Opinion: Editorial: Half Might Be Perfect

Opinion: Editorial: Half Might Be Perfect

Amazon’s “second headquarters” in Arlington will bring benefits to Fairfax County.

Amazon this week announced that it would split its much-discussed “second headquarters” between New York City and Crystal City in Arlington.

Amazon will invest $5 billion and create more than 50,000 jobs across the two new locations, with more than 25,000 employees each in New York City and Arlington. The new locations will join Seattle as the company’s three headquarters in North America.

Amazon’s investments in each new headquarters will spur the creation of tens of thousands of additional jobs in the surrounding communities. Hiring at both the new headquarters will begin in 2019.

“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come,” said Jeff Bezos, founder and CEO of Amazon, called the world’s wealthiest human. “The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

“This is fantastic news for our region,” said Sharon Bulova, chairman of the Fairfax County Board of Supervisors. “We look forward to welcoming Amazon as our newest corporate neighbor.”

There are no companies in Northern Virginia with close to as many employees as Amazon will have over the next 5-10 years. Inova Health Systems is the only company with more than 10,000 employees.

But the Pentagon, likely one of Amazon’s closest neighbors in Arlington, has 26,000 employees.

Fairfax County Public Schools has 24,137 full-time employees, dispersed around the county. Fairfax County government employs more than 12,000.

The 25,000 Amazon jobs in Arlington will pay better on average than most local government jobs, with an average wage of more than $150,000. Those employees will live with their families all over the Northern Virginia and DC area.

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.

Amazon will invest in 4 million square feet of office space, with the opportunity to expand to 8 million.

Fairfax County and the Commonwealth were very cautious in the incentives packages that were offered to Amazon, said Gerald L. Gordon, Ph.D., president and CEO of the Economic Development Authority in Fairfax County.

“The clear conclusion was that, over time, the returns in terms of tax base would more than offset the offering,” Gordon said. “Those discussions were based on assumptions about the increased demand for public education and other public services versus the returns to the tax base.

The Commonwealth of Virginia will benefit in terms of income tax generation because of the much higher-than-average income levels that Amazon will pay. Localities do not collect income tax in Virginia.

But, “local governments will benefit from the increases in the real estate tax base and taxes on the business’ equipment,” Gordon said. “Historically, companies have contributed far more to the tax base than they take in the form of public services and that helps to reduce the tax burden for residents.”

I personally will resist the “rebranding” of Crystal City to “National Landing.” It’s still National Airport, and it’s still Crystal City.

— Mary Kimm