Article on what Virginia/Arlington offered/received:
By
Katie Arcieri – Staff Reporter, Washington Business Journal
Nov 13, 2018, 12:16pm EST Updated 57 minutes ago
As Virginia was battling states like Maryland and New Jersey
for Amazon's second headquarters project, Virginia state Sen.
Frank Ruff knew one thing for sure.
"We were not going to get into the bidding war," said Ruff, chairman of the state's Major Employment and Investment Commission, which vets incentive packages for companies considering expansions in Virginia.
Even as incentive packages reportedly soared into the billions of dollars in the lead-up to the HQ2 announcement, Virginia leaders said their win — split in half with Long Island City in Queens — was based on a package that included not only financial incentives but also significant public investments in transportation and education. In all, Virginia and Arlington are offering roughly $800 million in public incentives, considerably less than the roughly $1.8 billion New York has proposed based on Amazon's new job and real estate requirements and the $8.5 billion and $7 billion incentive plans that Maryland and New Jersey, respectively, had been prepared to throw the online company's way. Instead, in their package, Virginia and its jurisdictions focused millions more in investments to boost local university curricula and the tech workforce pipeline.
In return, Amazon is expected to bring a $2.5 billion investment, 25,000 new jobs and 4 million square feet in development, with the potential to double that, to National Landing, a combination of Arlington's Crystal City and Pentagon City and Alexandria's Potomac Yard — targets the company must meet before it receives the incentive payments, Ruff said.
Stephen Moret, president and CEO of the Virginia Economic Development Partnership, said special legislation must be passed by the General Assembly before Amazon can qualify for workforce cash grant incentives.
"The leadership is already on board, but it has to go through the full process," Moret said.
Here's how the incentive package breaks down:
From the commonwealth of Virginia, it includes:
- Workforce cash grants totaling up to $550 million for the 25,000 new jobs, or $22,000 per new job that's created with a wage of at least $150,000. That's considered the first phase of hiring. Amazon is eligible for another $200 million in grants if it creates an additional 12,850 new jobs beyond the initial 25,000.
- $195 million of nongeneral fund money in infrastructure investments, including new entrances to the Crystal City Metro station and the to-be-built Potomac Yard Metro station, improvements to Route 1, a pedestrian bridge connecting Crystal City and Reagan National Airport and a transitway expansion that serves all of National Landing.
From Arlington County, it includes:
- An annual performance cash grant totaling $23 million across 15 years tied to Amazon's ability to meet office occupancy targets for 6 million square feet in that time. Those funds come from a portion of the county's Transient Occupancy Tax, which a tourist and traveler tax for rooms or other lodging they rent in local hotels, motels or homes.
- $28 million in tax-increment financing across a projected 10 years, based on 12 percent of future property tax revenue expected from Amazon. The county said it would use that funding toward improving streetscapes, community parks, on-site infrastructure and open space in National Landing.
In addition, both Virginia and the localities are investing in George Mason University's campus in Arlington, where they're funding new master's degree programs in computer science and other fields, and Virginia Tech in Alexandria, where that school
plans a new $1 billion innovation campus.
For both of those measures, the commonwealth said it would offer $375 million in performance-based grants across two decades — provided each university gets a one-to-one match from donors. In addition, Virginia leaders said they would invest $50 million in the next 20 years in K-12 tech education and college internships at local tech companies, as well as performance-based payments in tech-related bachelor's degree programs with public universities or community colleges that participate in the program.
"It's great for the commonwealth overall — not just that site and not just Northern Virginia," Ruff said. "The revenues that will be produced in the years to come will serve the entire state — education, public safety, mental health, all the issues that are present."
The city of Alexandria, in turn, entered into a memorandum of understanding with Virginia Tech to structure a financial plan to build out its innovation campus. That could include more local public funding and an expedited regulatory process.
That education piece was key for Virginia's offerings, said Ruff, who said he heard Amazon's final decision Monday evening at 6:30 p.m. as he flew from Richmond to Crystal City for the announcement.
"That was a big part of our commitment," he said. "The incentive for jobs was really no greater than what we've done for other companies of any other size."