f
An Amazonian Deal
0
Votes

An Amazonian Deal

Decision encompasses Crystal City, Pentagon City and Potomac Yard.

Amazon’s selection of Arlington as one of its two new headquarters became official Tuesday, Nov. 13. Along with New York City, Arlington will be part of a $5 billion investment, expected to create more than 50,000 jobs across the two new headquarters’ locations.

The new Washington, D.C. metro headquarters will be located in National Landing; the newly named National Landing is made up of Crystal City in Arlington as well as portions of Pentagon City in Arlington and Potomac Yard in the City of Alexandria.

The area is served by three Metro stations, commuter rail access, and Reagan National Airport — all within walking distance. The community has a variety of hotels, restaurants, high-rise apartment buildings, retail, and commercial offices.

As part of Amazon’s new headquarters, the region will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with the opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of $3.2 billion over the next 20 years as a result of Amazon’s investment and job creation, according to the company’s press release.

Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted high-paying jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.

The region and Amazon employees will benefit from the Commonwealth investing $195 million in infrastructure in the neighborhood, including improvements to the Crystal City and the Potomac Yards Metro stations; a pedestrian bridge connecting National Landing and Reagan National Airport; and work to improve safety, accessibility, and the pedestrian experience crossing Route 1 over the next 10 years. Arlington will also dedicate an estimated $28 million based on 12 percent of future property tax revenues earned from an existing Tax Increment Financing district for on-site infrastructure and open space in National Landing.

Arlington and Alexandria partnered with property owner and developer JBG Smith to present Amazon with a 150-acre site — a mixture of existing vacant buildings and developable land. Amazon’s initial development plans focus on JBG Smith-owned properties in Crystal City and Pentagon City in Arlington County, while the new Virginia Tech Innovation Campus will be developed in the Alexandria portion of the National Landing site.

In Alexandria’s portion of Potomac Yard, Virginia Tech and the Commonwealth intend to provide funding for an Innovation Campus near Amazon’s new headquarters to build a graduate campus in the southern portion of National Landing. Degree programs and research opportunities will focus on computer sciences and software engineering, while offering specializations in high-demand areas, including data sciences; analytics and collective decisions; security and the Internet of Things; and technology and policy.

As part of the Commonwealth’s increased investment in the tech-talent pipeline, Arlington and Alexandria public schools will have access to new resources related to computer science education, to be made available statewide. They include: ongoing professional development for current and future teachers; high-quality curriculum and related resources; summer and after-school programming for students; and meaningful career exposure and work-based learning opportunities in high-demand fields.

Arlington County and the City of Alexandria are investing $570 million in transportation projects, including rail connections, transit facilities, multimodal streets and transportation technology serving the site, all of which were planned as part of County Board- and City Council-approved long-term Capital Improvement Plans. Arlington and Alexandria are also pursuing additional funding opportunities to advance investments in this corridor.

To augment these local investments, the Commonwealth will invest up to $195 million of non-general fund money in new or expanded transportation projects to improve mobility in the region, including an additional entrance to the Crystal City Metro station and a south entrance off of Potomac Avenue to the new Potomac Yard Metro station. Other projects include improvements to U.S. Route 1 in Arlington County, a pedestrian bridge from Crystal City to Reagan National Airport and a transitway expansion supporting Pentagon City, Crystal City and Potomac Yard in both Alexandria and Arlington.

As part of this project announcement, both communities will fund affordable housing, workforce housing and public infrastructure, bolstered by revenues generated from Amazon’s new presence in their communities. Combined, the communities project investment of at least $150 million over the next decade, resulting in the creation and preservation of 2,000 to 2,400 affordable and workforce units in and around the Crystal City, Pentagon City and Columbia Pike areas and throughout Alexandria.

Arlington’s proposed direct financial incentive to Amazon is an annual pay-for-performance grant tied to the company meeting 6 million square feet in office occupancy targets over the initial 15 years with a value of approximately $23 million. The incentive comes from a percentage of the new incremental revenue generated by the county’s Transient Occupancy Tax (TOT), which is a tax paid by tourists and business travelers on hotel rooms or other paid lodging.

In addition to direct financial incentives, Arlington County also proposed using a portion of new incremental revenue generated by Amazon’s arrival within the existing Tax Increment Financing (TIF) area to make strategic infrastructure investments in and around National Landing.

The Arlington County Board will vote on a final incentive agreement no earlier than February 2019 and will follow its regular public engagement and hearing process for development decisions.

To facilitate the development of Virginia Tech’s Innovation Campus in National Landing, Alexandria has entered into a Memorandum of Understanding with the university in which the city agreed to work with Virginia Tech to structure a financial plan for development, potentially including local financial support, as well as providing expedited processing for planning and development approvals and permits. The Innovation Campus will be located in the Alexandria portion of National Landing on land owned by investment firm Blackstone Group L.P. real estate fund. The land is commonly referred to as Oakville Triangle and will be developed by Stonebridge Associates. The city will follow its public engagement and hearing processes for any required planning and development decisions, and any other city commitments will be decided on by City Council.