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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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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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PBS Agrees to Keep Headquarters in Crystal City, Plans to Relocate to New Building

(Updated at 10:45 a.m.) PBS has signed a new deal to keep its headquarters in Arlington, though it will be relocating to a different building in Crystal City.

The media company announced today (Tuesday) that it will be moving from its current space at 2100 Crystal Drive to a 120,000-square-foot office at 1225 S. Clark Street. PBS agreed to a 15-year lease in the building, and plans to make the move sometime in “mid-2020,” per a press release.

The nonprofit has been based out of the 2100 Crystal Drive property since 2006. Its new headquarters is adjacent to both the Earth Treks climbing gym and the headquarters of the U.S. Marshals Service.

“We are thrilled that PBS will remain in Crystal City, especially during such a transformative and exciting time for this community,” PBS President and CEO Paula Kerger said in a statement, no doubt referring to Amazon’s impending arrival just a few blocks away. “Keeping our headquarters in Arlington is great for PBS and our employees, and we’re proud to call ‘National Landing’ our home.”

The move takes PBS from one property controlled by developer JBG Smith to another. The company is the dominant property owner throughout Crystal City, Pentagon City and the nearby Potomac Yard, controlling millions of square feet of space even after helping bring Amazon to some of its properties.

“This continued long-term commitment by PBS to stay within the submarket further validates our excellent location, as well as our many planned improvements for the neighborhood,” David Ritchey, JBG Smith executive vice president said in a statement. “The relocation and extension of the PBS lease is also indicative of our plan to retain and attract diverse industries to National Landing, including associations and non-profits.”

The March of Dimes nonprofit also recently announced plans to relocate to the area, moving to a building at 1550 Crystal Drive.

Attracting businesses to the area remains a major concern for the county, even with Amazon set to take up as much as 8 million square feet of office space in the area someday. The county is hoping many property owners, like JBG, will use the company’s arrival as the impetus to refresh some of their older buildings in the area, and further reverse Arlington’s spiking office vacancy rate.

PBS member station WETA is also one of the county’s more well-known office tenants in South Arlington, though one of the TV station’s facilities could also be on the move. County officials hope to someday acquire the station’s studio property in Nauck, in which programs like the PBS NewsHour is produced, then use the land for the redevelopment of Jennie Dean Park.

Photo 1 via Google Maps

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With Amazon On Board, JBG Smith Prepares to Bet Big on ‘National Landing’

JBG Smith is gearing up to invest hundreds of millions of dollars in Crystal City, Pentagon City and Potomac Yard, arguing that Amazon’s impending arrival could make the “National Landing” area nearly as in-demand as D.C. itself.

In documents delivered to investors last week, the developer revealed its most detailed plans yet for how it expects to work with the tech giant as it moves its 25,000 workers to the county.

Perhaps most notably, JBG revealed for the first time that Amazon will fork over $294 million to buy the company’s “PenPlace” and Metropolitan Park properties in Pentagon City, where it will eventually build new offices. As work on those buildings continue, the company will sign “short-to-medium term” leases at JBG’s buildings at 241 18th Street S. and 1800 S. Bell Street in Crystal City, where JBG is also planning to spend another $15 million to spruce up the properties.

JBG also told its shareholders that Amazon will lease the entirety of a new building planned for 1770 Crystal Drive, which sits at the heart of the developer’s just-approved “Central District” redevelopment project for the entire block. The company expects to spend $80 million redeveloping the building, with the eventual goal of opening it in time for 2020 and making it a more permanent home for Amazon employees.

But those changes represent only the work the developer is planning that’s tied directly to Amazon. By its own estimate, JBG already owns about 71 percent of office buildings in the neighborhood, and it hopes “redeploy the proceeds” of its Amazon windfall “into either new development or income-producing multifamily assets.”

Per the documents, potential projects could include the redevelopment of 1800 S. Bell Street property once Amazon leaves, or the overhaul of some of its other existing Crystal City and Pentagon City properties; 2001 Jefferson Davis Highway, 223 23rd Street S., 101 12th Street S., and the RiverHouse Apartments (1400 S. Joyce Street) are all listed as possibilities.

Essentially, the company is betting that Amazon’s arrival will be a “powerful economic catalyst” and “kick-start the development of a technology ecosystem that has long searched for its footing in the D.C.,” CEO Matt Kelly wrote to shareholders.

“As vacancy in National Landing burns off and technology job growth gains momentum, we expect National Landing to [surpass] Rosslyn as the most valuable Northern Virginia submarket, and approach convergence with Washington, D.C.,” Kelly wrote in a letter to investors.

Those forecasts represent quite the radical change from Crystal City’s previous woes attracting any companies to the area. The departure of federal and military tenants left the neighborhood with a persistently high vacancy rate, shrinking a key tax revenue stream for the county, but officials have long touted Amazon’s impending arrival as a way to solve that problem virtually overnight.

JBG is so bullish on the impending demand in the area that it could very well convert one of its planned apartment redevelopments into more office space instead.

The developer recently began demolition work on a building at 1900 Crystal Drive, space it eventually hoped to transform into two apartment towers with a total of 750 homes between them. JBG plans to start construction by “early 2020,” but notes for investors that “this project could switch to office in the event of a substantial or full building pre-lease.”

The company plans to eventually spend $550 million on that construction and work its other Amazon-related properties, though it expects it will have little trouble affording such expense. Kelly noted in his letter that JBG saw increased demand in the area even before Amazon made its Arlington move official, and has been able to raise rents and property asking prices accordingly.

“We have also seen a dramatic increase in demand from retailers looking to locate in our initial phases of placemaking development,” Kelly wrote. “Since the announcement, we have had a further wave of increased inquiries. We believe that this increase in demand for our holdings in National Landing will continue, and likely amplify, as Amazon grows in the submarket.”

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Morning Notes

Rolling Thunder to Coming to a Stop — The 2019 Rolling Thunder rally will be the group’s last Memorial Day rally in the D.C. area, organizers say. The rally has brought thousands of bikers, along with road closures and motorcycle noise, to Arlington over the past three decades. [Washington Post]

The Gritty Pre-History of Crystal City — “Before development flourished (the entrepreneurs offered bargain rates to federal agencies), the area ‘was a conglomeration of places that sold junk, used tires, a drive-in movie theater, a run-down ice skating rink, second-hand materials — it was very unattractive…’ The industrial area leading to the Potomac Yard railway tracks for decades was bordered by sketchy bar-rooms of the 19th-century Jackson City and National Airport’s precursor, Hoover Field.” [Falls Church News-Press]

Seasonal Pop-Ups at Pentagon City Mall — A trio of “seasonal pop-up shops” are opening at the Fashion Centre at Pentagon City: Chukulata, a sweet shop selling crepes and other treats; PolarX Ornaments, selling holiday decor and personalized ornaments; and Trunk and Drawer, which “specializes in men’s fashionable undergarments as well as sleepwear, activewear and swimwear,” per a press release.

Stepped Up DUI Enforcement Underway — “To help spread the message about the dangers of drunk driving, the Arlington County Police Department is partnering with the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) to get drunk drivers off the roads and help save lives during the national high-visibility enforcement campaign, Drive Sober or Get Pulled Over, which runs from December 13-31, 2018.” [Arlington County]

JBG Buying More Sites in ‘National Landing’ — “JBG Smith Properties has reached a deal to buy a development site across from Virginia Tech’s planned innovation campus in Alexandria, part of a larger strategy to acquire land in and around the National Landing area that includes Amazon.com Inc.’s new headquarters.” [Washington Business Journal]

Nearby: Old Town Getting Left Behind? — “The old guard of Alexandria, mainly in Old Town, has for decades wielded a sort of NIMBY clout and deployed ample financial resources to fight projects. The plans to activate Alexandria’s 8.6-acre waterfront were delayed for years due to community pushback and legal challenges… But fears that Alexandria will be left behind as competition intensifies with flashier destinations such as National Harbor and The Wharf are spurring change.” [Washington Business Journal]

Flickr pool photo by Michael Coffman

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Pentagon Row Parking Rates Creep Upward, A Development Neighbors Attribute to Amazon

A Pentagon City parking lot is jacking up some of its monthly rates, and some residents fear that Amazon’s impending arrival in the neighborhood is to blame.

Residents of the RiverHouse Apartments (1400 S. Joyce Street) were recently informed by their landlord that their monthly parking rates were about to jump substantially if they park their cars in the nearby Pentagon Row garage and surface lot. Starting Jan. 1, anyone from the apartment complex parking there will pay $100 month per space, up from $65.

The parking managed by Colonial Parking, not JBG Smith (RiverHouse’s owner, the area’s dominant real estate developer and a key player in bringing Amazon to the area). Accordingly, RiverHouse management lamented in a letter to residents, provided to ARLnow, that it isn’t able to control such a change.

“Please rest assured that this increase was just as much a surprise to us as this is to you,” General Manager Joe Mettee wrote.

Colonial Parking did not respond to a request for comment on what prompted the sudden increase. But Megan Niewold, a RiverHouse resident set to see her parking rates skyrocket, told ARLnow that she has her suspicions about their motivations.

“When I spoke to my garage attendant, he said they were notified because they want to prepare ‘National Landing’ for an influx of parking needs in the future,” Niewold wrote in an email. “It sure seems like they’re raising prices for Amazon’s arrival super early, which sucks because it’s making this place unaffordable for nonprofit workers/teachers/etc.”

Concerns over how the tech giant’s new headquarters, and its promised 25,000 workers, will transform the area are certainly nothing new.

The company’s selection of Arlington for half a new headquarters has already spurred development activity in both Pentagon City and Crystal City, and other such changes are surely on the way in the coming months. Though county officials are hoping a slew of new transportation options will encourage Amazon employees to opt for public transit instead, neighbors fear that the area is already facing a parking crunch, which will only be exacerbated by similar price increases.

“The belief is that because so many people take public transportation that it won’t be a problem; but for people who already live here, there’s already a problem,” Crystal City Civic Association President Carol Fuller said during a town hall focused on Amazon this week.”Most of the spaces we have are only available at cost, and some street parking will disappear due to the Metroway expansion.”

The good news for people like Niewold, at least, is there are some other options. RiverHouse added in its letter that it’s knocking down some of its own parking prices for anyone frustrated with the Pentagon Row increases.

Photo via Google Maps

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Demolition Work Starts on Crystal City Office Building Set for Amazon-Related Redevelopment

(Updated Wednesday at 10:20 a.m.) Demolition work is kicking off ahead of the development of a new apartment complex in Crystal City, set to be located immediately adjacent to some of Amazon’s new office space in the area.

JBG Smith, the area’s dominant property owner, started work yesterday (Monday) to tear down an office building at 1900 Crystal Drive. Eventually, the company hopes to add two buildings to the site, with room for 750 apartments and some ground-floor retail.

JBG is aiming to kick off construction on the project next year, and it specifically identified the effort as one it hopes to accelerate now that Amazon is officially Arlington-bound. Crystal City currently has a slightly higher than average residential vacancy rate, and hasn’t seen much in the way of new apartment development recently, but local property owners are racing to offer new options to the thousands of Amazon workers set to descend on the neighborhood in the coming years.

The developer has yet to secure county approval for the 1900 Crystal Drive project, however. 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.

But JBG can pursue demolition of the building as “by right” work in the meantime, meaning it doesn’t require any approval from the county until new construction starts.

The Crystal City Business Improvement District is warning that the demolition will prompt a few sidewalk closures, near Crystal Drive’s intersection with both 18th Street S. and 20th Street S. JBG will also build a covered walkway over the sidewalk along Crystal Drive to allow pedestrian access as the work continues.

The BID says the garage entrances on both 18th Street S. and 20th Street S. will remain open during the construction. Additionally, JBG plans to keep offering the collection of basketball hoops and other games it maintains in one of the building’s parking lots, but will move those over to the plaza behind the 1900 Crystal Drive building, along S. Bell Street.

The building’s demolition will also mark the disappearance of one of the most colorful structures in Crystal City. JBG affixed brightly colored artwork to several buildings in the neighborhood as it mulled how to revitalize the area, and do away with its more outdated facades.

Photo 1 via Google Maps

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Officials Expect Plenty of Amazon Votes in Coming Years, Giving County Some Say in Shaping New HQ

Though Amazon skeptics fret that Arlington officials will offer them only limited opportunities to have their say on the new headquarters, county leaders stress that the complexity of the tech giant’s plans for the area means there will be plenty of chances for the public to weigh in.

Critics of the county and state’s proposal to Amazon have centered on the secrecy of the “HQ2” negotiations in the days following the company’s big announcement, arguing that it may well be an uphill battle for lawmakers to change the structure of the deal after Gov. Ralph Northam’s staff already hammered out most of the details with Amazon. Though both the General Assembly and the Arlington County Board will hold votes on the proposed headquarters agreement, opponents of Amazon’s arrival argue those will mainly be for show, and won’t include a robust community debate about the company’s impact on the region.

In Arlington, at least, officials say that such fears are unfounded. While Board members have pledged to hold a series of virtual town halls addressing all manner of Amazon issues in the months leading up to their planned February vote on the deal, they add that there will be a bevy of future hearings and discussions to guide the development of the headquarters in the (admittedly likely) event it wins the Board’s approval.

Officials note that, at first, Amazon workers will simply move into existing office space around Crystal City — JBG Smith, the area’s dominant property owner, plans to lease the company 500,000 square feet of space in three buildings, to start.

But the tech company also bought several Pentagon City properties from JBG that it plans to develop itself: the site of the planned “PenPlace” development near the intersection of S. Fern Street and Army Navy Drive and the planned “Metropolitan Park” development at 1400 S. Eads Street.

Amazon’s decision to buy the Met Park properties, in particular, raised eyebrows, as they’re zoned to become home to an apartment complex rather than office space.

County Board member Erik Gutshall replied to that tweet, noting that Amazon will ask for a change to allow the office construction, promising a “FULL public process” as part of that discussion to let the community guide the development. Gutshall subsequently told ARLnow that he expects that the company will need to secure a site plan amendment for the change, a step that requires the County Board’s approval, with deliberations to come should the February vote go Amazon’s way.

In an interview on the Kojo Nnamdi Show on WAMU 88.5 Friday, Board Chair Katie Cristol pointed out that there will likely be similar discussions around PenPlace “as that ramp up continues” by the company in the coming years. While Amazon opponents might not be able to block the company’s arrival as part of such land use discussions, Cristol pointed out that it will be a chance for the county to extract concessions from the tech firm, like new green space for the area or contributions to the county’s affordable housing loan fund.

“What’s exciting to me is not only the potential to see these buildings go up, but to realize some of these community benefits that have been envisioned,” Cristol said.

At Saturday’s Board meeting, Vice Chair Christian Dorsey added that “with each individual land use decision, we’ll have more data to figure out what the impacts are” of Amazon’s projects on the community, therefore further guiding how the county presses for mitigating resources from the company.

Of course, anti-Amazon activists are skeptical of how the county might manage that process. Tim Dempsey, a member of the steering committee for the progressive group Our Revolution Arlington, urged the Board Saturday to “turn these deals into a community wealth-building opportunity that would ensure more inclusive and regenerative economic development.”

“The county can wield the land-use approval process to support a coalition of citizens in reaching a private community benefits agreement with corporations and developers,” Dempsey said. “This a chance to give the community a voice. Please be a partner to us: your friends, neighbors and constituents.”

Board members repeatedly stressed that they do their best on that front, but also noted that state officials have taken much of the process out of their hands. Cristol said she only found out that Amazon would be coming to Arlington about eight hours before the news went public, and the bulk of the negotiations over the preliminary deal were handled by Northam’s staff (though state lawmakers were read into some of the details).

“There really wasn’t a whole lot coming to the Board on this,” Gutshall said Saturday. “It really was driven by the state.”

County attorney Steve MacIsaac pointed out that the state has handled so much of the process, in fact, that the county doesn’t even have all of the documents connected to the Amazon proposal. It all adds up to Board members promising transparency in their own Amazon decision-making, but urging skeptics to pay attention to state-level machinations in Richmond just as closely.

“If you have an issue with it, there is a venue to take that up,” Dorsey said Saturday. “It’s not in this room.”

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Following Amazon’s Big Announcement, JBG Smith Sketches Out Plans for New ‘National Landing’

(Updated at 1 p.m.) Amazon’s arrival in Crystal City and Pentagon City seems set to completely transform developments already planned for the area.

The company’s big announcement today (Tuesday) that it would split its planned second headquarters between Arlington and New York City represents a major windfall for JBG Smith, the largest property owner across the newly dubbed “National Landing” — an area including Crystal City, Pentagon City and Potomac Yard. The developer had long sought to fill thousands of square feet of vacant office space in the neighborhoods, much of which will now presumably be occupied by Amazon’s 25,000 workers attached to the project.

But renderings posted online suggest that JBG will also tweak developments already in progress to suit the tech giant’s needs. The new “NationalLanding.com” offers a virtual tour of the area, and promises that the developer “intends to accelerate the planning, entitlement, and development of several projects” to meet Amazon’s arrival in the area — the company expects to occupy anywhere from 4 million to 8 million square feet in office space over the life of the new headquarters.

JBG Smith writes on the site that it currently controls 6.2 million square feet of existing office space in the area, with another 7.4 million of “additional development opportunities in National Landing, excluding Amazon’s proposed land purchase.” In all, the company is planning the following moves in the area, from a press release:

  • Lease approximately 500,000 square feet of existing office space at 241 18th Street S., 1800 S. Bell Street, and 1770 Crystal Drive.
  • Purchase Pen Place and Met 6, 7, 8 land in JBG SMITH’s Future Development Pipeline with Estimated Potential Development Density of up to 4.1 million square feet. JBG SMITH has the right to time the expected closings of the land parcel sales to facilitate 1,031 exchange opportunities.
  • Engage JBG SMITH as its development partner, property manager, and retail leasing agent.
  • Commence predevelopment and planning of the first office building in 2018, with construction expected to begin in 2019.

The new renderings include a “multimodal transit hub” located near the pedestrian bridge linking Crystal City to Reagan National Airport, which Amazon has volunteered to help build as part of the project. It’s unclear where exactly the hub will be located.

The renderings also center around a second entrance for the Crystal City Metro station, an amenity long sought by the county but once seemed out of reach due to funding constraints. JBG Smith is currently working on a redevelopment of the area dubbed “Central District,” and those plans included a controversial proposal to build retail space over the new Metro entrance. New sketches suggest that the developer may push ahead with those plans, now that the construction of the second entrance is assured.

“The public and private sectors are currently investing billions of dollars in the National Landing area to improve infrastructure, expand on entertainment and retail options, enhance public spaces and introduce new/repositioned buildings,” Tracy Gabriel, president and executive director of the Crystal City Business Improvement District, wrote in a statement. “We believe that Amazon will help accelerate the transformation underway in Virginia’s largest walkable downtown, further growing and diversifying Crystal City’s economy, bolstering our already strong tech presence and attracting additional companies and investment.”

Also on the way for the area is a helipad, according to the county’s memorandum of understanding with the company.

“Arlington County staff will assist Amazon in its efforts to obtain required County Board, commonwealth and federal approvals for the development, construction, and operation (at the company’s expense)” of the project, according to the memo.

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As Amazon Rumors Intensify, Advocates Worry Arlington Won’t Press for Affordable Housing Help

As all signs continue to suggest that Crystal City will soon become home to at least half of Amazon’s new headquarters, affordable housing advocates are increasingly concerned that Arlington won’t force the tech giant to take action to mitigate the new office’s impact on housing prices in the county.

The company’s abrupt decision to split its “HQ2” between Crystal City and New York City, as detailed in a flurry of national news reports, means that Arlington could see only half of the 50,000 new jobs Amazon promised along with the new headquarters. Nevertheless, fears linger that the arrival of even a portion of those workers would further squeeze the county’s already tight housing market.

County and state officials have steadfastly refused to release any details about their pitch to Amazon, including details on potential economic incentives for the company, or any community benefits designed to account for how a sudden influx of thousands of workers might drive up housing prices and demand.

Amazon has also been mum on how it might set up shop in Crystal City, but speculation abounds that the company would move into the thousands of square feet of vacant office space controlled by JBG Smith, the area’s largest property owner. The real estate firm was intimately involved in assembling Crystal City’s HQ2 bid, and Arlington officials have salivated over the prospect that the company could reverse the county’s high office vacancy rate in one fell swoop.

But should Jeff Bezos and company move right in to that vacant space, experts worry that the county won’t have the ability to extract any cash for Arlington’s main tool for spurring the development of reasonably priced homes: the Affordable Housing Investment Fund, commonly known as the AHIF.

The program offers low-interest loans for new construction or redevelopment efforts to add more affordable housing in the county, and the county regularly requires developers behind high-density projects to contribute to the fund, in order to offset the impacts of that development on the rest of the county.

Yet Michelle Winters, the executive director of the Alliance for Housing Solutions, points out that Amazon could well avoid any such contribution, despite bringing thousands of highly paid workers to the area. After all, the company may simply prove to be a very, very large office tenant, and not plan any new construction in the county for years yet.

“These fees are a major component of how we pay for affordable housing in Arlington,” Winters told ARLnow. “But we just don’t know what kind of deal they’re potentially making with Amazon.”

Through a spokeswoman, Arlington Housing Director David Cristeal confirmed that the “county does not require AHIF contributions if a tenant moves into existing space without building anything new.”

“A developer or building lessee would not need to contribute to AHIF if they move into an existing building without requesting additional density and/or a site plan amendment,” Cristeal wrote. Site plan amendments, in general, are reserved for major construction projects.

County Board Chair Katie Cristol agrees with Cristeal’s assessment, noting that the “mechanisms for achieving contributions to the AHIF are tools available to us during the land-use process” only.

“The time at which we’d achieve something like that is as the building is built, not as a tenant moves in, which makes sense,” Cristol said.

What that means for the county’s potential deal with Amazon, Cristol can’t say. She says the county still has yet to work out the details of just how the tech giant would move in to Arlington, making it a bit too early to speculate on technical questions like potential AHIF contributions.

However, she did point out that the whole point of Arlington luring Amazon in the first place is to generate new tax revenue, which the county could then direct into the AHIF or other measures to preserve and create affordable housing.

“The reason to bring in new tenants to Arlington generally is they fund all those things,” Cristol said. “Whether it’s the AHIF, housing grants, public schools, transportation costs… It can be easy to lose sight of that.”

Of course, there are plenty of experts skeptical of just how much Amazon’s arrival will actually juice county revenues, especially if Arlington signs off on hefty tax breaks to lure the company here in the first place. For instance, the government accountability group Good Jobs First, an intense Amazon critic, estimates that localities can end up paying hundreds of thousands of dollars in subsidies for each job that a major new investor generates.

Kasia Tarczynska, a research analyst with Good Jobs First, notes that the county could always limit the tax breaks it offers the company and “use that money for affordable housing, public transit and workforce development.”

“In Boston, for example, as part of the incentive package, the city said it would invest $75 million in affordable housing, instead [of] giving that money to Amazon,” Tarczynska wrote in an email.

But that’s where the county’s secrecy around its offer to the company, which has been criticized by liberal and conservative activists alike, stymies further analysis.

Even still, Winters and Tarczynska both expect that the county could still work out a deal with Amazon that involves a contribution to the AHIF, or other affordable housing measures, even if it wouldn’t be strictly required by county ordinances.

“If I were Amazon, I would pay in more than what would ordinarily be required, because their own workers would benefit from more affordable housing in the community,” Winters said. “This is one of the biggest companies in the world… I’d imagine it could be considered the cost of doing business for them.”

Ben Beach, the legal director for the Partnership for Working Families, notes that plenty of other local officials have negotiated for such concessions as large companies have sought to move in to their communities. The question on his mind is whether Arlington officials will do the same.

“Local governments have a wide range of tools at their disposal; the question is simply political will,” Beach wrote in an email. “And in this case, we know there is substantial public money involved, so there’s really no excuse for anything less than a gold standard community benefits package.”

Photo via JBG Smith

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HQ2 Watch: The Case of the Mysterious Disappearing Tent

All signs point to Crystal City being a landing spot for at least half of Amazon’s proposed HQ2 — well, all but perhaps one.

The Washington Post, Wall Street Journal, New York Times and now NPR are all reporting that Crystal City is likely to be announced as the future home of a major Amazon office campus. The announcement could come as soon as this week.

NPR had perhaps the most direct reporting about Crystal City’s imminent selection, writing:

Amazon is still in the final stages of negotiations, the sources say, but Crystal City, Va., is expected to pick up one-half of the deal, the people told NPR. Crystal City is a suburb of Washington, D.C.

New York City has been reported as a potential second location.

Thus far ARLnow has not, in our own reporting, heard any definitive word that Crystal City will be selected. As part of our reporting, however, we’ve been tracking a tip regarding a temporary event tent.

Over the weekend, according to the tipster, a company called Select Event Group starting constructing a platform for a large, temporary event space on a vacant JBG Smith-owned property along S. Eads Street, near an Amazon-owned Whole Foods store.

“My best guess is that JBG Smith is preparing for an event where they’ll be celebrating HQ2,” said the tipster, whose apartment overlooks the site.

JBG Smith is the preeminent property owner in Crystal City and has been gussying up the neighborhood to, according to the Washington Business Journal, impress visiting Amazon executives. The painted bicycles the company has placed around the area are on a fence in front of where the event space was been set up.

Whatever the event space was intended for, it appears that plans might have changed. Today an ARLnow reporter saw the materials for the tent being packed up, loaded onto two rental tractor trailers and driven out of the area. Workers wearing blue Select Event Group hoodies oversaw the work.

Asked about the half-built event space and whether it was HQ2-related, a PR rep for JBG Smith dismissed it as “regular construction activity.”

Reached by phone, a man named Alex, who identified himself as the president of Select Event Group but did not give his last name, declined to answer ARLnow’s questions.

“We don’t comment about any of our open contracts,” he said, before hanging up.

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JBG Smith’s Major Crystal Square Project Nears Approval, Though Some Concerns Linger

Plans to transform a section of Crystal City into a new retail hub for the neighborhood could soon move ahead, though neighbors and cyclists are still pressing for changes to the redevelopment effort.

Many of JBG Smith’s plans for the “Crystal Square” project, centered on a block of Crystal Drive between 15th Street S. and 18th Street S., are up for approval by the County Board this weekend. The long-awaited project would completely revamp the existing office buildings on the block, adding a new movie theater, grocery store and other retailers to replace the existing Crystal City Shops at 1750.

County staff and planners have generally given the project a green light, given its potential to help speed along the transformation of a block centered around the area’s Metro station. Even still, some people living nearby worry that the construction will blot out some of Crystal City’s limited green space, and won’t address the neighborhood’s transportation challenges.

The heart of the Crystal Square development, backed by the area’s largest property owner, generally isn’t up for dispute. In all, JBG Smith plans to add 84,000 square feet of retail and commercial space along Crystal Drive by renovating some of the existing buildings on the property, and tacking on some additions as well.

The main draws will be a three-story movie theater, reportedly an Alamo Drafthouse location, and a 15,000-square-foot “small format specialty grocer,” like a Trader Joe’s or Whole Foods. Those businesses, and perhaps many others, will generally be centered closest to Crystal Drive’s intersection with 15th Street S., and the existing one-story retail in the area will likely be demolished to connect the theater and the grocery store, removing a small park in the process.

County staff note in a report for the Board that the proposal is “not a complete redevelopment that breaks up the existing superblock with new public streets,” as might eventually be desirable for the area, but it is a chance to “create a high-quality public realm…[that] enhances multimodal access and connectivity by placing large regional draws such as a movie theater and grocer within easy access of the Metro, bus stops, and VRE station.”

However, cycling advocates worry that all these plans will do little to improve connectivity to the Mt. Vernon Trail, leaving people highly dependent on cars in the area. The Washington Area Bicyclist Association is urging cyclists to press for protected bike lanes along both Crystal Drive and 18th Street S. to create a safer, low-stress place to bike that wouldn’t be constantly blocked by parked cars.

JBG Smith declined to comment for this article, but it seems the developer doesn’t see much room for protected bike lanes in the area. While a bike lane along Crystal Drive is included in the Crystal Square plans, county transportation staff told the Planning Commission back in February that “there is not enough space to provide a protected bike lane” on the road.

Eventually, JBG says it could also build a two-story retail building further down the block, at Crystal Drive’s intersection with 18th Street S. That feature has drawn a bit more scrutiny from neighbors, who note that the site was long envisioned as a new park to replace the green space set to be removed in the earlier construction.

“The proposed two-story building would take a chunk out of that green space and destroy the sight line from Crystal Drive up to Clark/Bell [Streets,” Crystal City Civic Association President Carol Fuller told ARLnow. “The CCCA has been fighting this for months.”

Fuller points out that the location is also the proposed place for a second Metro station entrance, but with the county putting the brakes on that project as it deals with a funding crunch, she argues it would make much more sense to delay consideration of adding a new building there as well. Otherwise, she sees it as a “poison pill” impacting the whole development proposal.

The Planning Commission ultimately voted to endorse that building back in May, though many members expressed grave concerns about the proposal. The Parks and Recreation Commission even said it was “premature” to allow the building until securing firm funding commitments from JBG to ensure a park of some kind is indeed built on the space.

Those concerns aside, the Board seems unlikely to take action on that part of the proposal, at least in the near term.

JBG is also asking for permission to revert one office building on Crystal Drive back to office space, doing away with plans to convert it into an apartment building, a move fueling speculation that the company wants to wait to see if Amazon tabs the neighborhood for its second headquarters before committing to plans for the building.

Staff recommend that the Board defer any consideration of that request, and plans for the two-story building, for up to a year, given all the uncertainty still surrounding the site.

The Board will take up consideration of the project at its meeting Saturday (Oct. 20).

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JBG Smith Launches New Experiment to Cool Down Crystal City Parking Lots

Crystal City’s biggest property owner is now testing out a new pavement sealant in a bid to bring down temperatures and reduce the “heat island” effect increasingly plaguing urban areas.

JBG Smith just sealed a pair of its parking lots in Crystal City, in front of an office building at 241 18th Street S., with a new product dubbed “CoolSeal,” which is designed to bring down temperatures on the asphalt by as much as 10 degrees during even the sunniest months of summer.

The reflective pavement treatment is gaining popularity in the Southwest as a way to reduce the amount of heat bouncing off of wide swaths of pavement, though JBG officials believe this is the first time any company has tested out this particular asphalt coating on the East Coast. The company plans to study the impact of the treatment on the roughly 18,000 square feet of pavement over the next year or so, and could someday starting using at its bevy of properties across the D.C. region.

“One of the benefits of being a larger property owner with a diverse portfolio is the ability to try new things,” Brian Coulter, JBG Smith’s chief development officer, told ARLnow. “We think a lot about, ‘How do we improve the built environment and the experience of people on the ground?’ And this could really make a difference in that respect.”

Coulter says he’d never heard of CoolSeal until reading about it in a landscaping magazine a few weeks back, and the product instantly struck him as a good fit for his company.

Researchers have increasingly found that D.C. has some of the most intense urban heat islands in the country, with the high concentrations of parking lots and buildings driving up temperatures in more developed neighborhoods when summer rolls around. Coulter says he never saw the heat in Crystal City as especially problematic, but because the company owns so much property in the neighborhood, he felt it was a natural spot to test out CoolSeal on as large a space as possible.

“It’s a big enough area where you’re not just dealing with a couple parking spaces,” Coulter said. “It just felt like a continuation of some of the other experiments and interventions we’ve done there before, particularly around public art.”

JBG ended up using about 550 gallons of the coating, with workers applying it to the parking lots over the course of the first two weekends in October. The company estimates the effort cost about $50,000, in all.

Yet Coulter believes the experiment could end up being well worth the expense if it works as intended. He says the company plans to measure the sealant’s impact on the temperature on the parking lots, and the surrounding area, through the end of next summer to see how it works in practice.

Should it have a notable impact, Coulter expects JBG could use CoolSeal all throughout its properties in both Crystal City and Pentagon City, as part of the developer’s continuing efforts to link the neighborhoods together. The company has all manner of new projects underway in Crystal City, fueling Amazon HQ2 speculation with its dominance in the area, and is also backing the major PenPlace development in Pentagon City.

“We see those two areas as part of the broader neighborhood, and one way to better establish that is with the pedestrian experience,” Coulter said. “If this is done well, it will work well for the people who visit and the people who live there.”

He doesn’t think CoolSeal needs to be limited to just parking lots, either. He envisions everywhere from basketball courts to bike trails to the roofs of tall buildings being ripe for the heat-reducing treatment, and that goes for all of JBG’s properties around the D.C. area.

“We’re really excited about the possibility and potential of this,” Coulter said. “Because, clearly, if this has the type of impact we’re looking for, it really does fit in nicely with everything we’re trying to do.”

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JBG Smith Changes Course on Crystal City Property, Flips From Residential to Office

Despite continued high office vacancy rates, developer JBG Smith has abruptly reversed course on a plan to convert an aging Crystal City office building to apartments.

At an Arlington County Site Plan Review Committee meeting on Monday, the company presented an updated plan to renovate the 12-floor, 242,000 square foot building at 1750 Crystal Drive and modernize the building facade. The change comes less than a year after JBG Smith filed a plan to convert the office building into a 21-story residential tower, which in turn was a change in course from an approved circa-2015 plan to modernize the building and keep it as office space.

The new-new plan changes the building’s address to 1770 Crystal Drive and better integrates it into planned pedestrian improvements and the “Central District” retail cluster, which is to include an Alamo Drafthouse Cinema, restaurants with outdoor seating and a possible small-format grocery store.

The flip back to office will undoubtedly pique the interest of those trying to read the Amazon HQ2 tea leaves.

Betting markets and industry observers think the D.C. area is the most likely destination for the company’s second headquarters, and sources tell ARLnow.com that Crystal City is by far the most likely D.C. area location for it. Meanwhile, office vacancy in Crystal City remains high — it was just below 20 percent as of a year ago, according to county data — and the neighborhood’s largest and most influential landowner has scrapped an ambitious residential conversion plan in favor of sprucing up currently-vacant office space.

Amazon CEO Jeff Bezos said last week that an HQ2 decision will be announced by the end of the year. The company’s request for proposals specifies that HQ2 will require a large amount of office space — 500,000+ square feet — in a relatively short period of time after the announcement.

A spokesman for JBG Smith was not immediately available to comment, according to a PR rep for the company.

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Parking Plans Spark Debate Over Pentagon City’s PenPlace Development

Plans for a new parking lot at the large “PenPlace” development in Pentagon City are shaping up to cause a bit of friction between county staff and the project’s developer.

JBG Smith is hoping to build a temporary, 204-space retail parking lot adjacent to the development, located on a nine-acre plot of land along S. Fern Street and just off Army Navy Drive. But Arlington officials would much rather see the developer construct a lot roughly a quarter of that size, over fears that so much parking would contribute to a car-dependent culture in the area.

The real estate firm argues that the parking is necessary to meet demands of the up to 50,000 square feet of retailers who will someday occupy the development, noting that the lot will only be a temporary necessity. Yet county staff have repeatedly insisted on changes, marking another dust-up over the development after officials previously expressed skepticism about JBG’s desire to significantly scale back the size of some buildings planned for the site.

The County Board approved the project back in 2013, when it was proposed by Vornado before the company spun off its D.C. holdings in a merger to form JBG Smith. Original plans called for three office buildings between 20 and 22 stories tall, an 18-story, 300-room hotel and a 300-unit apartment building between 16 and 18 stories tall.

JBG decided earlier this year to spread the residential space among two seven-story buildings instead, shifting the hotel rooms to some of the other buildings on the site, which prompted a new round of county scrutiny of the project.

Documents prepared for the project’s Site Plan Review Committee over the last few months show that county staff remain concerned about the reduced density on the site, citing the “dramatically lower heights and scale” of the seven-story buildings as especially problematic given their potential to house people close to the Pentagon City Metro station. Arlington planners previously called it “highly unusual” that a developer would seek to build something less dense than originally approved, though JBG executives have said the change was meant to “improve the pedestrian experience in the area.”

The newest debate centers around the parking lot proposed for a new segment of 11th Street S., which would sit behind two of the buildings to be built along S. Eads Street.

JBG argues that its plans for copious new retail in the area make the new lot essential, at least until another 1,600 parking spaces become available as the developer builds garages alongside the office buildings it has planned for the area.

“In addition, the applicant has claimed that a larger amount of parking is necessary due to the type of retailers being sought,” county staff wrote in a July 23 SPRC report on PenPlace. A JBG executive did not respond to a request for comment on the exact nature of the developer’s plans.

But to add so much parking for the new buildings, JBG needs an exception from the county’s zoning ordinance, which only lets developers construct one space for every 1,000 square feet of retail space. JBG’s proposal, by contrast, works out to about one space for every 196 square feet.

That’s a problem for county officials, who believe the parking lot “encourages auto traffic to the site, and proliferates surface parking.”

JBG has offered to shrink the size of the lot slightly, adding a 10,000-square-foot temporary dog park to cut the number of spaces to 180. Arlington planners wrote in the July 23 report that such an offer is an “improvement,” but lament that the change “does not address comments from staff regarding confining parking lots to future building footprints.”

So far, the SPRC has met four times to discuss the PenPlace plans, but does not yet have another meeting scheduled to hash out this dispute. Plans will ultimately need to go to the Planning Commission and then the County Board for final approval.

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