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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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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

Apartment Fire on Carlin Springs Road — Firefighters are braving bitter cold conditions this morning to fight an apartment fire on the 3400 block of Carlin Springs Road, in the Falls Church section of Fairfax County, just over the Arlington border. Eight people were rescued from the burning apartment building. [Twitter, Twitter]

Garvey Presses for Civility — “One member of the Arlington County Board is making a concerted effort to remind residents of the need for civility in public discourse… [Libby] Garvey said she has noted that, on contentious issues, those with an opinion frequently are digging in their heels.” [InsideNova]

Lowering Child Care Costs in Arlington — “Arlington County has the highest child care costs in the Washington region, largely because we have high land values, tighter regulations, and affluent households. To start to bring down the price and make licensed child care more accessible for more residents, Arlington has embarked on a Child Care Initiative to address local zoning ordinances and child care codes that impact cost.” [Greater Greater Washington]

AWLA Alum in Us Weekly — Olympian Gus Kenworthy was pictured in a recent issue of Us Weekly magazine with Birdie, the dog he adopted from the Animal Welfare League of Arlington this past summer. [Instagram]

Startup Leaves Crystal City — “A notary startup that has called Arlington home since 2015 appears to have moved much of its local operation to Boston as part of a restructuring.” [Washington Business Journal]

Vacancy Increasing at Crystal City Shops? — “Of the 88 storefronts underneath 1750 Crystal Drive, 42 were vacant this week when Bisnow walked the corridors.” [Bisnow]

Crystal House Plan ‘Could Set a Precedent’ — “Plans to double the number units at the Crystal House Apartments will be a litmus test for future development in Crystal City, as Amazon.com Inc.’s second headquarters ushers in 25,000 jobs to the area over 12 years.” [Washington Business Journal]

Flickr pool photo by Kevin Wolf

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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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Spider Kelly’s Co-Owner Launching New Restaurant ‘The Freshman’ in Crystal City

The co-owner of popular Clarendon nightlife spot Spider Kelly’s is planning a new restaurant for the base of a Crystal City office building.

Restaurateur Nick Freshman is launching “The Freshman” at 2011 Crystal Drive, he announced today (Tuesday). He hopes to have it open by sometime in 2020.

Freshman hopes to offer “high-quality coffee, teas, and craft cocktails” at the restaurant, in addition to “breakfast, lunch and dinner options made in-house with fresh local ingredients.”

The Freshman will set up shop in a 3,400-square-foot space that was once home to a Noodles & Company location, which shut down last fall. The restaurant will have room for 120 diners and a 50-seat outdoor patio.

“I’ve seen firsthand how much the neighborhood has changed over the years and I knew I wanted to be a part of the growth,” Freshman, who lives in the area, said in a release. “When Amazon announced that they were coming to town, I knew that the opportunity to be part of this story was just too good to pass up, especially considering this is my backyard.”

Like most of the other office buildings across Crystal City, developer JBG Smith owns the property, and is trumpeting The Freshman as the first retailer to sign a lease in the area since Amazon tabbed the neighborhood for its massive new headquarters.

The company is planning an expansive new redevelopment of other retail offerings nearby, and it’s envisioning The Freshman’s arrival as one in a series of big changes on the way for the newly dubbed “National Landing” neighborhood in the coming years.

“The Freshman is a perfect fit for National Landing given Nick’s longstanding ties to the neighborhood and his concept’s natural appeal to the neighborhood’s residents, office workers and daily visitors,” Amy Rice, senior vice president at JBG Smith, said in a statement.

Freshman is launching the eatery in tandem with Mothersauce Partners, a restaurant advisory and investment firm he launched in 2016. The company has helped found The Eleanor and Takoma Beverage Company in D.C., with similar offerings as Freshman’s plans for the new Crystal City establishment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The case against Amazon panic

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

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

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

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

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

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

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

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

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

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

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

Uncertainties abound

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

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

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

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

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

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

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

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

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

A ‘housing crisis’ for low-income renters?

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

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

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

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

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

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

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

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

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

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

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

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Morning Notes

Memorial Bridge Potholes — Large potholes made for dangerous driving on the under-construction Memorial Bridge over the weekend, but crews started repairing the bridge’s pockmarked surface Tuesday. [Twitter, Twitter]

Poke Restaurant Coming to Ballston — Local restaurant Poke It Up is expanding with a second location. The restaurant, which first opened in the Pentagon City mall food court, is now planning to open this summer at 4401 N. Fairfax Drive in Ballston, next to a new soup shop, Zoup. [Eater]

Shutdown Costing Local Economy Big Bucks — “About $119.2 million per day is removed from the gross regional product each day the shutdown drags on, according to local economist Stephen Fuller, thanks to lost pay of federal workers, contractors and suppliers and the multiplied economic effects of their lost spending. That daily hit… drops to $46.4 million per day once federal workers are ultimately repaid their lost wages.” [Washington Business Journal]

Overturned Vehicle in Crystal City — A driver managed to flip his or her vehicle in a crash last night on 18th Street S., near the Crystal City Metro station. [Twitter]

Board Set to Endorse VRE Funding — “Arlington County Board members on Jan. 26 are expected to endorse a request by Virginia Railway Express (VRE) for state funding to support construction of a new Crystal City station. The transit agency will seek grant funding from the Virginia Department of Rail and Public Transportation, which if approved could cover up to 70 percent of the cost of construction. VRE will fund the rest.” [InsideNova]

Changes to State Inspection Stickers — “The stickers are smaller, in response to complaints that the new sticker placement on the bottom left of the windshield, which started in 2018, resulted in reduced visibility for drivers.” [Tysons Reporter]

Nearby: Alexandria Warns About Opioids — “The City of Alexandria has responded to four suspected opioid overdoses in the last 72 hours, including two fatalities. While recreational use of opioids is always dangerous and illegal, City officials are urging residents to be aware of the medical safety of the drugs, including heroin, that could be extremely concentrated or mixed with something unusual that is resulting in life-threatening situations.” [City of Alexandria]

Flickr pool photo by Eschweik

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Work Could Soon Get Rolling on New Crystal City Bowling Alley

Arlington officials could soon clear the way for a new bowling alley and arcade to set up shop in Crystal City.

The County Board is set to sign off this weekend on plans to open a new “Bowlero” location in the base of The Buchanan apartment building at 320 23rd Street S.

The bowling alley announced plans to expand to the neighborhood last fall, and is now lining up the permits it needs to convert nearly 52,000 square feet of space into a combination entertainment center and full-service bar and restaurant.

Bowlero is now set to move in next to the existing Bar Louie restaurant and Legal Seafood, taking the place of the tech company GDIT and the Queen Amannisa Uyghur restaurant.

According to plans included in a county staff report, visitors will enter the establishment from 23rd Street S., passing through a large video game arcade space. A full bar will sit at the center of the space with as many as 32 bowling lanes surrounding it, according to the report.

County staff are generally supportive of the company’s plans, writing to the Board that the bowling alley will “increase the livelihood of the area, provide diverse cultural and civic facilities to a vast array of demographics and will be an overall quality addition to Crystal City.”

The Board is set to vote on permits attached to the project at its meeting Saturday (Jan. 26). The matter is slated for the Board’s consent agenda, generally reserved for non-controversial items that pass without debate.

Bowlero previously said it was hoping to open the new location sometime in “mid-2019.” The company also operates locations in Centreville and Leesburg.

Should it win the permission it needs, Bowlero’s addition to the neighborhood will be one in a series of big changes for this section of Crystal City.

Not only have several new restaurants, including Federico’s, Los Tios and Fiona’s Irish Pub, decided to set up shop along 23rd Street S., but JBG Smith is also planning on adding an Alamo Drafthouse and other retail offerings nearby as part of its “Central District” project.

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