Leaders downplay Amazon HQ2 pause: Landrum and Wilson emphasize benefits already received from the state, Amazon, VT

Leaders downplay Amazon HQ2 pause: Landrum and Wilson emphasize benefits already received from the state, Amazon, VT
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By Amy Will | awill@alextimes.com 

In March, global technology titan Amazon declared a halt on phase II of its headquarters development in Arlington, the much-anticipated PenPlace. Now in the shadow of the company’s phase I Metropolitan Park site, groundbreaking on the second campus has been delayed until at least 2024.

This announcement came down as Amazon prepares to hand out pink slips to close to 27,000 employees. Layoffs were announced in two rounds, with the first being the largest in the company’s history.

Two Alexandria leaders, Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership, and Alexandria Mayor Justin Wilson said the delay of PenPlace is
just a blip that is insignificant in the bigger picture.

Landrum said Amazon’s promise to invest in Northern Virginia and put 25,000 people to work remains solid. “It’s not really a huge cause for alarm, it’s actually very reasonable and relatable behavior,” Landrum explained.

Landrum said post-pandemic times have left many employers wondering how
much office space they really need. “So really not surprising that Amazon would pause before diving in, building this huge second set of buildings,” she added.

The sprawling 2.1-million-square-foot Metropolitan Park complex is scheduled to open in June and will consist of two 22-story towers with both office and retail space. Much consideration has gone into the physical layout of the HQ2 buildings, which are expected
to be eye-catching pieces of architecture.

The latest cuts in Amazon’s spending and workforce, however, have left many wondering if the agreement between Amazon and the state of Virginia – which convinced the tech behemoth to choose the Arlington site, just across
the Alexandria city line – is sustainable.

“The state and Amazon entered a memorandum of understanding that explains what each party must deliver as part of the HQ2 deal. The majority of state dollars are being filtered into workforce, transit and housing,” Landrum said.

The Times reached out to Amazon regarding their long-term commitment to the area, including the pledge to create 25,000 jobs. The company re-emphasized its commitment to the region. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia and the greater Capital Region.” It added, “In fact, we are currently ahead of hiring at HQ2. This shift is not a result of, nor indicative of, recent role eliminations.”

Amazon’s investments to date in the region have been hefty. Landrum said Amazon has
“meaningfully contributed dollars and volunteer efforts” to a variety of Alexandria-based organizations. For example, ACT for Alexandria, Alexandria Chamber of Commerce, Campagna Center, Good Shepherd Housing and Volunteer Alexandria have received contributions.

Last year, the Bezos Day 1 Family Fund, created by Amazon founder Jeff Bezos, presented a $2.5 million grant to Alexandria’s Carpenter’s Shelter. Landrum shared that the tech company also set up a Housing Equity Fund, with $51.4 million in low-rate loans for Park Vue Apartments and $2.3 million for Parc Square Apartments in Arlandria.

To fully understand Amazon’s reach across our area, it is important to start at the
beginning – with the 2018 agreement that led to Arlington being chosen for HQ2, land adjacent to the new Virginia Tech Innovation campus in Alexandria.

“Our strategy in winning Amazon was to be really upfront with our weaknesses,” Landrum explained. “And we identified kind of three major issues.”

She described being transparent about a need for better transportation, funding for affordable housing and a boost in jobs.

“We had a very low unemployment rate and so we wanted to be able to demon-
strate that there was a pipeline of new talent that would be available to work at the headquarters,” Landrum said.

Wilson shared that city leaders are constantly looking to bring new employers to Alexandria. “We’re always going to seek investment in the city,” he said.

But he cautions people not to place too much importance on HQ2. “I did think it was a good win for the city, but I think people were making too much of a deal when it happened and too much of a deal now,” he said.

“I think it remains to be seen what their financial pullback
will be. They’ve funded some very important projects in the city. If they pull back, that’s unfortunate,” Wilson added.

One of five major transportation projects to come out of the state’s deal with Amazon
is an additional entrance to the new Potomac Yard Metro, the 98th Metrorail station, which
is under construction between the Reagan National Airport and Braddock Road stations.

A Southern entrance was part of the original plan, well before HQ2 was a twinkle in anyone’s eye, but was eliminated for cost reasons. The removal of the Southern entrance from plans for the station was controversial, and a resident-filed Freedom of Information Act request showed that some city leaders were not forthcoming about what they knew regarding the removal of the entrance.

According to Landrum, the Southwest entrance is valued at approximately $50 million.
The State of Virginia agreed to provide funding to restore that entrance to the Potomac Yard Metro. A second major development move is a Pentagon City transit expansion.

Officials hope five new transit stations and additional bus lanes will help to alleviate the increase in traffic. The other three state-funded projects include a Crystal City East Metro Entrance, improvements to Route 1 and a connector bridge from National Landing –
formerly known as Crystal City– to Reagan National Airport.

While the HQ2 campus is located wholly in Arlington, the Virginia Tech Innovation Campus, which is nearing completion, was Alexandria’s prize. Landrum explained that as a part of the HQ2 investment package, the state committed $250 million to Virginia Tech to
build their campus in the city.

“The Virginia Tech Innovation Campus was part of our pitch and contractually, they
are obligated to produce 750 graduates every year with a STEM degree who would be the
sort of talent Amazon would be interested in,” Landrum said.

The Times also reported in May 2021 on an economic partnership between VT and Boeing, which has helped to bring the vision to fruition.

According to the school, “the Innovation Campus will house 750 Master of Engneering students, 50 faculty, and dozens of corporate partners. The ability to offer competitive scholarships, named professorships, and access to cutting-edge facilities and groundbreaking academic programming is vital to achieving this scale and harnessing the full potential of the Innovation Campus.”

Virginia Tech has also established a program within Alexandria City Public Schools that will expose budding engineers to robotics. Students are expected to fill the Alexandria complex by fall. Wilson calls the $1 billion Innovation Campus a “huge investment in the city.”

Alexandria’s key players in HQ2 are not worried about the company’s shift in plans.
Landrum and Wilson both said the city has already benefited from the project.

“If we were sort of looking at a report card and we had, you know, here’s what was promised and what was delivered for Alexandria, it’s 100%,” Landrum said.

“In the end, what the state has funded is transportation and housing, which is great,”
Wilson explained. He again reminded the community not to read too much into the latest
developments. “From the beginning I made it clear to people 25,000 jobs is a lot of jobs, but that’s a small portion of a very large economy in this region,” Wilson added.

When asked about the pause on PenPlace, Amazon responded:
“We’re always evaluating space plans to make sure they fit our business needs and to
create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit.”