The recession that kicked off after the country’s housing market collapsed in 2008 devastated communities and families nationwide. But experts say Arlington’s proximity to jobs and contracts from the federal government helped protect the county, and its growing business sector today may also help shield it from future recessions.
How the Great Recession Hit Arlington
Alex Iams, the Interim Director of Arlington Economic Development (AED), said when it came to the last recession, Arlington was “the last in and the first out.”
“In the last recession Arlington fared pretty well from what I can see,” agreed George Morgan, a finance professor at Virginia Tech, in an interview. “It’s not to say that everything was rosy, but compared to other parts of the country, Arlington didn’t do so badly.”
“At least a third of the [local] economy originates with federal payroll or federal procurement spending or other government spending,” said Stephen Fuller, the high-profile professor of public policy and regional development at George Mason University, when asked what helped cushion Arlington during the collapse.
However, Morgan noted that office and multi-family developments saw “pretty dramatic effects” from the recession as he said some companies’ cash-flows dried up and projects were put on pause. That affected those in the real estate development and construction industries.
Morgan also noted that the education and medical sector were hit harder in Arlington than in other parts of the country, but also rebounded faster in the last 10 years. “That’s a big plus if that happens again,” he said of future recessions.
Both economists agreed that lower-wage jobs were hit hardest by the Great Recession. By 2011, the county’s largest food bank reported a record-breaking number of families seeking help.
“In the low wage industries, Arlington basically looks the same as the rest of the country,” said Morgan, of Arlington around that time. “That was not a pretty picture.”
But Fuller and AED director Iams argued that the economic impact on the county of losing 35,000 jobs through federal sequestration was greater. “Base realignment and closure was really our recession,” said Iams.
How Next Recession May Affect Arlington
While predicting economic downturns can be fraught, Iams and the professors agreed the country is prepared if another one happens soon.
“In Arlington, they’re not seeing the signs of [a] recession that you’re seeing it elsewhere,” said Morgan. “It maybe be that Arlington kind of dodges a bullet if there is a next recession.”
The damage the county would sustain would depend on what exactly would cause the next recession.
“If it’s the trade war that causes it, retail will probably suffer,” said Morgan. “But with the Arlington economy being so insulated from trade, I think if that’s the cause of a recession then the Arlington economy will still do well.”
Fuller explained that “anything that is discretionary begins to take a hit,” including elective purchases like cosmetic surgery, luxury fashion, tourism, and restaurants.
But the professors pointed out that many higher-wage industries — like cybersecurity, which is growing across the D.C. area — can actually weather recessions quite well. Morgan cited an Urban Institute report show that the county has a large share of high-paying jobs from business service companies like Deloitte and government contracting jobs via the Department of Defense.
How Amazon Would Impact a Recession
When it comes to Amazon’s massive planned headquarters, the officials said it’s another potential insulator for the county against future recessions by virtue of the 25,000 people it has pledged to hire — and the others businesses and universities its presence attracts to Arlington.
“They know that Amazon burns workers out after 4-5 years, and they’re still software engineers, so they’ll look around for other, similar-type jobs,” said Fuller. “Amazon is going to make Arlington the epicenter of the talent pool.”
‘Mabel’s Restaurant’ Coming to Arlington Heights — The restaurant coming to the grounds of the Dominion Apartments, at the former Sherwin Williams paint store (3411 5th Street S.), is called “Mabel’s Restaurant.” An outdoor seating area is planned for the restaurant, according to permit filings. [Arlington Economic Development]
Northam Visits Amazon — “In June, we were excited to open our first temporary office space for our Arlington headquarters in Crystal City. Today, we welcomed @GovernorVA to tour our new work space and meet with Amazonians from the Commonwealth.” [Twitter]
Crystal City Conducting Survey — “The area encompassing Crystal City, Pentagon City and Potomac Yard – Arlington is a dynamic mixed-use urban center and Virginia’s largest walkable downtown… we are embarking on a place branding effort to uncover our neighborhood story and create a striking visual identity.” [Crystal City BID]
History of Heidelberg Bakery — “Heidelberg Bakery is a local landmark in Arlington… In this oral history clip, Carla and Wolfgang Buchler, owners of the Heidelberg Pastry Shoppe, discuss the lack of diversity in breads that Wolfgang found in America when he first came to the U.S. in the 1970’s–and how tastes have changed, partly due to Heidelberg Pastry Shoppe’s delicious treats.” [Arlington Public Library]
Glebe Road Bridge Project — “The Virginia Department of Transportation on Tuesday, Aug. 13 will hold a community forum on its plans to rehabilitate the Route 120 (North Glebe Road) bridge over Pimmit Run to improve safety and extend the bridge’s overall lifespan. The event will be held on from 6:30 to 8:30 p.m. at Williamsburg Middle School, 3600 North Harrison St. in Arlington.” [InsideNova]
‘Drunkard’ Ruling Won’t Be Appealed — “Virginia’s attorney general on Friday said he will not appeal a ruling that struck down a state law allowing police to arrest and jail people designated as ‘habitual drunkards.'” [Associated Press]
Oil in Sink Causes ‘Fatbergs’ — “If you pour used cooking grease down the kitchen sink, you’re not alone — according to a new survey, 44 percent of respondents in the D.C. region pour cooking oil, fat, or grease down the sink at least occasionally. In doing so — rather than dumping it in the trash–you may be contributing to the creation of something truly horrifying — a fatberg.” [DCist]
(Updated on 07/22/19) Office Vacancy Rate Dropping — “The commercial vacancy rate in the County continues to improve. The vacancy rate as of the second quarter of 2019 stands at 16.6%, down nearly 5% from its historic high of 21% in 2015. Arlington Economic Development also announced it successfully closed 26 deals in FY 2019, representing 7.2 million square feet of office space and 43,000 jobs.” [Arlington County]
County Adopts New Bathroom Policy — “The Arlington County government has adopted what amounts to a […] policy for government-building restrooms and locker rooms. The policy, outlined to County Board members on July 16, will formally allow any individual to use a male or female restroom ‘that corresponds with gender identity or expression,’ county staff said.” [InsideNova]
Human Remains Found Near GW Parkway — Human remains, in a skull, have reportedly been found near the GW Parkway and Reagan National Airport, in the same area where a D.C. cadaver dog was hurt earlier this week, prompting a medevac flight. The dog is now recovering from serious injuries. U.S. Park Police are investigating the source of the remains. [Fox 5, Washington Post, WTOP]
New Provost, Plans for Marymount — “Marymount is proud to welcome the university’s new Provost, Hesham El-Rewini, Ph.D., P.E., who officially begins his duties on campus this week… ‘We have bold plans for the future of Marymount as we strive to become an elite Catholic institution that is nationally recognized for innovation,’ said Dr. Irma Becerra, President of Marymount University.” [Marymount University]
GoFundMe for Westover Residents — A GoFundMe campaign has been launched to benefit residents of Westover whose homes were damaged by flash flooding last week. So far more than $8,000 has been raised. [GoFundMe]
Big Crane Assisting With DCA Project — “A 250 ft. crane is being used to lift and put steel into place for a new 14-gate concourse that will replace Gate 35X” at Reagan National Airport. [Twitter]
Pentagon City Apartment Sold for Big Bucks — “Dweck Properties Inc. has picked up another multifamily property in Pentagon City, not far from where Amazon.com Inc. is settling into its second home. A Dweck affiliate paid $117 million July 9 for the Park at Pentagon Row, a 299-unit apartment building at 801 15th St. S.” [Washington Business Journal]
Flickr pool photo by Kevin Wolf
Officials Pledge Action on Flooding — “Perhaps sensitive to growing community disenchantment over past performance in addressing heavy-rain incidents, County Board members on July 13 pledged to find ways to improve local-government efforts to address the impact of flooding. ‘We have to up our game,’ acknowledged County Board Chairman Christian Dorsey.” [InsideNova]
Residents Demand Stormwater Fixes — “Alexandra Lettow was near tears as she described the losses her family suffered in Monday’s flooding to neighbors and county officials gathered at a home in Arlington’s Waverly Hills neighborhood… It was at least the seventh time the neighborhood had flooded in 19 years.” [Washington Post]
Flood Insurance Doesn’t Cover All Losses — “They have a FEMA-backed flood insurance policy through Liberty Mutual… When the insurance adjuster came Tuesday to assess the damage she dropped a bombshell. Right there in the middle of the policy it reads, for property in a basement, coverage is limited.” [WJLA]
Arlington Man Leads Police on Chase — “At first the Expedition refused to stop for the trooper, but finally pulled off and stopped on the shoulder. A few minutes into the traffic stop, the driver of the Expedition drove off from the trooper and a pursuit was initiated westbound on I-66.” [Press Release]
Board Approved 23rd Street Tunnel Request — “After years of maintaining the little-used 23rd Street pedestrian tunnel that runs under Richmond Highway in Crystal City, Arlington will request its closure from the state.” [Arlington County]
New Renderings of Rosslyn Hotel Development — “The proposed development… would replace the Holiday Inn at 1900 N. Fort Myer Drive with a building which combines residential, hotel and conference center uses along with retail and restaurant space. A 38-story tower fronting N. Fort Myer would contain a four-star hotel with 344 rooms (compared to the previously-proposed 327), and a 25-story residential tower fronting Nash Street would deliver roughly 500 studio-to-three-bedroom units (compared to the previously-proposed 490).” [Urban Turf]
Interim Economic Development Director Named — “Arlington County Manager Mark Schwartz has named Alex Iams interim director of Arlington Economic Development. Iams currently serves as assistant director of the department. He succeeds Victor Hoskins, who has served as director since January 2015.” [Arlington County]
Hoskins: Arlington in Good Shape — “Hoskins said that Arlington County has ‘nothing to worry about’ with Amazon coming in, adding that the move to Fairfax County is coming at the right time — ‘Yes, I’m done in Arlington.'” [Tysons Reporter]
Photo courtesy Craig Fingar
The Fairfax County Economic Development Authority announced today that Hoskins will be its new president and CEO, replacing its now-retired longtime leader, Gerry Gordon. FCEDA is one of the largest economic development agencies in the country, with six global satellite offices.
Hoskin’s departure is seen as a major loss for Arlington, at a crucial time for the county with Amazon moving in and another key economic development official, Christina Winn, recently departing for the top economic job with Prince William County.
“We wish Victor well,” Arlington County Manager Mark Schwartz said in a statement to ARLnow. “He has been a great leader and we know that he will continue to be a force for great regional collaboration.”
Schwartz says the county may announce an interim director for AED later this week.
Great news for @fairfaxcounty & Northern Va today — Victor Hoskins has been appointed prez/CEO of @FairfaxEDA. A key player in Va's successful HQ2 bid, he is smart, savvy, innovative, collaborative, & highly experienced. I can’t imagine a better pick. @VirginiaEDA @NOVAChamber pic.twitter.com/UPFDgZhVLm
— Stephen Moret (@StephenMoret) July 8, 2019
More from an FCEDA press release, after the jump.
A pair of commercial property tax hikes in D.C. may drive additional economic activity in Arlington, according to a new report.
Commercial real estate services firm JLL says higher commercial property taxes in the District — a 2.2% hike from $1.85 to $1.89 per $100 of assessed value — “will cause rent paid by office tenants to jump further, at a time when the market’s supply-demand paradigm strongly favors tenants.”
The report also says an approved 72% increase in the District’s deed transfer and recordation tax will cause commercial property sales activity to “grind to a halt in the mid- to long-term.”
The new taxes will take effect Oct. 1, at the beginning of D.C.’s new fiscal year, as part of a $15.5 billion budget that includes new investments in affordable housing.
Between D.C. making itself more expensive for commercial property owners and lessees, and the arrival of Amazon’s HQ2, JLL says conditions are ripe for increased economic activity in Northern Virginia and Arlington, in particular.
DC’s losses will be Northern Virginia’s gains. These tax hikes come at a time when Northern Virginia is heating up as an investment alternative to DC. Transaction costs were already substantially lower in Arlington County than in Washington, and now will be even more so. It is no stretch to say that this will attract capital away from DC and toward Arlington’s top-tier offerings, of which there will be many when HQ2-related demand spurs the development of new buildings and the lease-up of old ones.
Bisnow, which first reported on the study, quoted JLL Managing Director of Research John Sikaitis as saying the new dynamic could drive increased investment interest and office leasing in Arlington.
With the increased taxes on commercial property sales making deals harder to pencil in D.C., the JLL researchers expect investors will begin to look across the river. Northern Virginia has traditionally not been viewed as the same type of core market as D.C. in the eyes of outside investors, but an improving office market and expected growth from Amazon HQ2 has them taking a closer look.
“No one denies now that Arlington is a core market with a significant amount of future urban demand,” Sikaitis said. “You’re now seeing institutional investors start to look at Arlington from an investment perspective, which didn’t happen 12 or 24 months ago. Their allocation to D.C. could be allocated to Arlington.”
Auditor Looking at Economic Development Funds — “Are economic-incentive funds provided to corporations by the Arlington County government being doled out in accordance with agreements? The county government’s auditor is going to take a look… The audit, already under way, will look only at whether terms of agreements are being complied with; overall effectiveness of the sometimes controversial economic-incentive policy ‘is not part of the scope.'” [InsideNova]
Suspicious Letter at Fort Myer — “Joint Base Myer Henderson-Hall police and other agencies investigated a suspicious letter this afternoon that was delivered on the Fort Myer portion of the joint base. It was determined to not have any dangerous substance on or in it.” [Twitter]
Lauding Arlington’s Retiring Election Chief — “As her tenure as director of elections approaches its end, Linda Lindberg on June 18 was honored by Arlington County Board members for her service. Lindberg — who has served in Arlington’s elections office since 1994 and has been registrar since 2003 — has delivered ‘an outstanding career of public service,’ County Board Chairman Christian Dorsey said during a ceremony marking her tenure.” [InsideNova]
Arts Group Applauds Arts Plan — “Embracing Arlington Arts – an independent citizens group comprised of Arlington arts supporters – applauds the County Board for formally adopting Arlington’s Strategic Plan for the arts – “Enriching Lives” at their Board meeting [on] June 18. This well-researched plan brought together arts professionals, experts, stakeholders and citizens in its development.” [Press Release]
Arlington Developer Plans Senior Projects — “A multifamily developer is making a $200 million senior living play, with five such projects coming together under the company’s new Aspire brand, and potentially more on the way in the Mid-Atlantic. Arlington, Virginia-based Bonaventure has communities under construction or development across the commonwealth, in Alexandria, Woodbridge, Norfolk, Chesapeake and Richmond.” [Senior Housing News]
New Solar Co-op — “Neighbors in Arlington County (including Alexandria… and Fairfax County) have formed a solar co-op to save money and make going solar easier, with the help of nonprofit Solar United Neighbors. Arlington Initiative to Rethink Energy, EcoAction Arlington, and Virginia Clean Cities are sponsoring the co-op.” [Press Release]
Arlington Tech Co. Gets New CEO — Rosslyn-based Snag, “the country’s largest and fastest-growing platform for hourly work, announced today new changes to its executive leadership team. Mathieu Stevenson has been appointed Chief Executive Officer… Stevenson will lead the company forward, with Rosati’s active involvement, to realize Snag’s mission of revolutionizing how hourly workers and employers connect.” [Snag]
Flickr pool photo by Brian Irwin
Arlington Loses Top Economic Development Official — “Christina Winn, one of the lead Arlington officials tasked with luring Amazon to the county, is taking over as Prince William County’s top economic development official.” [Washington Business Journal]
Marymount Prez Wants to Double Enrollment — “Irma Becerra hit the ground running the moment she took over the Marymount University presidency… her chief goal is as straightforward as it is ambitious: Double the school’s size in the next five years.” [Washington Business Journal]
18th Street Headache — “As they wrap up the demolition of the Clark St. bridge over 18th [Street S. in Crystal City], the eastbound side of 18th will be closed Thursday and Friday this week.” [Twitter]
Howell Gets Fall Challenger — “It’s an uphill battle, to be certain, but Fairfax County Taxpayers Alliance president Arthur Purves will take on, as a Republican, seven-term incumbent state Sen. Janet Howell (D-32nd) in the Nov. 5 election. The district snakes from Howell’s home turf of Reston eastward into portions of Arlington.” [InsideNova]
Arlington Treasurer Leads State Association — “Arlington County Treasurer Carla de la Pava was sworn in as the President of the Treasurers’ Association of Virginia (TAV) at the association’s annual conference in Arlington.” [Press Release]
Boeing’s Space HQ Moving Out of Arlington — “Boeing will move its space headquarters from Arlington, Va., to the Florida Space Coast as it pursues a number of rocket and spacecraft programs, including one that would launch astronauts from U.S. soil for the first time since the space shuttle retired in 2011.” [Washington Post]
Townhomes Proposed for Crystal House Property — “The proposed expansion of the Crystal House apartment complex is getting a little larger, with 21 townhomes now part of plans at the Crystal City property… The company has already filed for permission to add 798 units across four new buildings on the 29.8-acre site.” [Washington Business Journal]
Nearby: Design of Potomac Yard Metro Revealed — “The city of Alexandria, Washington Metropolitan Area Transit Authority and Potomac Yard Constructors, the private joint venture picked to build the station, have submitted a design for an upcoming evaluation by the city’s Board of Architectural Review. The station design calls for a stone base, a metal canopy and metal louvers, a glass curtain wall and exo-skeleton system, a standing seam metal roof and roof skylight panels. There will be bathrooms on the eastern side, between a set of elevators and an electrical room.” [Washington Business Journal]
Photo courtesy Celia Slater
DEA Staying in Pentagon City — “The Arlington County Board today approved an incentive grant that will keep the headquarters of the Drug Enforcement Administration, part of the U.S. Department of Justice, in Pentagon City following a lengthy federal competitive bid process. The agency occupies more than 511,000 square feet of space, and employs about 3,000 people at its Pentagon City location.” [Arlington County]
‘Take Your Child to Work Day’ for Cristol — Arlington County Board member Katie Cristol’s new baby boy made his public debut at Thursday’s meeting for Take Our Daughters and Sons to Work Day. [Twitter]
Activists Still Pressing for Tree Removal Explanation — “Remember back last year, when top Arlington officials said they would provide the public – in writing – with the reasons the government would not take further steps to protect removal of a tree that had become symbolic to environmental activists across the county? You may have forgotten, but those activists have not.” [InsideNova]
‘Notable’ Trees Recognized — “Arlington has more than 750,000 trees of at least 122 species that provide $6.89 million in environmental benefits to the County annually in the form of pollution removal, carbon storage, energy savings, and avoided stormwater runoff. The Arlington County Board will designate 24 of these trees as Notable Trees at its April 25 Recessed Meeting. [Arlington County]
Water Main Break in Fairlington — Some 100 Arlington households were without water service for part of Thursday due to emergency water main repairs in the Fairlington neighborhood. [Twitter]
Gerber Incentives Pass — Gerber’s move to Arlington is one step closer thanks to an incentive package unanimously approved by the County Board on Tuesday. The package is divided between money from the state’s Commonwealth Opportunity Fund (COF) — $862,500 — and money earmarked for nearby infrastructure upgrades — another $862,500.
Nearby: Alexandria Peeved By Metro Surprise — “A month after Metro learned additional closures would be needed at the end of this summer’s Blue and Yellow line shutdown, Alexandria’s City Council lit into the agency’s top leaders Tuesday night about why the Virginia city and the public only learned of the extended work through a news release last week.” [WTOP]
Flickr pool photo by Kevin Wolf
The Arlington County Board is poised to approve $1.7 million in state and local funds to incentivize Gerber to move its headquarters to the county.
The Board is scheduled to vote tonight (Tuesday) on whether or not to give $862,500 in state funds to baby food maker Gerber Products Company. Another $862,500 will be allocated for infrastructure improvements around the Rosslyn area, where the company’s headquarters will be moving.
The money is part of a bid enticing Gerber to make good on its promise to relocate its headquarters and 150 jobs to Rosslyn. Gerber parent company Nestle has already moved in to its new Rosslyn headquarters.
A staff report to the Board says $862,500 will come from the state’s Commonwealth Opportunity Fund (COF). It will be sent to Gerber via Arlington’s Industrial Development Authority “upon Gerber’s submission of a Certificate of Occupancy and with evidence that Gerber’s Chief Executive Officer has moved his or her office and operations to the facility.”
The incentives are intended to help Gerber build out its headquarters. More from the staff report:
The agreements require signatures by the County Manager on behalf of the Arlington County Board, by the Chair of the IDA, by the President and CEO of VEDP and by a representative of Gerber. The agreements contain the following requirements, among others:
- Gerber must make, or have made on its behalf, a capital investment of $5 million in the building at 1812 North Moore Street;
- Gerber must create and maintain 150 New Jobs in the Commonwealth of Virginia at an average annual compensation of $127,719; and
- Gerber must make its best efforts to ensure that at least 30% of the New Jobs are offered to residents of Virginia.
If the Board approves the plan, it will allocate $862,500 in funding to a handful of infrastructure projects already in motion:
- Move three bus stops blocking the front of Gerber and Nestle’s headquarters at 1812 N. Moore Street (a project staff said is already complete).
- Finish the on-street bike lanes and wide sidewalks planned for the Lynn Street Esplanade.
- Wrap up the project to widen Custis Trail and fix bike lanes, add ADA-compliant curb ramps and crosswalks with more visibility, among other changes.
- Complete the long-awaited, million-dollar Corridor of Light art installation near the Key Bridge
The funding vote is currently listed on the Board’s consent agenda, which is typically reserved for topics members intend to pass without debate.
Gerber was acquired by Nestlé in 2007 and has pledged to invest $5 million in relocating to Arlington. Nestlé has set up shop in its 250,000 square-foot office space in Rosslyn and promised to bring 750 jobs to the county.
Image courtesy of Arlington county
Protest in Front of Nestle Office in Rosslyn — “On Tuesday, Greenpeace activists hauled a 15-foot-tall heap of garbage, artfully crafted to resemble one of those deep sea fish that’s about 90 percent jowl, out in front of the Nestlé’s U.S. headquarters in Arlington, Virginia.” [Gizmodo, Twitter]
‘No Stopping’ Arlington’s Growth — “Historically a commuter bedroom city for Washington, D.C., Arlington, VA continues its development renaissance with a variety of mixed-use projects that will shuttle in new residents, create open spaces and make new room for more restaurants and companies.” [GlobeSt]
Arlington Ponies Up Incentives for DEA — “The Arlington County Board is set to vote later this month to grant up to $11.5 million in financial incentives to the Drug Enforcement Administration’s Pentagon City landlord to keep the agency from relocating to neighboring Alexandria, just shy of half of what it has promised Amazon.com Inc. for its second headquarters.” [Washington Business Journal]
Possible Meteor Lights Up the Sky — There were numerous reports of a meteor seen over Arlington, the D.C. region and much of the East Coast around 11 p.m. last night. [Twitter, BNO News, NBC Washington]
County Touts Green Initiatives Ahead of Earth Day — “Few communities can boast Arlington’s ceaseless commitment to sustainability — which is why one day in April can barely hint at the work that happens in the months before and after.” [Arlington County]
Flickr pool photo by Tom Mockler