 2017. But Republicans, who hold narrow majorities in both chambers in the General Assembly, have been steadfast in removing those spending proposals from the budget as part of a broader fight over the tax revenues, arguing that the state would be better served by sending the money back to some middle-class taxpayers.

“We started building our budget with guidelines to remove from consideration any revenue based on the federal tax changes and to eliminate any spending based on that revenue,” said Del. S. Chris Jones (R-76th District), the head of the powerful House appropriations committee. “We are continuing our multi-year efforts to responsibly invest in a stronger economy, provide more funding and flexibility to local schools and make college more affordable.”

Del. Alfonso Lopez (D-49th District) was hoping for an even larger, $50 million influx into the fund on a one-time basis, yet that push is seemingly facing an uphill battle given the latest GOP budget proposal. He’d also proposed a bill to establish a permanent funding stream for the fund to avoid yearly appropriations battles, but that died on a party-line, 4-3 vote in a House subcommittee.

The budget is still a long way off from being finalized, however. The House and Senate still need to reconcile the differences between the two proposals and, ordinarily, Northam would have a chance to negotiate for his spending priorities with Republican leaders.

But with the governor still facing pressure to resign, and Virginia’s two other top elected officials now engulfed in scandal, there’s no telling just how the remainder of the General Assembly session will play out. It’s currently set to wrap up on Feb. 23.

File photo

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Morning Notes

Good News for Ed Center Project — “It may not come with all the bells and whistles, but county school officials should be able to convert the Arlington Education Center building into classroom space without exceeding the $37 million budgeted for the project. Two estimates… came in slightly under budget to turn the former school-system headquarters into classroom space for 500 to 600 students.” [InsideNova]

Succession Question for Va.’s Leaders — Under fire for each of their own controversies, resignations by Virginia’s Democratic governor, lieutenant governor and attorney general could end up triggering a special election or even elevating a Republican state lawmaker into one of the top jobs. Meanwhile, the chaos in Richmond was the lead story on the national evening news this week — twice — and made the cover of this morning’s New York Post, with the headline “Virginia is for Losers.” [Politico, Twitter]

Amazon and Homelessness — “Along with the promise of 25,000 high-paying jobs will come more expensive housing, and possibly, more people priced out of homes, and some, falling through the cracks. Seattle, where Amazon is based, has a huge problem with homelessness. Will Seattle’s problems become ours?” [WUSA 9]

Possible Presidential Candidate Lives in Arlington — Sen. Amy Klobuchar (D-Minn.), who is considering a run for president, reportedly rents a three-bedroom home in Arlington with her husband, for their time in the D.C. area. The current rent is estimated at $4,500 per month. [Heavy]

Merger of Banks with Local Branches — “BB&T will buy SunTrust Banks for about $28 billion in an all-stock deal, the companies said on Thursday, creating the sixth largest U.S. lender in the biggest bank deal since the 2007-2009 financial crisis.” [CNBC]

Flickr pool photo by Kevin Wolf

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

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.

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Morning Notes

Longtime Election Director Retiring — “Linda Lindberg, who has served for 16 years as elections chief in Arlington, on Feb. 2 formally announced she would not seek re-appointment and would retire over the summer. The move had been expected, and Lindberg’s service drew praise from members of the Arlington Electoral Board.” [InsideNova]

Northam Signs HQ2 Bill — “Amid fallout over a racist photo, Virginia Gov. Ralph Northam has signed legislation which would carry out the state’s promise to Amazon for up to $750 million in incentives if it creates almost 38,000 jobs at its new Arlington County headquarters.” [Washington Post, Washington Business Journal]

Board Wants Project Labor Agreement for HQ2 — “[Arlington County Board member Katie] Cristol says that Northern Virginia is working on protecting labor during Amazon’s forthcoming development of Crystal City through what’s called a project labor agreement, which is a legal document that establishes the terms and conditions for employment on a construction project before it solicits bids.” [DCist]

Cycling Bill Advances in State Senate — A bill that would “classify cyclists as vulnerable road users deserving special protection under the law” has passed the Virginia State Senate. [Twitter, Virginia LIS]

Road Closures for 5K Race — “The annual Love the Run You’re With 5K will take place in the area of Pentagon City on Sunday, February 10, 2019. The Arlington County Police Department will implement [a number of] road closures to accommodate the race.” [Arlington County]

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‘Never Let a Crisis Go to Waste’: Amazon Prompts Debate Over How to Make Arlington Homes Affordable

Arlington leaders agree that Amazon’s impending arrival in the county demands urgent action to address housing affordability — but there’s a lot less agreement on what sort of policy response is necessary to hold down the area’s skyrocketing housing costs.

Some of the changes officials are envisioning are relatively modest ones, expanding on existing efforts that began long before the tech giant announced its plans to bring 25,000 workers to the area. After all, many have argued that the new headquarters set to pop up in Crystal City and Pentagon City won’t prompt the sort of explosion in gentrification that Amazon’s opponents fear.

Other experts see a need for more ambitious tactics, like allowing more development in Arlington to flood the market with more homes. That could well be a politically explosive change in the county, particularly if it means increasing density in Arlington’s oldest residential neighborhoods.

Or perhaps there’s a need for a more creative approach — some progressive activists are championing the creation of a “community land trust,” a strategy embraced elsewhere around the country to allow for the communal ownership of affordable homes.

It presents local leaders with a series of choices that could well define the county’s destiny for decades. And with Amazon’s workers set to start arriving by the thousands next year, officials won’t have long to make up their minds.

‘We should never let a crisis go to waste,” said County Board member Erik Gutshall. “Amazon is bringing a sharp focus to these fundamental issues, and it’s providing us with the opportunity to double down on the sort of planning we’ve done for decades.”

Building on existing efforts

County Board Chair Christian Dorsey agrees that the urgency of addressing housing affordability has been “magnified” since Amazon’s momentous mid-November announcement.

But, fundamentally, he says “the world, as I see it, in terms of housing strategy is not very different than it was” before officials knew they’d won a new Amazon headquarters.

“We’ve identified the tools we’d like to deploy,” Dorsey said. “Now we have to do the hard work of deploying them.”

For instance, the county has long relied on its “Affordable Housing Investment Fund” to provide loans to developers building affordable homes. Those projects often include apartments guaranteed to remain affordable to renters, known as “committed affordable” homes, that are most valuable for people at the lowest end of the income scale.

The County Board allocates cash to the fund each year, and that contribution has recently hovered around $15 million annually. The county is facing a budget squeeze in the coming fiscal year, but as tax revenue from Amazon’s new properties and workers trickles in over the next few years, Gutshall believes the Board should “earmark some of that specifically” for the loan fund.

Similarly, he notes that the Board will also be able to force Amazon to send cash to the program as it builds new offices (most of which will be located in Pentagon City), as developer contributions are the Board’s main tool for seeding the fund with money.

But as market forces persistently push the costs of new development higher, researchers believe the county also needs to preserve the affordable homes it already has.

“Buying up and preserving existing middle-income housing, that stretches public subsidy dollars much further than trying to build stuff from scratch,” said Jenny Schuetz, who studies housing policy with the Brookings Institution’s Metropolitan Policy Program. “The county should be doing more of that preservation work and they should be focusing on that area near the new headquarters.”

The Board has indeed worked to preserve some affordable homes already by setting up “housing conservation districts” to protect older, “garden apartments” designed to be affordable to middle-income renters. Officials first passed the policy in 2017, with plans to eventually allow developers to replace protected homes with even larger affordable developments, but there’s been little movement on the issue since then.

Gutshall argues that the county needs to “accelerate” some of that work, as it seeks to expand “missing middle” housing, commonly understood as homes that fall in between apartments and single-family houses. The Board already loosened some of its regulations for accessory dwelling units, or “mother-in-law suits” on the same property as another home, and Gutshall wants to further tweak zoning rules to allow for more duplexes and small apartment buildings to be built around the county.

“We need to be thinking about how we can keep the character of residential neighborhoods, but still open up housing types and allow for better transitions on the edges,” Gutshall said. “At the same meeting we vote on the Amazon deal, I would love to see a ‘missing middle’ directive… to really identify key areas where think we can make some rapid progress addressing this.”

Touching the ‘third rail’?

Yet the scale of the affordability challenge confronting Arlington has convinced many experts that such changes aren’t enough.

Many observers see a clear and urgent need to ramp up the supply of housing more rapidly, even if that means the construction of the same sort of high-end apartments that are already commonplace in the county. Those homes themselves might not be affordable for low-income renters, but experts argue that any new apartments will have a positive impact on the market as a whole.

“People moving into those new homes come from somewhere,” said Eric Brescia, a member of Arlington’s Citizens Advisory Commission on Housing, who also works as a Fannie Mae economist. “Think of it like the market for cars. A lot of poorer people buy used, not new, at first. New apartments help free up the older stock for people of more modest means.”

But the question becomes where those new apartments will fit, and that leads to some very thorny debates for local leaders.

Anyone walking along one of Arlington’s Metro corridors can see that neighborhoods like Rosslyn and Ballston are already jammed with high-rise developments. Most of the rest of Arlington is reserved for single-family neighborhoods — as much as 87 percent of the county is zoned only to allow for that type of development, according to one recent analysis — but officials might need to reverse that trend as Amazon ramps up the pressure on renters.

“Many people are saying it’s time to look at this exclusive, single-family detached development and how wasteful it is in terms of land use,” said Michelle Krocker, the executive director of the Northern Virginia Affordable Housing Alliance. “But if anything is going to shake communities to their core, this will be it.”

Schuetz points out that these are often wealthy neighborhoods, full of residents “that turn up in large numbers and vote” if they fear encroaching density. But she doesn’t see any choice for the county but examining the prospect of allowing more development in a wider variety of places.

“You have these neighborhoods within a mile, walking distance, of the Metro, but they’re only zoned for single-family homes,” Schuetz said. “It’s just not efficient.”

Dorsey acknowledged that such discussions have always been a bit of “a third rail,” politically, and he understands the impulse of homeowners who might “worry about what more density would look like in their neighborhood.”

“I don’t fault people for wondering if we’re intending for the same density as in Ballston to come to every low-density neighborhood,” Dorsey said. “I get that… that’s why we have to talk about this with real specificity.”

And Dorsey says the Board isn’t considering any sweeping changes to zoning rules across Arlington, even if advocates favor such a move. Instead, he expects a more modest first step is increasing density along some sections of Lee Highway, where the Board is already gearing up an extensive study of its plans for the corridor.

“The potential we have in Arlington is along our major transportation corridors, Lee Highway in particular, where there is more than enough opportunity for substantial amounts of new housing,” Gutshall said. “If we’re able to unlock that, that will carry us through our next 30 to 40 years.”

Following in Bernie’s footsteps?

Beyond these debates about zoning and density, some activists see room for another, very different path for the county to pursue as Amazon looms.

Tim Dempsey has been working with advocates and local leaders on the idea of a “community land trust” since first coming across the idea while reading a bit more about Sen. Bernie Sanders (I-Vt.) during his 2016 presidential bid.

While he was still just the mayor of Burlington, Vermont, Sanders helped create a land trust, among the first of its kind in the nation. In the unusual arrangement, a nonprofit buys up available land, then builds homes atop it.

Anyone can then move in and pay a mortgage on the homes themselves, while the nonprofit retains the ownership of the land. That protects home prices from wild fluctuations, particularly the sort of speculation that could follow Amazon’s arrival in the county, Dempsey said.

“This prevents the land from falling into a speculator’s hands in the first place,” said Dempsey, who sits on the steering committee for the Sanders-inspired group Our Revolution Arlington

And more than just providing low- and middle-income people with a place to rent temporarily, Dempsey believes this method “allows people to have many of the benefits that come with home ownership, like building equity, tax deductions and having very stable housing.”

“They might not get the full value of owning a home, but they probably would never be able to get into homeownership to begin with, otherwise,” Dempsey said. “This could address long-standing social justice issues when it comes to home ownership.”

Without such a model in place, Dempsey fears Amazon will push already skyrocketing home prices higher and force people out of Arlington. That’s why he’s already brought the idea to many Board members and other local affordable housing advocates, where he says it’s largely earned a warm reception.

That’s significant, because Dempsey believes the county has a key role to play in setting up the trust — the county would likely need to provide the cash to get the effort off the ground, and could take a leading role in acquiring land for any future nonprofit.

Dorsey says he’s certainly willing to examine the issue in more detail. But he urged the trust’s proponents to strive for the true “end game” of such a program, rather than getting hung up on setting up a trust, per se.

“I don’t want to get so focused on the prospect of a land trust that we don’t look for the true essence of this opportunity: how do we acquire property that can be made into affordable housing?” Dorsey said. “It could be a land swap, or allowing an entitlement to build something that’s more dense to get a different opportunity elsewhere.”

Where Dorsey and Dempsey can agree is that such a trust would be most effective if it’s a regional effort.

Indeed, with Amazon’s workers expected to settle all throughout the D.C. area, experts of all stripes are unanimous that Arlington can’t hold down housing prices on its own, no matter which strategies leaders pursue.

“Arlington can obviously play a part in this, but housing markets are regional,” Brescia said. “And we need more collaboration across the region.”

File photo

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Arlington Must Open Up Single-Family Neighborhoods to Different Housing Options, Advocates Argue

The vast majority of land in Arlington is reserved for the construction of single-family homes, and affordable housing advocates argue that’s going to have to change if the county wants to adequately handle the region’s looming, Amazon-inspired population influx.

A new report released by the Northern Virginia Affordable Housing Alliance last week argues that Amazon’s decision to bring 25,000 jobs to Arlington in the coming years “should create a regional sense of urgency and commitment to address our housing supply and affordability gap,” a sentiment broadly shared among local and state leaders following the company’s momentous announcement. But where the advocacy group strikes a starker tone than other observers is in its policy prescriptions for meeting that challenge.

The NVAHA’s researchers point to data showing that about 86.7 percent of land in Arlington is zoned exclusively to allow new single-family homes, compared to just under 12 percent where multifamily development, like apartment buildings, is permitted.

They believe that sort of zoning scheme not only chokes off the county’s ability to add more housing, and meet its current supply pressures, but also cuts off the potential for people of more modest means to ever move into the county’s more affluent neighborhoods.

Accordingly, the group sees the clear potential for “allowing more diverse housing types in detached single family neighborhoods,” reversing the current paradigm where the “path of least resistance” for developers is simply to build ever-larger single-family homes in those areas.

“It should be noted that efforts to increase density and flexibility in use have been controversial, both within the region and across the country,” the group wrote. “Awareness of the socioeconomic bias that shaped low-density and exclusionary zoning is not widespread, and the predominance of the neighborhood form in many urban and suburban areas has created strong consumer demand for such communities, making discussions of regulatory reform more politically contentious. However, these barriers are not insurmountable and the moral imperative of breaking down exclusionary barriers justifies the effort.”

The NVAHA acknowledges that there is indeed a role for local governments to subsidize the creation of housing that is guaranteed to remain affordable in order to reach the poorest renters, or to prioritize the preservation of existing affordable homes.

But the advocates also stress that the “disproportionate number of higher-income earners” moving into the area means that market realities will make it difficult for county officials and other leaders to build enough housing on their own. That means relying on more private development, they say, while working to ensure that developers don’t only build high-end apartments that are out of reach for people in lower income brackets.

“By-right development should be liberalized to streamline the costly entitlement process and promote more naturally affordable building types and development scales,” the researchers wrote.

They suggest that duplexes, townhomes and other small apartment complexes could be housing options for the county to consider, and they do note that the county has done some work in this area with its strategies to promote the creation of “accessory dwelling units.” Arlington officials did take some steps to allow smaller apartments attached to larger homes, commonly known as “mother-in-law suites,” but the NVAHA sees room for more bold changes on the issue.

The researchers note that discussions around creating more “missing middle” housing, to fill the gap between subsidized affordable units and luxury homes, often concentrate that the new homes “around transportation corridors or the areas near existing mid-density or mixed-use neighborhoods.” Instead, they see a need for more “diversification” of new housing types all across the different regions of the county.

“A broad-based approach diffuses demand over a wider area,” the group wrote. “If demand for such units is not limited to a small number of neighborhoods by government fiat, any potential impacts on roads, school capacity, and neighborhood form are more likely to emerge gradually, enabling adequate planning and preparation.”

Of course, the advocates would concede that Arlington won’t be able to solve the housing affordability problem on its own, particularly as officials expect that Amazon’s workers will choose to live around the entire region. Accordingly, they urged leaders from across D.C., Maryland and the rest of Northern Virginia to confront the issue together.

“These discussions need to happen in Bowie and Bethesda, as well as Arlington and Alexandria,” NVAHA Executive Director Michelle Krocker wrote in a letter introducing the report. “Regional benefits equal regional responsibilities… Will our elected officials put jurisdictional differences aside and respond for the good of the region?”

Flickr pool photo via NCINDC

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

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.

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Morning Notes

Student Population Predicted to Keep Rising — “Arlington school officials say they now anticipate the total student population to rise an additional 24 percent by 2028, and the latest round of projections has raised fears the school system could fall further behind in its efforts to keep up with elementary-school enrollment.” [InsideNova]

Amazon to First Come to Rosslyn? — “Amazon.com Inc. is said to be in talks to take some or all of the planned WeWork co-working space set to open in Rosslyn later this year as it plots its longer term growth at National Landing,” reports the Washington Business Journal. ARLnow has also heard from a commercial real estate source that Amazon will station its initial Arlington “HQ2” employees at the Rosslyn WeWork, while its temporary space in Crystal City is built out, but we have been able to confirm the rumor. [Washington Business Journal]

Local Elm Tree Honored — An American elm tree on S. Randolph Street “has become the first elm tree to be named a specimen tree in Arlington County.” [Arlington County]

Police Outreach Meeting Postponed — “Due to projected inclement weather, the North Outreach Team Quarterly Meeting scheduled for… January 29, has been postponed. Event details on the rescheduled meeting will be provided at a later time.” [Twitter]

Patient Stops By Fire Station to Thank Rescuers — “Andrew stopped by Fire Station 10 to show his gratitude after being extricated from his overturned Jeep last week on Route 110. Andrew was released from the hospital one day after the accident with no life threatening injuries.” [Twitter]

Nearby: Landmark Mall Development Update — “There are several years until any major construction activity occurs at Landmark Mall, but Alexandria and the mall’s owner are homing in now on the parameters that will guide the nearly 6 million-square-foot redevelopment… Buildings could rise as high as 250 feet, per one recommendation.” [Washington Business Journal]

Flickr pool photo by John Sonderman

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

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

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