Arlington Approves $23M Amazon HQ2 Incentive Package Over Shouts Of 'Shame'
A six-hour hearing disrupted by a series of protests ended with the Arlington County Board approving a $23M incentive package for Amazon Saturday, clearing a significant hurdle in the creation of the tech giant's second headquarters.
The unanimous vote to approve came after a lengthy and contentious hearing, during which business leaders and other community groups voiced support for HQ2, while opponents expressed concerns and disrupted the hearing when Amazon officials spoke.
More than 110 residents signed up to speak at the hearing, filling the hearing room and spilling into the overflow room next door. Many supporters and opponents held signs expressing their opinions, and groups demonstrated outside the building before the hearing.
Despite County Board Chair Christian Dorsey’s initial request for the audience to remain silent, the hearing was filled with cheers, boos, laughs and other jeering. The outbursts continued when Amazon officials spoke later in the hearing, with Dorsey warning he would clear the public from the roof if the interruptions did not stop.
Opponents then disrupted during the board's question-and-answer session with Amazon officials. Dorsey called a recess and board members and Amazon officials exited through a back door as opponents repeatedly shouted "shame." The board returned to continue the hearing shortly thereafter, but Amazon officials did not return.
The board continued the hearing by asking questions of county staff members before moving to approve the motion. Before the vote was taken, a loud protestor interrupted the hearing with an expletive-filled speech before security removed him.
Board members then gave concluding statements and ultimately voted unanimously to approve the package around 7:25 p.m., more than six hours after the Amazon portion of the hearing began.
"The relatively modest incentives that Arlington is providing are offered so we can create the conditions for all Arlingtonians to thrive," Dorsey said.
Those speaking in support of the incentive package included business leaders, real estate owners, civic association leaders and other community residents. Supporters highlighted benefits such as Amazon’s effect on the economy of Arlington and the region, strengthening the tax base and creating jobs for the area’s college graduates. Some supportive residents highlighted the amenities Amazon’s arrival could bring in the neighborhood, such as restaurants and retail.
"The No. 1 question I get from residents I talk to is, 'Which restaurants are coming and when?' Crystal City Civic Association Treasurer Eric Cassel said. "That’s what they’re concerned about, the cultural and economic influence this will bring after BRAC destroyed our neighborhood."
Many Arlington residents also spoke in opposition to the agreement, highlighting concerns such as rising housing prices and rents, displacement of low-income people and people of color, and pressure on the area’s education and transportation systems.
"You are accelerating the forced displacement of working-class people of color," Tenants and Workers United Executive Director Evelin Urrutia said. "We need incentives for our own communities."
Supporters responded to some of the opponents' concerns, saying that the county should embrace Amazon’s arrival as an opportunity to address major challenges it faces.
"Amazon brings pressure and challenges to the region that we as a community are going to have to come together and solve," Columbia Pike Revitalization Organization Board Member Karen Rosales said. "All change brings challenge; even good change brings challenges."
Opponents also criticized Amazon’s business and labor practices and said the trillion-dollar company does not need a $23M incentive package to grow in the region.
Amazon Head of Worldwide Economic Development Holly Sullivan, Vice President of Public Policy Brian Huseman and Public Policy Director Andrea Fava represented the company at the hearing. Sullivan emphasized the jobs Amazon will create and said it plans to invest the money from the incentive package into the development of its offices and surrounding infrastructure in Arlington.
“We don’t just create a corporate headquarters; we create a neighborhood," Sullivan said. "We want to be thoughtful about green spaces and infrastructure and this incentive we will utilize to do that.”
The board ultimately decided to support the incentive agreement, allowing the HQ2 process to move forward. The board's support of the agreement comes after Amazon backed out of its plans for an HQ2 campus in New York City amid opposition from local officials and activists over a $3B combined incentive package.
Arlington's $23M incentive package represents a small piece of the money Amazon could receive for its Northern Virginia headquarters. Virginia Gov. Ralph Northam Feb. 5 signed an incentive bill that could give Amazon up to $750M, dependent upon job creation. The company would receive $550M if it creates 25,000 jobs with an average salary of $150,000, and it is eligible for an additional $200M if it creates another 12,850 jobs.
The state also committed more than $1B toward infrastructure improvements in the area and a new, satellite campus for Virginia Tech to help feed talent for Amazon and other companies in the region.
The county's incentives are dependent upon the amount of office space Amazon occupies, setting annual targets it must reach to obtain the full $23M. Its first target is to reach 64K SF by June 30, 2020, followed by 253K SF a year later and 567K SF in 2022. Amazon has agreed to lease 537K SF from JBG Smith in Crystal City, with plans to begin moving in employees this year as it prepares to construct the new buildings for its campus.
The final target the package sets is 6M SF in 2035. Amazon has said it would occupy at least 4M SF and create at least 25,000 jobs, but it could create as many as 37,850 jobs and occupy over 6M SF.
If Amazon does not reach the square footage targets, it could still receive a portion of the incentives, as long as it surpasses 50% of the annual goals.
The money would come from Arlington’s tax on hotel rooms. The county projects Amazon’s campus will generate significant growth in the hotel market and create over $100M in additional tax revenue, making the incentive package represent a fraction of the money the county brings in.
Amazon is also eligible for a series of incentives that are not included in the agreement but are available to any qualified company in Arlington. The county offers incentives for green building development that achieves above LEED Silver certification, to technology companies that locate in Arlington, and it provides assistance for corporate relocation and workforce development.
The state and county have also agreed to make significant investments in boosting the area’s talent pipeline and improving its infrastructure. The investments include $500M from Virginia for the new Virginia Tech Innovation Campus planned for the southern portion of National Landing. It also includes at least $195M from Virginia for transportation projects such as new Metro entrances at the Crystal City and future Potomac Yard stations and a new pedestrian bridge to Reagan National Airport.
Arlington County plans to make up to $360M in transportation investments to improve streets, trails, transit stations and other infrastructure. Alexandria plans to invest up to $348M for the new Potomac Yard Metro station and additional traffic mitigation projects. The jurisdictions also plan to invest a combined $225M in affordable housing programs that could create over 2,000 new units.
With the incentive agreement passed, the next regulatory hurdles for Amazon to clear will be the zoning approvals for its buildings. JBG Smith has begun to apply for renovations for the buildings Amazon will lease, and it is going through its design process for the new construction projects before bringing its plans to the county.
“This is not our last conversation on Amazon," Dorsey said at the end of the hearing. "The work now truly begins.”