Arlington, VA

As some indicators point toward another recession around the corner, local economists say Arlington would likely escape the brunt of a downturn.

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

Iams noted that the county has since 2008 added even more corporate jobs as companies like Lidl, Nestle, and Amazon moved into town.

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.”

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Amid trade-related tweets from President Donald Trump that roiled the stock market, Virginia’s U.S. senators are speaking out against escalations in the trade war with China.

Sens. Mark Warner and Tim Kaine, both Democrats, said in a joint statement that the Virginia and the U.S. economies are at risk as Trump raises tariffs and tweets invective.

The senators’ offices released the following press release Friday afternoon.

U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) released the following statement after China announced that it will instate additional retaliatory tariffs starting September 1 in response to President Trump’s plans to impose additional levies on Chinese goods:

“Time and time again, we have warned President Trump against escalating a trade war with China. Trade wars yield no winners and hurt consumers and producers all over the Commonwealth, especially the farmers and small business owners who count on Chinese demand for products grown in Virginia. We’re even seeing devastating second-order effects of this trade war, with the possibility that fires in the Amazon are being deliberately set to clear land for soybean exports to China. While the U.S. must absolutely crack down on China for its illegal trade practices, we can’t afford to do so in an incoherent and erratic way. Today’s announcement shows once again that the Trump Administration’s bizarre trade policies destabilize the economy, put the livelihoods of many Americans at risk, undermine global stability, and fundamentally fail to hold China accountable for its unfair practices.” 

According to an announcement by the Chinese finance ministry, China’s tariffs will range from five to ten percent on items such as agricultural products, apparel, chemicals, and textiles, in addition to a 25 percent tariff on automobiles and a five percent tariff on automobile parts. These levies are scheduled to take effect on September 1 and December 15, matching the dates of the President’s most recent tariffs.

Sens. Warner and Kaine have continuously warned the Trump Administration about how its haphazard approach on trade hurts Virginia’s families, businesses, and economy. According to the Virginia Department of Agriculture and Consumer Services (VDACS), China is the Commonwealth’s number-one agricultural export market for soybeans. In 2018, Virginia exported more than $58 million soybean products to China – an 83 percent decrease from 2017.

Update at 5:15 p.m. — New tweets from the president further escalate the trade war with higher tariffs.

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Morning Notes

Talento Selected as School Board Chair — “The Arlington School Board held its annual organizational meeting for the 2019-20 school year and elected Tannia Talento as Chair and Monique O’Grady as Vice Chair. The terms for the new Chair and Vice Chair begin immediately and will continue until June 30, 2020.” [Arlington Public Schools]

Which Amazon Units Are Coming to HQ2 — “We’re still a pretty long way from knowing what the estimated 25,000 workers at Amazon.com Inc.’s second headquarters will do, but a top company executive has named three units that will be represented in Arlington: Alexa, Amazon Web Services and Amazon’s consumer division.” [Washington Business Journal]

Private Sector Job Growth in Arlington — Arlington County’s private employment grew by nearly 20,000 jobs, or about 17%, between 2010 and 2018, according to the D.C. Policy Center. [Twitter]

Arlington Winners at the RAMMYs — Ambar in Clarendon captured the Service Program of the Year award at the 2019 RAMMYs over the weekend. The distinction of Chef of the Year at the D.C. area restaurant industry award show, meanwhile, went to Kyle Bailey of The Salt Line, which is opening a location in Ballston. [Washington Business Journal]

APS Testing New Visitor System — “Summertime will bring a security pilot program to a number of Arlington’s public schools, with a full roll-out of the initiative slated throughout the system in the fall. The new visitor-management system to be tested at five sites during the summer will require visitors, volunteers and contractors to provide specific photo identification, and their identities will then be checked against state and federal sex-offender registries.” [InsideNova]

ACFD Holds ‘Camp Heat’ — “Camp Heat, put on by the Arlington County Fire Department, concluded Friday night. During this week-long immersion into firefighting, campers learned everything from running hoses to breaking down doors to working on water rescue techniques. All the campers are young women, 15 to 18 years old.” [WJLA]

Flickr pool photo by Erinn Shirley

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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A New York-based tech company just announced a major new expansion in Rosslyn, with plans to bring 500 jobs to the county over the next five years.

Yext rolled out plans yesterday (Thursday) to lease a 42,500-square-foot office space at 1101 Wilson Boulevard. The company will occupy the top three floors of the building, and will help slash the office vacancy rate in Rosslyn, a persistent problem over the last few years.

Yext produces data management software for companies looking to manage their online presence, helping brands as large as T-Mobile and Ben and Jerry’s track and upload location information to directories across the web.

Company founder and CEO Howard Lerman, a Virginia native himself, says the move will help fuel his firm’s ongoing expansion efforts in the D.C. metro area, which he hailed in a statement as a budding tech hub now that Amazon is coming to the county.

“Washington, D.C. and Northern Virginia are emerging as one of the country’s major hubs for tech talent, which was a key factor in our decision to expand in the area,” Lerman wrote. “Our new office will be a key foothold as we continue our global growth.”

Yext plans to offer an open floor plan, fully stocked kitchens and free meals to all employees at the space. The company also hopes to put up a sign displaying its name on the building, once the home of the county’s Artisphere, to adorn Rosslyn’s skyline.

Rosslyn has seen quite a few economic development victories in recent months, highlighted by Nestle bringing its American headquarters to the neighborhood last year. The tech consulting firm Accenture recently added an office in the area as well, and the We Companies recently opened a new coworking space in the neighborhood.

Rendering courtesy of Yext

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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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Morning Notes

Spike Mendelsohn Planning New Restaurants in Crystal City — “Already in National Landing with Good Stuff Eatery and We, The Pizza, Mendelsohn has a letter of interest out for two new spaces. One will bring his Mexican taco shop already on Capitol Hill, Santa Rosa, to Virginia. Another is a new concept: fried chicken.” [Northern Virginia Magazine]

Shutdown May Fry Local Economy — “Come February — perhaps by the beginning of the month, probably the middle and definitely by the end — the financial, occupational and psychological impact of this now-record government shutdown will go from the theoretical to the very, very real.” [Washington Business Journal]

Trump Signs Shutdown Backpay Bill — President Trump has signed a bill championed by Rep. Don Beyer (D-Va.) that will provide backpay to federal employees affected by the government shutdown. Now Virginia Sens. Tim Kaine and Mark Warner are working to provide a similar guarantee for low-wage federal contractors. [Federal News Network]

JBG’s ‘Brutally Honest’ Amazon Pitch — A quote attributed to JBG Smith Chief Development Officer Kai Reynolds, talking about his pitch to Amazon’s HQ2 team: “So we literally sat down at 8 in the morning, and I started the presentation by saying ‘I’ve lived [in this region] a number of years, I had never been [to Crystal City]. While it’s better than I thought, it’s kind of a shithole.'” [Bisnow]

Snow May Disrupt Evening Commute — “The main band of snow is likely to come through during the evening and overnight hours. As the onset of snow may coincide with the evening commute, especially in our western areas, build in extra time to get home or consider leaving a little early to beat the rush. Some slick spots could develop, especially on untreated roads.” [Capital Weather Gang, Twitter]

Nearby: Attempted Kidnapping in Georgetown — “As she neared her front door about 5 p.m. Tuesday, a woman grabbed the child from behind and tried to abduct her, D.C. police said. The girl fought back and broke free. The nanny in the car screamed, and the woman ran.” [Washington Post]

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Amazon’s arrival in Arlington has been hailed as a massive boon for the county and the Commonwealth of Virginia.

But are the incentives offered to the company worth the economic development benefits it promises to bring? We discussed Amazon and the HQ2 process with Michael Farren, a researcher at GMU’s Mercatus Center who studies the effects of government favoritism toward particular businesses.

Listen below or subscribe to the podcast on iTunesGoogle PlayStitcher or TuneIn.

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Local skeptics of Arlington’s efforts to lure Amazon’s second headquarters to the county are convening a community forum tomorrow (Thursday) for people to air their own concerns about the project.

Our Revolution Arlington, the local chapter of a national group created out of U.S. Sen. Bernie Sanders’ presidential bid, is planning a “community town hall” on the issue from 7-9 p.m. at Arlington Central Library. Other activist groups, including the Arlington Green Party and the county’s chapter of the Democratic Socialists of America, are co-hosting the event.

The county’s bid to lure the tech giant to Arlington has attracted concerns ranging from the impact the company might have on rent prices to the wisdom of the county and state offering tax breaks for the massive company. With observers of all stripes hypothesizing that Arlington has an excellent chance of winning HQ2, organizers say they wanted to create a space to get these issues out in the open.

“This whole process has been so secretive and Northern Virginia happens to be one of the most secretive places in the running,” Roshan Abraham, a member of Our Revolution Arlington’s steering committee, told ARLnow. “This is about raising awareness, because I think most people don’t really know what’s at stake, they don’t know what is being offered by the various finalists or what Amazon’s clear record of behavior of is.”

Abraham said the event will primarily be a chance for the County Board to “listen to what we have to say,” rather than the other way around. Abraham even swung by the Board’s meeting Saturday (June 16) to invite members to the gathering — he says both Erik Gutshall and John Vihstadt subsequently told him they’d try to attend, while the others either didn’t respond or had conflicts.

In response to Abraham’s request, County Board Chair Katie Cristol noted Saturday that the Board does not “have any new information to report” on the company’s decision-making. Vice Chair Christian Dorsey also pushed back against any insinuation that the county is somehow holding back a chance for the public to make their voices heard on the issue.

“We don’t know anything about it, there’s been no discussions with this board, there’s been no chance for public engagement that we’ve denied,” Dorsey said.

Those responses struck Abraham as the Board just “spewing off talking points,” underscoring his desire to shine a light on what the public thinks about Amazon.

“Getting that response made it all the more clear to me that the County Board needs to be listening to us,” Abraham said.

The Arlington GOP has also raised persistent concerns about the transparency of the county’s efforts to woo Amazon, bringing them into rare alignment with groups like Our Revolution. Some local Republicans also attended Saturday’s meeting to raise the issue once more.

 

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Morning Notes

Remembering Barbara Bush — Via the Arlington GOP Twitter account: “Former First Lady Barbara Bush died today at age 92. She will always be remembered for representing the best of America. We pray for and send condolences to her family.” [Twitter, CBS News]

New Sign for Apple Store — A new sign is going up outside of the Apple Store in Clarendon. The store was renovated in 2016. [Twitter, Arlington County]

Arlington Man Facing Firearms Charges in Pa. — From a TV station near Pittsburgh: “A Virginia man is facing charges after police said he possessed 14 guns despite having a protection from abuse order against him. Perry Georgeadis, 63, of… Arlington, Virginia, is charged with 14 counts of person not to possess a firearm.” [WJAC]

Arlington’s Gain is New Jersey’s Pain — The announcement that Gerber is moving its corporate headquarters to Rosslyn, to the same building as corporate parent Nestle USA, is bad economic news for New Jersey. “This means close to 180 New Jerseyans will be out of a job. But the company promised to help employees affected, mostly in corporate positions such as marketing, finance and HR, by offering them the chance to relocate, and severance and outpatient support for those that can’t make the move.” [NJ.com]

Arlington Students Make TJ Science Cut — “Students from Arlington’s public-school system will represent about 5 percent of the incoming freshman class at Thomas Jefferson High School for Science & Technology. A total of 25 APS students have been offered admission to the regional magnet school.” [InsideNova]

Nearby: Alexandria Debates High School Lights — In a situation that may sound familiar to those in Arlington, the question of whether or not to add lights to the soon-to-be-renovated T.C. Williams High School stadium is pitting neighbors of the school against high school athletic boosters and school administrators. [Alexandria Times]

Flickr pool photo by Erinn Shirley

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Arlington County ranked number one among similar-sized counties in this year’s Fourth Economy Index, which recognized it for attracting talented people, supporting business growth and creating vibrancy.

The index, which was established in 2012, assesses counties in five areas: investment, talent, sustainability, place and diversity. Arlington won for counties with 150,000-499,999 people, ahead of Chesapeake in Virginia (near Norfolk) and Shawnee County in Kansas (which includes the city of Topeka).

“A vibrant business community, lots of arts and entertainment and low unemployment all contribute to a higher quality of life for this No. 1 community,” the citation reads.

Arlington came in first because of its high scores in place, talent and diversity. The index said Arlington’s location across the river from D.C. makes it a perfect location for people who work there, while its seamless blend of urban areas and quiet, garden-lined streets, provide a fine balance between city life and “neighborhood charm.”

In addition, the index said Arlington’s talent base is high thanks to its many highly-educated residents while its diversity spreads across race, age and ethnicity. It also found that middle-income Arlingtonians spend less on transportation and housing than their national counterparts in most other counties.

“While job growth and investment are good indicators of a community’s progress, they are not enough,” the website reads. “Our continued experience has shown that our analysis must also look at factors that create a foundation for sustained success and resilience.”

The full top 10 for large-sized counties is as follows:

  1. Arlington County, Virginia
  2. Chesapeake, Virginia
  3. Shawnee County, Kansas
  4. Chittenden County, Vermont
  5. Pulaski County, Arkansas
  6. Albany County, New York
  7. Hampden County, Massachusetts
  8. Minnehaha County, South Dakota
  9. Peoria County, Illinois
  10. Champaign County, Illinois

To analyze counties, the index used data from the U.S. Census, Bureau of Labor Statistics, the Centers for Disease Control and Prevention and the U.S. Department of Housing and Urban Development among other sources. A total of 19 data areas are weighted and analyzed for the level of influence they have on a county.

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