Amazon selects Crystal City for HQ2

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The National Landing neighborhood will be split into North District, Central District and South District, combining parts of Potomac Yard, Crystal City and Pentagon City. (Screenshot of the Northern Virginia Proposal for Amazon's New Headquarters presentation)
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By Missy Schrott | mschrott@alextimes.com

 

After more than a year of deliberation on a location for Amazon’s second headquarters, the company announced Tuesday that two new headquarters would be established in Arlington and New York City.

The Arlington headquarters will be located in National Landing, a newly branded neighborhood adjacent to Reagan National Airport that will encompass parts of Pentagon City and Crystal City in Arlington and Potomac Yard in Alexandria.

As part of the project, Virginia Tech will develop an Innovation Campus in National Landing to fill demand for high-tech talent in the region, according to a city press release. While Amazon’s initial development plans will focus on properties in Arlington, the Virginia Tech Innovation Campus will be developed on the Alexandria portion of the site.

“I think for Alexandria that is the biggest gain for the city is getting a cutting edge research institution,” City Manager Mark Jinks said. “… We don’t have a higher ed campus in the city, so this is something we needed. This is a great step forward for the city.”

Amazon will invest $2.5 billion in the National Landing location and establish more than 25,000 jobs, according to the release. The new area will include 4 million square feet of energy-efficient office space with the potential to increase to 8 million square feet.

“Having 25,000 jobs come in – it’s equivalent to, you know, we had the National Science Foundation come to Alexandria and that’s about 2,000 jobs, and that’s about on average how much Amazon would be adding per year for the next 12 years,” Jinks said.

Amazon first made public a Request for Proposal to municipalities for the location of HQ2 in September 2017. Since then, Arlington County and the City of Alexandria have been working together in a regional partnership to deliver a proposal to Amazon. The Virginia Economic Development Partnership led the collaboration with Arlington, Alexandria and developer JBG SMITH.

“Throughout this process, we have worked with our colleagues in Arlington to highlight the collective strengths of our communities – our workforce, education, infrastructure and our unparalleled quality of life – all of which will be strengthened by this new investment from Amazon, the Commonwealth and our localities,” Mayor Allison Silberberg said. “… This is a game changer for us and Virginia Tech and our region.”

Vice Mayor Justin Wilson said developing the proposal with other jurisdictions resulted in new partnerships being forged.

“In the past in this region, economic development has been done every man or woman for themselves,” Wilson said. “Arlington on their own, Alexandria on their own, Fairfax County on their own. In this case, we recognized that this was a big enough effort and a win for any of us was going to be a win for us all. So we all went in together, and we did this together, and we put aside our parochial interests to make this happen.”

Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership, said the successful proposal proved that two of the smallest communities in Northern Virginia had been successful by combining forces. She said Arlington and Alexandria are committed to continue working together over the coming years as National Landing is developed.

“We’re not just next door neighbors – the average person doesn’t know when they’ve crossed the line from Crystal City to Potomac Yard,” she said. “We’ve worked really hard to literally erase that boundary, and moving forward we’ll be doing more to erase that.”

Landrum said Northern Virginia’s proposal to Amazon focused on three main categories: transit and transportation, affordability and the tech-talent pipeline. The proposal presented Amazon with a 150-acre site composed of existing vacant buildings and developable land. It highlighted the three Metro stations within walking distance and the opportunity to establish a major headquarters in a thriving urban environment.

One major benefit to come out of Amazon’s selection of Northern Virginia will be state investments in education, transportation and housing.

One positive aspect for Alexandria is that state funding will enable the southern entrance to be added back onto the Potomac Yard Metro Station. The city had previously removed this entrance in the spring, sparking outrage from the community.

In addition to up to $195 million in state funding for transportation, Alexandria and Arlington together plan to invest $570 million in transportation projects to manage the growth in the region, according to the city press release.

The state will also provide $150 million from the state housing authority to go toward affordable and workforce housing over the next decade, according to Jinks.

“We had the state come to the table with some very significant assistance,” Wilson said, “… with not only the second entrance, improvement to the road network and safety nearby, expansion and enhancement of the Metroway service that runs on Route 1, as well as significant investments from the Virginia Housing Development Administration for affordable housing.”

Regarding impacts on Alexandria, Wilson said the increased density in Alexandria had been expected. He said Oakville Triangle – the section of Potomac Yard to be included in the new National Landing – had been planned with the effects of increased density in mind when the small area plan was developed.

“We’re not starting from scratch here,” he said. “This was a plan we approved years ago. And we envisioned this amount of density, and we envisioned how we would address it and handle it from a variety of different perspectives – transportation, open space, housing, all the different impacts on quality of life.”

Landrum said when the plan for Oakville Triangle was approved three years ago, it had been prepared for this exact type of mixed use.

“This is going to jumpstart a development that was on hold,” she said.

Jinks echoed that any increased density would be readily absorbed not only in Oakville Triangle, but in Crystal City.

“There had been some concern expressed about 25,000 [jobs], what does that do for the transportation network?” Jinks said. “One point that has not been in the press yet and that is Crystal City is down about 25,000 jobs from their peak about 15 years ago. In effect, Amazon just brings them back to where they used to be.”

Regarding Amazon’s economic impact on Alexandria, Will Wiard, managing broker for Weichert Old Town Alexandria and a member of the board of directors for Virginia REALTORS, said the majority of the effects from Amazon’s relocation would be positive.

“[There’s] a tremendous amount of tax revenue as well as talent coming to the region that I don’t think D.C.’s even seen,” he said. “It’s going to be rejuvenation. It’s going to be great. I think all the reports and data analytics that I’ve pulled on have showed nothing but positive outlooks so I’m really excited,” he said.

He said the new headquarters would especially benefit the real estate market.

“If you have all spectrums of real estate, looking at having a company such as Amazon … coming to that area, I think it’s going to not only increase prices or build even more inventory from a condo or apartment perspective, but also bring another wave of investors and other people to the area that I don’t think we’ve seen yet. So where it currently is, we’re going to grow it even more,” Wiard said.

Jinks also said the positive impacts on the regional economy would far outweigh any negative impacts brought on by increased density.

“It’s a regional impact, that’s the way to measure it,” he said. “We will see by all accounts, the studies that have been done show that every dollar they spend means another dollar and 40 cents will be spent in the community. That’s been kind of the math in Seattle, so what we’ll see is related businesses will come here to grow here and particularly commercial property values, which has been a problem for the city, we’ll see those increase.”

Since Amazon’s headquarters will be located in Arlington, Jinks said Alexandria won’t collect any taxes directly from the company, but will see secondary benefits.

“They will end up hiring Alexandria residents, they will hire people from other parts of the country who will move here, who will move to the city, who will spend their dollars in our restaurants and our retail stores, so that’s the kind of secondary benefit we’ll see in sales taxes and property taxes,” he said.

The other Amazon headquarters site will be established in Long Island City, New York. The two new headquarters will join Amazon’s Seattle, Washington headquarters as the company’s three headquarters in Northern America. Hiring at both of the new locations will begin in 2019.

“This is a major game changer for the region, for Northern Virginia and for Alexandria,” Jinks said. “… I can’t say enough good things about the state economic development agency and putting together what we understood from Amazon to be one of the better, more thorough proposals of all the 238 they got across the country.”

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1 COMMENT

  1. Why do the words “congestion” and “gridlock” keep popping up in my mind? Route 1 is already a mess to contend with seven days a week, and just because there are three Metro stations in the area doesn’t relieve the crush of people using the same stretch of track each serves. I thought Amazon wanted to avoid traffic, high taxes and housing costs, and heavy-handed regulatory structures in choosing a new location. Foolish me to have believed them.