‘Economic Spin-Off’: Amazon Expected to Buoy Employment, Businesses, Tax Base

‘Economic Spin-Off’: Amazon Expected to Buoy Employment, Businesses, Tax Base

The city is abuzz with the news of Amazon’s decision to locate a new headquarters in Arlington and Alexandria’s jointly rebranded National Landing neighborhood.

Arlington will get Amazon’s tax-generating offices. But Alexandria will rise with the economic tide of new jobs, a “tech talent pipeline” spurred largely by a new Virginia Tech campus, and state investment, city administrators say.

“This announcement is one of the best things that’s happened in Alexandria in decades,” said City Manager Mark Jinks. “The economic impact in Northern Virginia [of] high-paying, high-tech, highly educated jobs is terrific. … We’ll get the economic spin-off. And, probably most importantly, we got something we’ve been talking about for a long time, and that’s a higher ed campus located in the city, and one that’s going to focus on high-tech.”

Planners expect Amazon’s facility to create at least 25,000 direct jobs, as well as 22,000 “permanent indirect and induced jobs in Virginia,” according to a regional fiscal impact report.

Jinks expects new jobs will include “a wide range … at all levels,” though they’ll probably “skew to the high end,” in terms of skill and pay.

The city also hopes that Amazon’s decision will catalyze similar economic development in other areas of the city, like Eisenhower and the Landmark Mall.

“If there are companies who value what Amazon values, they should know that we have multiple sites that mimic those same characteristics,” said Stephanie Landrum, who heads up the Alexandria Economic Development Partnership, a city-funded nonprofit.

Virginia Tech plans to put a $1 billion “Innovation Campus” in the southern portion of the National Landing area, which spills over from Arlington into Alexandria’s Potomac Yard area. The graduate-level campus, which will start construction in 2020 and open in 2023, will act as a kind of feeder for Amazon, focusing on tech-related fields. Amazon will hire these graduates, but so will local companies who were hungry for tech talent anyway, according to Landrum.

Under state law, the university won’t pay property taxes in Alexandria. But, because Virginia Tech will only own and occupy some of the neighborhood’s planned new office space, Jinks expects the direct negative tax impact for the city will be “fairly minor.” Rather, here again, he expects a positive ripple effect.

Studies show that, while some new residents put children in the public school system and consume city services, “we still net out ahead,” he said. Plus, “people will come stay in our hotels; there will be businesses that will spin off of the research that is done at Virginia Tech. The community will benefit by that. We will see values — probably particularly townhouse and single-family home values — will go up.”

The state has also committed a variety of new resources to beef up supporting infrastructure. This will include $195 million state money for transportation-related projects, including a reinstated south entrance to the Potomac Yard Metro station and expansion of bus rapid transit along the Route 1 corridor. Helen McIlvaine, the city’s housing director, also expects an additional $15 million for affordable housing projects in Northern Virginia, via the Virginia Housing Development Authority, a state-sponsored not-for-profit.

Granted, “no gain like [this] is 100 percent positive. Our job … is to say, what issues does it create and how to we mitigate and how do we address those issues?” said Jinks.

He and other senior city administrators fielded residents’ questions and concerns through a online forum held Monday, Nov. 19:

What’d the city give up?

“The city is not giving any incentive to Amazon. Our incentive investment is in transportation projects and affordable housing,” said Landrum.

How will Amazon contribute to infrastructure development?

The company will pay property taxes on their offices in Arlington, and their employees will invariably pay property and consumer taxes, said Jinks.

What’s the expected impact with respect to traffic and schools?

“Are we prepared for development of this magnitude? The answer is, we are,” said Karl Moritz, the city’s planning and zoning director. “We had planned … not just that there’d be this amount of development and where, but what are the public facilities — roads, schools, parks and open space — that would be needed to support that growth. We had all of that prepared in our plans ahead of time.”

With respect to traffic, as many as 75 percent of people in National Landing are expected to move some way other than car, said Yon Lambert, the city’s director of transportation and environmental services.

“This is a very transit-centered employer,” he said.

With respect to public schools, young Virginia Tech graduate students aren’t expected to bring in as many children as would regular market rate housing, said Landrum.

The proximity may bring new partnership opportunities, such as internships, in connection with the school system’s planned expansion of high school capacity.

“Aspirationally, we would love for this site to be one of the only places in the country where you could go K through graduate school with a STEM focus,” said Landrum.

What about the housing market?

McIlvaine expects rents will increase by 4-6 percent, which isn’t far off the upward trend the city has seen in recent years. She noted Alexandria’s existing homebuyers assistance and pilot rental subsidy programs.

“While it’s appropriate to be concerned, I think collectively we have lots of new opportunities, including a recognition [from the governor] that housing affordability is very important” for Northern Virginia’s economic health, she said.

What happened in Seattle won’t happen here, because Northern Virginia and Washington, D.C. have planned an “enormous” amount of housing development along transit, which will “create more supply,” said Jinks.

How done is this deal, is there still time for public input?

Virginia Tech’s timeline leaves “plenty of time for us to go to the community in the next months to talk about the plans, to make sure that the community understands what’s being proposed, answer their questions, get their feedback, get their input,” said Moritz.

For more, visit www.alexandriava.gov/NationalLanding.