Amid persistent concerns that Amazon’s army of new workers will displace low-income Arlingtonians, county leaders plan to redirect their existing investments in affordable housing to better serve the areas impacted by the new headquarters — but the county won’t be upping its financial commitment to spurring the construction of reasonably priced homes.
While critics of Arlington’s decision to court Amazon’s HQ2 have focused on everything from the headquarters’ potential impact on county schools to its transportation systems, the tech giant’s impact on housing prices has perhaps drawn the most scrutiny of all.
The D.C. region has already seen a housing crunch in recent years, and all manner of experts have theorized that the arrival of Amazon’s thousands of highly paid workers will only worsen the county’s challenges. Accordingly, Virginia’s offer to Amazon includes a frequent emphasis on the region’s commitment to addressing local housing woes, and it touts a $150 million investment in affordable housing by Arlington and Alexandria over the next decade. The state has also pledged massive investments in existing programs through its Virginia Housing Development Authority.
But the details of the proposal contain a bit more nuance. The county won’t achieve that affordable housing investment by increasing its annual contributions to various housing-focused programs; rather, it will earmark about a third of those funds for projects creating affordable homes in Crystal City, Pentagon City and along Columbia Pike.
“We’re hoping that will help us create 1,000 new committed affordable units in that area,” County Board Chair Katie Cristol told ARLnow. “And that’s joined by the new commitment from the state, so we’re clearly making this a priority.”
The county currently sends about $21 million to affordable housing efforts each year, county economic development spokeswoman Cara O’Donnell said. That includes just over $14 million to the Affordable Housing Investment Fund, a loan program designed to encourage affordable developments, and contributions to other loan repayment programs for low-income renters.
That means about $7 million each year will be dedicated to housing affordability programs impacting the neighborhoods surrounding Amazon’s new headquarters. Cristol also hopes to increase that amount as new tax revenues from the company flow into county coffers, though Arlington will need a few years to truly feel those revenue impacts.
Michelle Winters, executive director of the Arlington-based Alliance for Housing Solutions, was hoping to see the county step up its total commitment to affordable housing funds immediately, not simply move money around. She points out that, even with the county’s existing efforts, Arlington has seen dramatic declines in the amount of both “committed affordable” homes, where housing prices are controlled, and “market rate” affordable homes, which are designed with prices to match the current housing environment.
“It’s going take additional analysis to determine if this will actually be enough to meet the needs arising from Amazon and other growth in the region,” Winters said.
More intense Amazon skeptics, however, believe that anything short of a full-court press from the communities surrounding the new headquarters will spell disaster for renters in the area. State Del. Lee Carter (D-50th District) fully expects that Arlingtonians priced out of the county will soon flock to outer suburbs like his Manassas-area district, causing a ripple effect throughout the Northern Virginia region.
“I live in a one bedroom apartment in Manassas; my rent’s going to go up, and I’m going to get priced out of my own district,” Carter said. “It speaks to the flawed conventional wisdom around economic development. It says that more jobs are always good: but at what cost?”
County officials don’t see the situation as being quite so dire, however. They note that up to 20 percent of the workers Amazon plans to hire likely already live in the area, and that employees will arrive gradually in Arlington over the next few years, not simply show up all at once and disrupt the housing market overnight.
Arlington leaders also believe they’ll have more tools at their disposal to address housing affordability by the time Amazon starts truly ramping up its hiring.
One key way the county earns money for the Affordable Housing Investment Fund (AHIF) is by forcing developers to make contributions to it as they win local approvals for massive new projects. Amazon won’t be building much in Arlington right away, choosing to move into some existing space in Crystal City to start — that’s an outcome affordable housing advocates feared, as the company won’t be required to chip into the AHIF until it starts sketching out construction plans.
But County Board member Erik Gutshall points out that Amazon has big plans for future construction in the area, which will eventually result in “straight contributions” to the AHIF. Amazon has already purchased large tracts of land in Pentagon City from developer JBG Smith, and could opt to fully re-develop some of the existing buildings it’s leasing someday.
“Over time, everything is going to be new,” said Board Vice Chair Christian Dorsey. “They’re not just going to stay in existing 1960s buildings. Permanently, they’re building new stuff.”
Yet Winters argues that programs like the AHIF can only do so much to create new affordable housing in the county. She credits the county for some of its work to preserve some older, moderately priced homes, but urged officials to do more, with greater urgency.
“While additional subsidy and investment is absolutely needed, it’s not the only thing that it’s needed,” Winters said. “We absolutely need to ramp up the pace housing is added to the county.”
Other urbanists are willing to call for even more transformative changes to make that happen, now that Amazon has arrived.
Or, independent of Amazon's decision, all localities in DC metro need to build more housing, *esp* in wealthy nhoods w/ good schools, transit, and jobs. That means North Arlington, Ward 3, Bethesda, etc. https://t.co/I3rg9A8egE
— Jenny Schuetz (@jenny_schuetz) November 13, 2018
Cristol acknowledged that “the one thing we can’t address through public policy is speculation in the market,” and early estimates suggest that speculation will be no laughing matter — McEarney Associates, a group of Northern Virginia realtors, released a report estimating that overall home prices will rise anywhere from 20 to 30 percent in the wake of Amazon’s announcement, with appreciation rates “north of 15 percent” in the immediate vicinity of the new headquarters.
Accordingly, Cristol does see a need to “meet the supply challenge,” but she’d prefer to double down on some of the county’s existing efforts to loosen zoning rules for “accessory dwelling units” or allow more renovations to older duplexes, rather than pursue more dramatic changes.
“We need to increase our urgency in expanding housing options among that ‘missing middle’ housing stock,” Cristol said.
Restaurant Owners Eye Crystal City — “Andrew Dana, owner of Parkview bagel sensation Call Your Mother and lauded Petworth pizza spot Timber Pizza Co., texted his business partner Jeff Zients on Tuesday night with one question: ‘How do we get into Amazon HQ2?’ It’s a question many restaurant and bar owners will likely be asking in the coming months as Crystal City and Pentagon City prepare to host parts of Amazon.com Inc.’s HQ2 and its eventual 25,000 employees.” [Washington Business Journal]
Last Vehicle Decal Deadline is Tomorrow — “Nov. 16 is the deadline for owners of vehicles garaged in Arlington to display the 2018-19 county vehicle decal. Decals, which signify payment of vehicle taxes, should be placed adjacent to the state-inspection sticker on the driver’s side of the windshield.” [InsideNova]
Columnist: Ban Cars in National Landing — “It seems pretty obvious what Arlington, Amazon, and JBG Smith (Amazon’s future landlord) absolutely need to do: Take the dramatic but wholly necessary step of banning cars and closing all the parking lots throughout National Landing.” [Washington City Paper]
Home Sales Down, Prices Up — “The arrival of Amazon may change things over the long haul, but for now, the Arlington real estate market seems to be moving through a dormant period, sales-wise – with few signs of improvement on the near horizon. But while sales were down, the average sales price was up slightly and prices of single-family properties averaged more than $1 million during the month, according to new figures.” [InsideNova]
First Word of HQ2 Win Received in Wendy’s Parking Lot — “Virginia learned it had won the biggest economic development contest in U.S. history when a low-profile state official got a phone call in the parking lot of a Wendy’s restaurant in the Shenandoah Valley at 2 p.m. Monday.” [Washington Post]
Tips for Thanksgiving Travel at DCA — “Construction delays and big holiday crowds mean you’ll have to add extra time to fly in or out of the D.C. region’s airports for much of the next month and a half.” [WTOP, MWAA]
Flickr pool photo by Lisa Novak
For pedestrians, cyclists and drivers alike, Crystal City has never been the easiest neighborhood to navigate — and Amazon’s looming arrival in the neighborhood has stoked fears that things could get worse in the area long before they get better.
But now that the tech giant has officially picked Arlington for its new headquarters, county officials are free to unveil their grand plans for allaying those concerns and fundamentally transforming transportation options along the Crystal City-Pentagon City-Potomac Yard corridor.
Virginia’s proposed deal with Amazon calls for the pairing of state dollars with money from both Arlington and Alexandria to make a variety of projects long envisioned for the area a reality — so long as the tech giant holds up its end of the bargain and creates targeted numbers of new jobs, of course.
It adds up to a complex mix of funding sources that defies easy explanation, but would be in service of a massive shift in the transportation network surrounding the newly christened “National Landing.” And, as last week’s nightmarish traffic conditions created by the shutdown of the Crystal City and National Airport Metro stations helped prove, the county is in desperate need of an upgrade in the area.
“All of these plans which been long gestating without a path to realization, they’re all going to come together,” County Board Vice Chair Christian Dorsey told ARLnow. “All the great things we’ve diagrammed on paper now have a path to reality.”
The main transportation projects included in the pitch to Amazon are:
- A second, eastern entrance to the Crystal City Metro station
- A second, southwestern entrance to the proposed Potomac Yard Metro station
- A new pedestrian bridge connecting Crystal City to Reagan National Airport
- An expansion of the Crystal City-Potomac Yard bus rapid transit system
- Improvements to Route 1 through Crystal City and Pentagon City
“Many of these we’ve already included in our prior commitments, whether it was our [10-year Capital Improvement Plan] or other long-range planning documents,” said County Board Chair Katie Cristol. “But we pulled these together as a way of saying, ‘This is our overarching vision for the area.'”
Certainly, the aforementioned projects were all on various county wish lists over the years — the Crystal City Transitway expansion to Pentagon City is perhaps the most developed of any of the proposals, with the county convening a public meeting on the matter just last week.
The difference is that many of the projects have largely lacked the necessary funding to move forward. The county still needs another $15 million to fund the Transitway project, which is now set to come from the state, and the other efforts need substantially more money than that.
The second entrance at the Crystal City Metro station has been a particularly challenging project for the county.
The Northern Virginia Transportation Authority, a regional body doling out funding for transportation projects, recently awarded Arlington only a small shred of the funding it was looking for to move the station forward. The county’s gloomy revenue picture previously forced Arlington to push the project off into the long-term future, and it remained a very open question whether the second entrance would score highly enough on state metrics to win outside funding.
Those concerns vanish virtually all at once for the county, and that could be quite good news for both Crystal City residents and Amazon’s future workers. Though the exact details need to be worked out, the new entrance would be located at the northwest corner of the intersection of Crystal Drive and 18th Street S., with $82.5 million of the project’s $90 million price tag coming from the state through the Amazon deal.
Cristol hopes the project will “transform the beating heart of Crystal City” and encourage its new residents to rely on Metro. She notes that the Crystal City and Pentagon City Metro stations have seen a combined 29 percent drop in ridership since 2010, as the military and federal agencies moved out of the area, and hopes thoughtful transit strategies around Amazon’s arrival will reverse that trend.
Stewart Schwartz, executive director of the transit advocacy-focused Coalition for Smarter Growth, added that a second entrance will help the area manage demand as thousands of employees flock to one of Metro’s sleepier stations.
“By having entrances at each end of the platform, you’re reducing the people congestion at escalators and gates, which is huge,” Schwartz said. “And we know that walking distance makes a big difference in how many people use transit. So to the degree we can shorten it, we should do it.”
Schwartz also hopes the new entrance will provide better accessibility to the area’s Virginia Railway Express station (located a few minutes’ walk up Crystal Drive) for anyone looking to reach the more distant sections of D.C., or Northern Virginia’s outer suburbs. The VRE is even weighing an expansion of the station in the coming years, which would put an entrance directly across from the second Metro access point.
County Board member Erik Gutshall points out that the proposed bridge to DCA would land in just about the same spot. A feasibility study backed by the Crystal City Business Improvement District suggested that an office building at 2011 Crystal Drive would make the most sense for the pedestrian connection, which Gutshall notes also matches up with an entrance to the Mt. Vernon Trail.
All of that could someday add up to a promising transit hub in the area, which developer (and future Amazon landlord) JBG Smith has already begun advertising in its marketing materials.
“You can bike, walk, ride VRE and ride Metro, all together,” Gutshall said.
The project will need about $36 million to become a reality, with $9.5 million chipped in from the state and the rest coming from Arlington and the NVTA.
The county will need even more cash for the Route 1 improvements: about $250 million in all, with $138.7 million coming from the state’s Amazon deal. The proposal doesn’t include a funding stream for the rest, but the changes could be quite substantial indeed.
The documents don’t lay out details beyond a goal of improving the “pedestrian improvements” on the road, but officials say a guide could be the changes detailed in the county’s Crystal City sector plan. Those plans involve bringing the highway to the same grade as other local roads, eliminating the soaring overpasses that currently block off large sections of the neighborhood.
“This may, in fact, lead to the total reimagining of Route 1,” Dorsey said.
In all, the county expects to spend about $360 million — about $222 million in already committed funding and $137 million in future grants — to fund transportation improvements in the area. The state’s total could one day go as high as $295 million, depending how many workers Amazon ends up hiring for the area.
The county’s commitment is large enough to give some local budget minders heartburn.
“Where will Arlington get $360+ million in transportation bond capacity — since we are bumping up against our credit limit for the next decade or more, without meeting all school needs?” local activist Suzanne Sundberg wrote in an email. “Raising the tax rate would be my first guess. We can probably expect to see our real estate taxes double over the next 15 years.”
County Manager Mark Schwartz has often warned about the strain on the county’s debt limit precipitated by recent fiscal pressures, and taxes may well go up on residents in the coming years, even with the Amazon revenue windfall.
But Dorsey waived those concerns away, noting that the county has long planned for the spending associated with many of these projects, and will have hefty state dollars to rely on for the rest.
“Our investments are already planned,” Dorsey said. “We’re not bringing anything new to the table.”
Amazon’s new headquarters will fundamentally transform Arlington in the years to come, but county officials are hoping to reassure residents that the area won’t change in the blink of an eye.
Instead, Arlington leaders are painting the arrival of the tech giant — and the 25,000 workers set to someday occupy its new office space — as a development that will shape the county’s economic landscape over time, rather than overnight. And, they hope, that will give the county time to prepare accordingly.
“This is not going to feel like a tsunami of new people on our streets or kids in our schools,” County Board Chair Katie Cristol said during a question-and-answer session live-streamed on Facebook last night (Tuesday).
Critics of the county’s courtship of Amazon have long feared the impact that thousands of highly paid workers arriving in the region could have on everything from home prices to school overcrowding. But Arlington leaders have often countered that the region is experiencing dramatic growth at the moment, and seems set to see even more in the future, meaning that Amazon’s arrival might not seem especially out of place.
Now that Jeff Bezos and company have made the big decision, targeting Crystal City, Pentagon City and Potomac Yard for half of its proposed second headquarters, officials remain confident in those predictions. Cristol, for instance, noted Tuesday that the tech company could draw as much as 15 to 20 percent of its new workforce from current county residents.
“They located here because they want access to the tech talent we have here,” Cristol said.
As for the rest of the new Amazon staffers, Arlington Economic Development Director Victor Hoskins pointed out that they won’t be arriving on the county’s doorstep next week, or even next month. Under the terms of the company’s proposed deal with the state, Amazon would only hire about 400 workers for the new Arlington campus next year.
That number will ramp up sharply over time, however, leaping to 1,180 new staffers in 2020 and then 1,964 workers the year after. But Hoskins noted that the pace of change would’ve been even more dramatic had Amazon stuck with its original plan to house all 50,000 workers in one city, rather than splitting “HQ2” between Arlington and New York City.
“After February, when the deal is set to be approved [by the Board], you’ll see the first employees arriving,” said County Manager Mark Schwartz. “Beyond that, I don’t think people will see a lot different in first year… It’ll become more noticeable a few years out.”
For parents nervous about how many kids those new workers will bring with them, Cristol is also optimistic that the school system will be able to handle the influx of students. She expects that the county will only see two to three additional students in each school per year, and that’s only when Amazon fully ramps up hiring in the coming years.
Depending on how the county is calculating that figure, such an increase would work out to anywhere from 70 to 105 new students enrolled in Arlington Public Schools each year, at a time when the school system is already struggling with severe financial pressures to match rising enrollment.
“That’s not nothing,” Cristol said. “But compared to the 500 students per year that APS is already adding, it’s really manageable.”
But Schwartz noted that, under the county’s revenue-sharing agreement with APS, roughly half of the tax revenue that Amazon generates will flow into the school system’s coffers. He estimates a $315 million increase in tax revenue over the life of the county’s deal with Amazon, which beats county projections by about $160 million between now and 2030.
Of course, Schwartz says the county will still feel some pain in the short term. Though Amazon represents a tax windfall for Arlington, he warned that it will take time for the county to feel the benefits — and that means that painful measures like layoffs, service reductions and tax increases remain on the table for the county’s new budget.
“We’ve been through several difficult budget years and we have a couple more to bridge to where we’re going to be,” Schwartz said.
Cristol acknowledged that there are some “difficult short-term conversations” on the way in the county, particularly as Arlington tries to prepare for Amazon’s impact without the tax revenues it needs to fund necessary projects and services.
But she also pledged to be open to having those difficult discussions. Some Amazon skeptics have already called on the Board to hold multiple town halls focused on Amazon alone, and Cristol said officials plan to do so, and more.
“Let us know if you want us to come meet with your civic group,” Cristol said. “We plan to have many conversations in the community about this.”
Crystal City Business Owners Ready for Facelift — “[Crystal City’s] reputation is sufficiently anemic that Amazon announced it is rebranding the area where it will build its hub ‘National Landing,’ a change that aroused next to no protests from most local proprietors. ‘Whatever Jeff Bezos wants is fine with me,’ said Billy Bayne, owner of the Crystal City Restaurant Gentlemen’s Club, referring to Amazon founder and chief executive Jeffrey P. Bezos, who owns The Washington Post. ‘I’m just happy he’s here.'” [Washington Post, Greater Greater Washington]
Calls for More Housing — The arrival of Amazon has prompted some urbanists to start calling for upzoning and the creation of more housing density, including in wealthier neighborhoods. [Twitter, Twitter]
More on New VT Campus in Alexandria — “When fully realized, the $1 billion Innovation Campus, which includes state support, will spark discoveries and help fill immense demand for high-tech talent in the greater Washington, D.C., area and beyond. The Commonwealth of Virginia and Virginia Tech have committed to provide $250 million each to seed the project.” [Virginia Tech]
Get Ready for Snow — Arlington is expected to get its first snowfall of the season Thursday, with up to an inch of snow and sleet falling Thursday morning before changing to rain. Forecasters, meanwhile, are calling for a snowier than usual winter, with up to two feet of snow falling inside the Beltway over the course of the season. [Capital Weather Gang, Twitter, Capital Weather Gang]
‘Doug the Scammer’ is Now in Arlington — A notorious scammer has apparently crossed the river from D.C. and is now trying to scam people in Arlington. His latest targets: restaurants in Courthouse. [PoPville]
Suicide on Roosevelt Island — The brother of a D.C. man arrested on weapons charges and accused of saying that “the 11 victims of the Pittsburgh shooting ‘deserved it'” shot himself on Roosevelt Island on Saturday, Oct. 27, hours after the massacre at the Tree of Life synagogue. [Washington Post]
What Amazon Employees Are Reading — Amazon employees are very interested in reading ARLnow articles about Amazon, but the most-read story on the site among Amazon workers over the past week is about the opening of Bethesda Bagels in Rosslyn. [Twitter]
(Updated at 4:05 p.m.) Concerns about the wisdom of doling out millions in incentives to lure Amazon to Arlington have abounded ever since rumors first kicked up that the company could head to the county — but Tuesday’s celebration of the move in Pentagon City didn’t betray much trepidation among state and local leaders.
Instead, Gov. Ralph Northam and a cadre of others devoted the afternoon to hailing the tech giant’s decision to bring a new headquarters to Arlington as a transformative one for the region.
Crystal City and its surrounding neighborhoods have long struggled with a high office vacancy rate, ever since the military and other federal agencies fled the area years ago, a problem that vanished virtually as soon as Jeff Bezos and Amazon’s leaders tabbed the newly dubbed “National Landing” for half of their planned “HQ2.” Accordingly, the mood among local leaders was positively ebullient — even as they persistently sought to quell a nervous public’s fears about the company’s impact on the region.
“This proposal to Amazon represents a new model for economic development in the 21st century,” Northam told a crowd of more than hundred elected officials, business leaders and members of the media. “This recognizes the need to minimize impacts on the region… and these incentives we’ve proposed will generate a net positive return from day one.”
Certainly, no aspect of the county’s pursuit of the tech giant has attracted quite as much scrutiny as the incentive package it would offer to help Arlington stand out over the bevy of other suitors interested in earning Amazon’s attention. Critics from all along the political spectrum feared that the state and county could well give away so many tax breaks to the company as to make the project’s benefits on the local economy negligible at best.
But with the deal finally out in the open, after Amazon forced officials into silence for months, Arlington leaders are ready to make the case that they help broker a fair deal for the new headquarters.
“There’s a lot of people who had a worst-case scenario for what they expected to happen, and I think any clear, objective analysis shows that has not been realized,” County Board Vice Chair Christian Dorsey told ARLnow. “I don’t want to make this rosy; we’re going to have housing challenges, transportation challenges, land use challenges, we’re going to have to deal with all of that stuff. But hopefully people recognize the incentives aren’t crippling our commitment to our residents.”
In all, the state and county will combine to give Amazon about $819 million in tax breaks and other investments, with about $23 million in grant money coming from the county over the next 15 years. Arlington will pull that money away from an existing tax on hotel rooms for the $23 million, but all the incentives Amazon receives are contingent on it creating at least 25,000 jobs in the area over the coming years. The company could even reach more than 37,000 jobs by 2034.
However, when the company announced that it would be halving its initial proposal to bring 50,000 jobs to whichever area it selected for a new “HQ2”, cries grew louder that the state might be paying for only half of the investment it was initially promised.
Northam told reporters only that the state “had to make some modifications” in response to that development, but did not elaborate further. But even with Arlington splitting the new headquarters with Long Island City, he praised the deal for its potential to “diversify our economy” away from dependence on the federal government in a transformative way.
Arlington leaders certainly agree with that sentiment.
Victor Hoskins, director of Arlington Economic Development, remembers shouting “yahoo!” when he and his staff received confirmation of the good news last night. He added that the county recently learned that Apple has since started looking elsewhere for its new headquarters, eyeing Fairfax County instead, but that hardly matters given the size of the county’s Amazon deal.
“What’s great about it is it also opens the door to other businesses, because there are other businesses that like to follow Amazon, there are businesses that support Amazon, and there are some businesses that support the community,” Hoskins said. “All of that is going to happen too, and for us that’s the larger opportunity.”
Other officials pointed out that other nearby states put forward incentive packages worth billions, while Virginia’s offer primarily focuses on investments in transportation and education improvements. The deal with Amazon calls for new state investments in everything from Metro infrastructure to new high-tech education programs at Virginia Tech and George Mason University.
“We long ago thought, when we heard New Jersey and Maryland were putting billions of dollars on the table, there’s no way we’re going to compete with that,” said County Manager Mark Schwartz. “Our package is 95 percent investments that we were going to do already, and there’s a small increment there in the [hotel tax], which is paid by people who visit Arlington and not people who live in Arlington, so we’re pretty happy with what we were able to do.”
Still, Dorsey acknowledged that county officials have plenty of work to do to make the sell to the community. The Board is set sign off on portions of its deal with Amazon in February, leaving plenty of time for critics to have their say.
“The taxpayer funded subsidy offers made to Amazon by the state of Virginia have been completely hidden, and there has yet to be any opportunity for local community input on this deal,” Roshan Abraham, an organizer with Our Revolution Arlington representing a coalition of opponents to Amazon’s plans, wrote in a statement. “We oppose a massive state gift to a company headed by the world’s richest person.”
The General Assembly will also get the chance to scrutinize the deal, though the exact details of how it might do so remain murky. A commission of both state senators and delegates convened to review major economic development proposals has already lent the deal its approval, but Del. Patrick Hope (D-47th District) says all 140 state lawmakers will get a chance to vote on the incentive package in next year’s legislative session. Some of the budget amendments to power the proposed investments included in the deal will also go before the General Assembly in the coming years, Hope added.
But Del. Lee Carter (D-50th District), an ardent critic of the company’s potential impact on the region, isn’t holding out much hope that his colleagues will do anything other than simply “rubber stamp” the deal Northam helped broker.
“This deal was put together in shady back rooms, not only out of the public’s sight, but out of the sight of most legislators,” Carter said. “That’s why I think the General Assembly needs to act very differently than it has in the past. We need to actually take the reins back and legislate, instead of letting executive branch do this for us.”
(Updated at 1 p.m.) Amazon’s arrival in Crystal City and Pentagon City seems set to completely transform developments already planned for the area.
The company’s big announcement today (Tuesday) that it would split its planned second headquarters between Arlington and New York City represents a major windfall for JBG Smith, the largest property owner across the newly dubbed “National Landing” — an area including Crystal City, Pentagon City and Potomac Yard. The developer had long sought to fill thousands of square feet of vacant office space in the neighborhoods, much of which will now presumably be occupied by Amazon’s 25,000 workers attached to the project.
But renderings posted online suggest that JBG will also tweak developments already in progress to suit the tech giant’s needs. The new “NationalLanding.com” offers a virtual tour of the area, and promises that the developer “intends to accelerate the planning, entitlement, and development of several projects” to meet Amazon’s arrival in the area — the company expects to occupy anywhere from 4 million to 8 million square feet in office space over the life of the new headquarters.
JBG Smith writes on the site that it currently controls 6.2 million square feet of existing office space in the area, with another 7.4 million of “additional development opportunities in National Landing, excluding Amazon’s proposed land purchase.” In all, the company is planning the following moves in the area, from a press release:
- Lease approximately 500,000 square feet of existing office space at 241 18th Street S., 1800 S. Bell Street, and 1770 Crystal Drive.
- Purchase Pen Place and Met 6, 7, 8 land in JBG SMITH’s Future Development Pipeline with Estimated Potential Development Density of up to 4.1 million square feet. JBG SMITH has the right to time the expected closings of the land parcel sales to facilitate 1,031 exchange opportunities.
- Engage JBG SMITH as its development partner, property manager, and retail leasing agent.
- Commence predevelopment and planning of the first office building in 2018, with construction expected to begin in 2019.
The new renderings include a “multimodal transit hub” located near the pedestrian bridge linking Crystal City to Reagan National Airport, which Amazon has volunteered to help build as part of the project. It’s unclear where exactly the hub will be located.
The renderings also center around a second entrance for the Crystal City Metro station, an amenity long sought by the county but once seemed out of reach due to funding constraints. JBG Smith is currently working on a redevelopment of the area dubbed “Central District,” and those plans included a controversial proposal to build retail space over the new Metro entrance. New sketches suggest that the developer may push ahead with those plans, now that the construction of the second entrance is assured.
“The public and private sectors are currently investing billions of dollars in the National Landing area to improve infrastructure, expand on entertainment and retail options, enhance public spaces and introduce new/repositioned buildings,” Tracy Gabriel, president and executive director of the Crystal City Business Improvement District, wrote in a statement. “We believe that Amazon will help accelerate the transformation underway in Virginia’s largest walkable downtown, further growing and diversifying Crystal City’s economy, bolstering our already strong tech presence and attracting additional companies and investment.”
Also on the way for the area is a helipad, according to the county’s memorandum of understanding with the company.
“Arlington County staff will assist Amazon in its efforts to obtain required County Board, commonwealth and federal approvals for the development, construction, and operation (at the company’s expense)” of the project, according to the memo.
Worker Rescued from Memorial Bridge — A man working on the Memorial Bridge rehabilitation project was injured this morning and transported to the hospital via fireboat and then ambulance. The injuries were reported to be non-life-threatening. [Twitter, Twitter, Twitter]
More Worries About Real Estate Prices Post-Amazon — “Amazon’s possible arrival in Northern Virginia and Queens, New York, has already sent shockwaves through surrounding real estate markets. Mara Gemond, a longtime Arlington, Virginia, realtor… Crystal City — until news broke that Amazon might be splitting its 50,000-employee second headquarters between there and Long Island City in New York. All of a sudden, the two-bedroom condo in a 1980s-era building that had been sitting on the market for nearly three months with no offers, even after a price cut, had a flood of interest.” [CNN, Washington Post, ARLnow]
Metro Closure Causes DCA Gridlock — The closure of the Crystal City and National Airport Metro stations prior to Friday’s evening rush hour, amid a rush to get out of town for the holiday weekend, caused gridlock around the airport, the GW Parkway, Route 1 and other nearby roads. Arlington County Police were dispatched to the area to help with traffic control. [NBC 4, Twitter, Greater Greater Washington]
Chamber Welcomes Amazon — Among those welcoming Amazon to Arlington is the Arlington Chamber of Commerce. “This addition to Arlington is a significant step toward enhancing and maintaining the strength of Arlington’s commercial sector and diversifying our economic base,” the Chamber said in a statement. [Arlington Chamber]
Restrictions for West Glebe Road Bridge Traffic — “A routine inspection of the bridge on West Glebe Road at South Four Mile Run has uncovered deterioration, which will require a vehicle weight restriction of 5-tons, and closure of the sidewalks in both directions. Because safety is the priority, the restrictions are effective immediately.” [Arlington County]
Marymount U Prez Dances with Local Stars — “Dr. Irma Becerra has many accomplishments to her name. Dancing is not one of them, but D.C.’s Dancing Stars Gala could soon change that. Marymount University’s new president is one of eight local celebrities who will vie for $10,000 [this past] Saturday when the annual fundraising competition is held at The Ritz-Carlton in Tysons Corner.” [Fairfax News]
Arlington Resident Buys Airline — Sanford Rederer, a resident of North Arlington and Sarasota, Florida, has purchased Florida-based Island Air Charters. [Business Observer]
Pictured above: Crystal City as it once was — building and wayfinding sign in 2011 (Flickr pool photo by Chris Reed)
(Updated at 10:35 a.m.) After months of breathless speculation, Amazon has made it official and announced that it is coming to Arlington — but the county isn’t alone in winning the tech giant’s second headquarters.
The tech giant announced today (Tuesday) that it will split its $5 billion investment for an “HQ2” between Crystal City and Long Island City in Queens, confirming earlier reporting of the last-minute switch. Nashville will also receive 5,000 jobs as part of the arrangement.
A press conference has been scheduled for 1:30 p.m. in Pentagon City.
Amazon will now set up roughly half of the new headquarters on a site in Crystal City a bid championed by state and county officials, as well as JBG Smith, the region’s biggest real estate owner.
In a press release, Amazon dubbed the site as “National Landing.” A county spokeswoman tells ARLnow that “National Landing” refers to the Crystal City, Pentagon City and Potomac Yard area, which together will make up the footprint of Amazon’s local campus. A map included in the announcement also refers to the Rosslyn-Ballston corridor as “Downtown Arlington.”
More from Amazon’s announcement:
As part of Amazon’s new headquarters, Virginia and Arlington will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with the opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of $3.2 billion over the next 20 years as a result of Amazon’s investment and job creation.
Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted high-paying jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.
The community and Amazon employees will benefit from the Commonwealth investing $195 million in infrastructure in the neighborhood, including improvements to the Crystal City and the Potomac Yards Metro stations; a pedestrian bridge connecting National Landing and Reagan National Airport; and work to improve safety, accessibility, and the pedestrian experience crossing Route 1 over the next 10 years. Arlington will also dedicate an estimated $28 million based on 12% of future property tax revenues earned from an existing Tax Increment Financing (TIF) district for on-site infrastructure and open space in National Landing.
“This is a big win for Virginia – I’m proud Amazon recognizes the tremendous assets the Commonwealth has to offer and plans to deepen its roots here,” said Governor Ralph Northam of Virginia. “Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century, and I’m excited to say that our innovative approach was successful. The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure that will bolster the features that make Virginia so attractive: a strong and talented workforce, a stable and competitive business climate, and a world-class higher education system.”
“We are proud that Amazon has selected National Landing for a major new headquarters. This is, above all, a validation of our community’s commitment to sustainability, transit-oriented development, affordable housing, and diversity,” said Arlington County Board Chair Katie Cristol. “The strength of our workforce coupled with our proximity to the nation’s capital makes us an attractive business location. But Arlington’s real strength is the decades of planning that have produced one of the most vibrant, civically engaged communities in the world. Those plans have paved the way for this investment, and we look forward to engaging the Arlington community about Amazon’s plans and how we can grow together.”
JBG Smith owns huge swaths of property throughout the neighborhood, which was long thought to be a key factor in Arlington’s favor. The company has launched a new website in conjunction with the announcement: Nationallanding.com.
Crystal City’s high office vacancy rate, long a thorn in the side of county leaders that will now be alleviated virtually overnight, also provided plenty of open space for the company to work with as it plans a new campus.
While communities across the country were vying to earn HQ2 as part of an unusual public bidding process, the D.C. region was widely viewed as a favorite to earn Amazon’s new headquarters after the company listed Northern Virginia, Maryland and D.C. among its 20 finalists in January. Even still, the company announced late in the process that it would seek to split HQ2, noting that executives didn’t believe that any of the finalists had enough “tech talent” to fill the contemplated 50,000 jobs for the new offices.
Arlington was long viewed as a particularly strong contender after the county submitted both the Crystal City site and locations along the Rosslyn-Ballston corridor for consideration. Amazon officials subsequently toured those locations this spring, and even linked many of its employees to a particular ARLnow article about the county’s environmental accolades.
With the decision finally made, Arlington officials will now have to grapple with the impact of the company’s arrival — especially now that the company won’t be bringing quite the same investment as it originally promised.
The rosiest estimates of HQ2’s impact suggest the company will create a “prosperity bomb” in the region, offering tens of thousands of high-paying jobs and filling up the coffers of local governments.
But many critics have spent months warning that HQ2’s arrival could exacerbate many of the problems already plaguing Arlington. They reason the arrival of so many wealthy Amazon workers could cause housing prices to skyrocket and make it virtually impossible for low-income people to afford to live in the area, or even strain the region’s already challenged transit systems.
Others still worry that the county has offered a series of lucrative tax breaks and cash incentives to the company, dampening whatever economic benefits HQ2 may offer — the county has steadfastly refused to offer any details of its offer to Amazon, as the company has sworn HQ2 bidders to secrecy. There’s also no telling if the county and state might look to revise its incentive offer, now that Amazon has split up HQ2.
County officials have long insisted that they’re prepared to meet these challenges, however, and with Apple still weighing its own move to Arlington, it seems quite likely that such conversations will dominate their attention in the coming months.
Arlington County and the City of Alexandria trumpeted the selection in a joint press release issued shortly after Amazon’s announcement.
The press release says Virginia Tech will now establish an “Innovation Campus” in Alexandria near the new headquarters, while Arlington and Alexandria public schools will “have access to new resources related to computer science education, to be made available statewide” and George Mason University’s campus in Virginia Square will expand. Also funded thanks to Amazon’s arrival: the long hoped-for second entrance to the Crystal City Metro station and a new High Line-like pedestrian bridge from Crystal City to Reagan National Airport.
Amazon.com, Inc, announced this morning that it has chosen Arlington County to establish a major new headquarters. Arlington and the City of Alexandria, after working together for the last year in a unique and unprecedented regional partnership, are announcing that Amazon will locate in National Landing, a newly branded neighborhood encompassing parts of Pentagon City and Crystal City in Arlington and Potomac Yard in Alexandria. The Commonwealth’s announcement also includes news of a new partnership with Virginia Tech to develop a revolutionary Innovation Campus to fill demand for high-tech talent in National Landing and beyond. […]
Specifically, for the National Landing proposal, Arlington and Alexandria partnered with property owner and developer JBG SMITH to present Amazon with a compelling 150-acre site – a mixture of existing vacant buildings and developable land – seamlessly connected by a robust transportation network, including three Metrorail stations and a commuter rail station, walking and biking paths. The National Landing proposal offers Amazon the opportunity to establish a major headquarters in a thriving, urban environment. The proposal to Amazon that was crafted by Arlington, Alexandria, JBG SMITH, VEDP, and others can be found online.
“We are incredibly pleased to partner with Amazon on their new headquarters,” said JBG SMITH CEO, Matt Kelly. “Their selection of National Landing is a fantastic outcome for the entire region and reflects the close collaboration between the JBG SMITH team and our partners in Arlington, Alexandria and the Commonwealth of Virginia.”
Amazon’s new home at National Landing builds on the strength and history of an established community with nearly 12 million square feet of existing office space and more than 13,000 residential units that also has exciting growth potential. JBG SMITH owns 6.2 million square feet of existing office space and 2.4 million square feet of existing multifamily, and controls 7.4 million square feet of estimated potential density in National Landing, excluding Amazon’s proposed land purchase. Amazon’s initial development plans focus on JBG SMITH-owned properties in Crystal City and Pentagon City in Arlington County, while the new Virginia Tech Innovation Campus will be developed in the Alexandria portion of the National Landing site. Amazon’s new headquarters and related investments are generally consistent with the communities’ adopted growth plans for the National Landing area in both Arlington and Alexandria, which envision high-density, mixed-use, transit-oriented development.
Virginia Tech Innovation Campus
In Alexandria’s portion of Potomac Yard, Virginia Tech and the Commonwealth intend to provide funding for an Innovation Campus near Amazon’s new headquarters to build a graduate campus in the southern portion of National Landing, specifically targeted at tech talent that will benefit all companies in the Commonwealth. The campus will house master’s and doctoral level programs that dovetail with the industry’s most pressing demands. Degree programs and research opportunities will focus on computer sciences and software engineering, while offering specializations in high-demand areas, including data sciences; analytics and collective decisions; security and the Internet of Things; and technology and policy. The campus will build on the growing innovation economy in Alexandria and Arlington, anchored by the United States Patent and Trademark Office, the National Science Foundation, the Defense Advanced Research Projects Agency and now private sector companies like Amazon.
“Launching the Innovation Campus is a watershed moment for Virginia Tech and a great day for the Commonwealth we are committed to serve,” Virginia Tech President Tim Sands said. “As Virginia’s land-grant institution, we stepped up to claim our role of driving economic development by leveraging our strengths in technology and engineering and building on our strong partnerships in Washington, D.C. The Innovation Campus will bring together the highest-caliber students, world-class faculty, smart ideas and forward-thinking companies.”
Investments in the Community
K-12 and Higher Education: As part of the Commonwealth’s increased investment in the tech-talent pipeline, Arlington and Alexandria public schools will have access to new resources related to computer science education, to be made available statewide. They include: ongoing professional development for current and future teachers; high-quality curriculum and related resources; summer and after-school programming for students; and meaningful career exposure and work-based learning opportunities in high-demand fields.
George Mason University’s Arlington campus will also grow, taking advantage of new performance-based investments for new master’s degree programs in computer science and related fields.
Transportation: A review of available transportation services, facilities and associated capacity indicate that regional and local transit systems have significant unused capacity, even during peak travel periods. As a very transit-focused employer, Amazon is expected to help fill that existing capacity, with most employees utilizing public transit, walking, biking or carpooling each day.
To manage this planned growth, Arlington County and the City of Alexandria are investing $570 million in transportation projects, including rail connections, transit facilities, multi-modal streets and transportation technology serving the site, all of which were planned as part of Board- and Council-approved long-term Capital Improvement Plans. Arlington and Alexandria are also actively pursuing additional funding opportunities to advance investments in this corridor.
To augment these local investments, the Commonwealth will invest up to $195 million of non-general fund money in new or expanded transportation projects to improve mobility in the region, including an additional entrance to the Crystal City Metro station and a south entrance off of Potomac Avenue to the new Potomac Yard Metro station. Other projects include improvements to U.S. Route 1 in Arlington County, a pedestrian bridge from Crystal City to Reagan National Airport and a transitway expansion supporting Pentagon City, Crystal City and Potomac Yard in both Alexandria and Arlington. Additional funding would be available if Amazon creates more than 25,000 jobs.
Housing: Amazon’s choice to locate in National Landing comes as the region is intensifying its efforts to increase housing capacity and making more investments in affordable housing. Arlington and Alexandria already have strong existing commitments to funding and supporting efforts to create, protect and preserve affordable and workforce housing. As part of this project announcement, both communities will fund affordable housing, workforce housing and public infrastructure, bolstered by revenues generated from Amazon’s new presence in their communities. Combined, the communities project investment of at least $150 million over the next decade, resulting in the creation and preservation of 2,000 to 2,400 affordable and workforce units in and around the Crystal City, Pentagon City and Columbia Pike areas and throughout Alexandria.
Arlington’s proposed direct financial incentive to Amazon is an annual pay-for-performance grant tied to the company meeting 6 million square feet in office occupancy targets over the initial 15 years with a value of approximately $23 million. The incentive comes from a percentage of the new incremental revenue generated by the County’s Transient Occupancy Tax (TOT), which is a tax paid by tourists and business travelers on hotel rooms or other paid lodging.
In addition to direct financial incentives, Arlington County also proposed using a portion of new incremental revenue generated by Amazon’s arrival within the existing Tax Increment Financing (TIF) area to make strategic infrastructure investments in and around National Landing. The estimated new TIF revenue is projected to be $28m over a 10-year period.
The Arlington County Board will vote on a final incentive agreement no earlier than February 2019 and will follow its regular public engagement and hearing process for development decisions.
Immediately following Tuesday morning’s announcement, local lawmakers started issuing statements on the selection.
From Sen. Mark Warner (D-Va.):
As a former Governor, now Senator, but also as a former technology executive, I’m really excited about the potential Amazon offers not only to Northern Virginia but the whole capital region and the entire Commonwealth. We’ve seen that major investments like these can bring not only thousands of direct jobs but also lead to job growth in other industries. As we welcome Amazon’s new investment in Virginia, we must commit to implementing this announcement in a way that will benefit the whole region and all of the Commonwealth.
From Sen. Tim Kaine (D-Va.):
I’m thrilled that our skilled workforce helped persuade Amazon to bring a major new headquarters and its tens of thousands of jobs to Virginia. Congratulations are in order to Governors McAuliffe and Northam and the local leaders who worked to ensure that this deal includes investments in our education and transportation infrastructure.”
While serving as Governor of Virginia, Kaine focused on job training and education and by the end of his term leading publications ranked Virginia the best state to raise a child and the Best State for Business. Kaine has been a vocal advocate for Amazon bringing HQ2 to Virginia.
From a lengthy press release issued by Rep. Don Beyer (D-Va.):
Amazon’s announcement that it will bring half of its HQ2 to Arlington is a validation of a generation’s worth of work to make northern Virginia an economic engine of the nation.
The Northern Virginia of my youth was a bedroom suburb of the nation’s capital. The Northern Virginia of today is an economic and cultural dynamo, on the leading edge of the technology revolution that is bettering lives around the world. This transformation involved leadership by all sectors — business, higher education, government, and community. […]
Congratulations to Governor Northam, and all my fellow Virginians, for winning a robust national competition. And congratulations to Amazon for selecting a very special community and region, ripe with diversity and promise.
From Virginia Gov. Ralph Northam (D):
— Ralph Northam (@GovernorVA) November 13, 2018
Photo courtesy Crystal City BID
(Updated at 12:45 p.m.) As Arlington and the D.C. area anxiously await the “imminent” announcement that Amazon will be coming to Crystal City, a media staging area is being set up in Pentagon City.
The staging area is on the 1300 block of S. Eads Street, where ARLnow previously saw a large event space being set up then taken away. There is also a police presence on the site and temporary no parking zones — from 8 a.m. to 4 p.m. today — nearby.
So far no press conferences have been announced. A press conference is scheduled at the site at 1:30 p.m.
(Updated at 9:45 p.m.) Amazon will be announcing its “HQ2” plans as soon as Tuesday, the Wall Street Journal reported Monday night.
The paper says New York City and Crystal City will be chosen. Per the WSJ:
Amazon is dividing the second headquarters evenly between New York’s Long Island City and Arlington County’s Crystal City neighborhoods, which are both located directly across from the major city centers… Amazon executives concluded it could recruit more of the best tech talent if it spread the office over two locations. And by halving the size, Amazon would help ease potential issues with housing, transit and other areas where adding tens of thousands of workers could cause problems.
Citing anonymous sources, the New York Times, NPR and others have also previously reported that Crystal City will be one of two destinations for Amazon, as the company splits HQ2 between two cities.
Thus far no Amazon-related press conferences have been scheduled in Arlington.
WWI Commemoration Sunday — “At the 11th hour on the 11th day of the 11th month of 1918, World War I ended with the signing of the armistice. One hundred years later, we are gathering to commemorate the end of the Great War with a ceremony at the Clarendon War Memorial to mark the hour and day the armistice was signed.” [Arlington County, Arlington County]
County Board Election Map — In Tuesday Arlington County Board election, John Vihstadt captured most of the precincts in residential North Arlington, as well as few in South Arlington — including Aurora Hills and Fairlington — but Matt de Ferranti won by capturing the precincts along the Metro corridors and around Columbia Pike. [Blue Virginia]
De Ferranti Says Economic Development is Top Priority — “My top priority will be to work on bringing down the office-vacancy rate so that we can afford to invest in our schools and Arlington’s future,” de Ferranti told the Sun Gazette. “The other priorities – housing affordability, renewable energy and child hunger – will also be areas I will work on, but the majority of my time preparing to serve will be thinking about how we can grow and attract businesses to help us grow and afford the investments we need for our future.” [InsideNova]
Arlington Spots Make ’50 Best Restaurants’ List — Half a dozen Arlington establishments made Northern Virginia Magazine’s 50 Best Restaurants list for 2018. They are: Ambar, Green Pig Bistro, Nam-Viet, Peter Chang, Ray’s the Steaks and SER. None, however, cracked the top 10. [Northern Virginia Magazine]
Arlington Ranks No. 2 on ‘Hardest Working’ List — Arlington is the No. 2 hardest-working “city” in America, second only to the San Francisco suburb of Walnut Creek, according to a new study. Arlington residents spend an average of 41.8 hours per week working and another 4.9 hours commuting, with 16.3 percent of the population leaving work before 7 a.m., the study found. [Haven Life]
ACPD Participates in Alzheimer’s Awareness — “Each year, the Arlington County Police Department (ACPD) encounters memory-impaired individuals, including regular contact with those enrolled in the Project Lifesaver program… Recognizing the importance of education and awareness about this disease for both officers and the community, ACPD is joining the many landmarks, cities and agencies who are members of Project Lifesaver around the globe taking part in Light the World Teal Day by wearing teal ribbons on their uniforms on November 8.” [Arlington County]
HQ2 in Crystal City Would Benefit Tysons, Too — The Tysons area is expected to see increased demand for housing and commercial real estate should Amazon open a large new office complex in Crystal City. “I think Tysons will reap the benefits without having to suffer from the traffic issues that may come as a result,” said one university professor. [Tysons Reporter]
Suspect and Murdered Wife Both Marines — “A woman found dead in [an Arlington] hotel room on Saturday and the man arrested in connection with her murder are both U.S. Marines… The two were seen earlier in the evening at the Marriott while attending their unit’s military ball to commemorate the Marine Corps’ 243rd birthday.” [Newsweek, Task and Purpose]
Arlingtonian Named ABC 7’s Hero of the Week — “In his dedication to the community, Aaron Codispoti switches gears constantly — in the truest sense of the word. He manages a team of more than a thousand people within the State Department, volunteers as an auxiliary police officer with Arlington County — often on bike patrol — and organizes blood drives twice a year.” [WJLA]
Crafthouse Going National — Ballston restaurant Crafthouse is taking its craft beer and elevated pub food formula national. The company, which also has locations in Fairfax and Reston, is preparing for rapid expansion via franchising. [Reston Now]
Local Entrepreneurs Mostly Looking Forward to Amazon — Though Amazon’s anticipated arrival in Crystal City could come with rent and hiring challenges, local entrepreneurs are mostly looking forward to the excitement and amenities the tech giant will bring to the area. [Forbes]
Amazon May Make Defense Hiring Harder — “If Amazon.com Inc. puts part of its second headquarters in Crystal City — as signs are pointing to this week — it could make defense hiring in the region even more competitive. The Seattle-based e-commerce and cloud computing company is already pursuing new deals in the defense and intelligence sectors, industry execs tell The Wall Street Journal, and an expanded presence in Greater Washington — home to thousands of government contractors — would put a strain on a market stretched by a dearth of workers holding proper security clearances.” [Washington Business Journal]
Police Looking for Driver Who Brandished Gun — Arlington County Police are investigating a road rage incident along Columbia Pike in which one driver “pulled over, exited his vehicle, and following a verbal dispute, allegedly brandished a firearm and threatened the other driver.” [Arlington County]
As all signs continue to suggest that Crystal City will soon become home to at least half of Amazon’s new headquarters, affordable housing advocates are increasingly concerned that Arlington won’t force the tech giant to take action to mitigate the new office’s impact on housing prices in the county.
The company’s abrupt decision to split its “HQ2” between Crystal City and New York City, as detailed in a flurry of national news reports, means that Arlington could see only half of the 50,000 new jobs Amazon promised along with the new headquarters. Nevertheless, fears linger that the arrival of even a portion of those workers would further squeeze the county’s already tight housing market.
County and state officials have steadfastly refused to release any details about their pitch to Amazon, including details on potential economic incentives for the company, or any community benefits designed to account for how a sudden influx of thousands of workers might drive up housing prices and demand.
Amazon has also been mum on how it might set up shop in Crystal City, but speculation abounds that the company would move into the thousands of square feet of vacant office space controlled by JBG Smith, the area’s largest property owner. The real estate firm was intimately involved in assembling Crystal City’s HQ2 bid, and Arlington officials have salivated over the prospect that the company could reverse the county’s high office vacancy rate in one fell swoop.
But should Jeff Bezos and company move right in to that vacant space, experts worry that the county won’t have the ability to extract any cash for Arlington’s main tool for spurring the development of reasonably priced homes: the Affordable Housing Investment Fund, commonly known as the AHIF.
The program offers low-interest loans for new construction or redevelopment efforts to add more affordable housing in the county, and the county regularly requires developers behind high-density projects to contribute to the fund, in order to offset the impacts of that development on the rest of the county.
Yet Michelle Winters, the executive director of the Alliance for Housing Solutions, points out that Amazon could well avoid any such contribution, despite bringing thousands of highly paid workers to the area. After all, the company may simply prove to be a very, very large office tenant, and not plan any new construction in the county for years yet.
“These fees are a major component of how we pay for affordable housing in Arlington,” Winters told ARLnow. “But we just don’t know what kind of deal they’re potentially making with Amazon.”
Through a spokeswoman, Arlington Housing Director David Cristeal confirmed that the “county does not require AHIF contributions if a tenant moves into existing space without building anything new.”
“A developer or building lessee would not need to contribute to AHIF if they move into an existing building without requesting additional density and/or a site plan amendment,” Cristeal wrote. Site plan amendments, in general, are reserved for major construction projects.
County Board Chair Katie Cristol agrees with Cristeal’s assessment, noting that the “mechanisms for achieving contributions to the AHIF are tools available to us during the land-use process” only.
“The time at which we’d achieve something like that is as the building is built, not as a tenant moves in, which makes sense,” Cristol said.
What that means for the county’s potential deal with Amazon, Cristol can’t say. She says the county still has yet to work out the details of just how the tech giant would move in to Arlington, making it a bit too early to speculate on technical questions like potential AHIF contributions.
However, she did point out that the whole point of Arlington luring Amazon in the first place is to generate new tax revenue, which the county could then direct into the AHIF or other measures to preserve and create affordable housing.
“The reason to bring in new tenants to Arlington generally is they fund all those things,” Cristol said. “Whether it’s the AHIF, housing grants, public schools, transportation costs… It can be easy to lose sight of that.”
Of course, there are plenty of experts skeptical of just how much Amazon’s arrival will actually juice county revenues, especially if Arlington signs off on hefty tax breaks to lure the company here in the first place. For instance, the government accountability group Good Jobs First, an intense Amazon critic, estimates that localities can end up paying hundreds of thousands of dollars in subsidies for each job that a major new investor generates.
Kasia Tarczynska, a research analyst with Good Jobs First, notes that the county could always limit the tax breaks it offers the company and “use that money for affordable housing, public transit and workforce development.”
“In Boston, for example, as part of the incentive package, the city said it would invest $75 million in affordable housing, instead [of] giving that money to Amazon,” Tarczynska wrote in an email.
But that’s where the county’s secrecy around its offer to the company, which has been criticized by liberal and conservative activists alike, stymies further analysis.
Even still, Winters and Tarczynska both expect that the county could still work out a deal with Amazon that involves a contribution to the AHIF, or other affordable housing measures, even if it wouldn’t be strictly required by county ordinances.
“If I were Amazon, I would pay in more than what would ordinarily be required, because their own workers would benefit from more affordable housing in the community,” Winters said. “This is one of the biggest companies in the world… I’d imagine it could be considered the cost of doing business for them.”
Ben Beach, the legal director for the Partnership for Working Families, notes that plenty of other local officials have negotiated for such concessions as large companies have sought to move in to their communities. The question on his mind is whether Arlington officials will do the same.
“Local governments have a wide range of tools at their disposal; the question is simply political will,” Beach wrote in an email. “And in this case, we know there is substantial public money involved, so there’s really no excuse for anything less than a gold standard community benefits package.”
Photo via JBG Smith
First Incumbent Voted Out in 21st Century — Democrats had few negative things to say about County Board member John Vihstadt during the past few months of campaigning, but voters nonetheless decided to vote him out of office last night, a relatively rare event in Arlington. Per the Sun Gazette: “The last County Board incumbent to be defeated for re-election was Mike Lane, a Republican who in the spring of 1999 won a special election for the seat of Al Eisenberg (who took a post in the Clinton administration) but later that year was defeated by Democrat Charles Monroe.” [InsideNova]
O’Leary Nailed It — Former Arlington County Treasurer (and amatuer election prognosticator) Frank O’Leary was spot on on his analysis of how yesterday’s local voting would shake out. O’Leary “opined that if the Arlington electorate was so large that 100,000 votes were cast for County Board, Democrat Matt de Ferranti would win with about 53 percent of the vote. Presto: Arlington voters indeed cast just over 100,000 votes in that race, and de Ferranti ended up with 53 percent, according to unofficial results.” [InsideNova]
Other Reasons Why Crystal City is Good for Amazon — Should Amazon announce Crystal City as the destination for a major new office campus — despite the disappearance of an event tent that seemed like it might be intended for such an announcement — there are a number of reasons why the neighborhood likely won over Amazon execs. One reason not as widely discussed: Crystal City is already a high-density, mixed-use neighborhood with a relatively small residential population and a long-term plan for more density. In other words, it’s a big green light for Amazon to build out the HQ2 of its dreams, without having to worry much about the NIMBYism that might delay plans elsewhere. [Brookings]
Progress on the Pike for Idido — Idido’s Coffee Social House is getting closer to its opening along the Columbia Pike corridor. This week the cafe filed a Virginia ABC permit application to serve beer and wine.