Amazon Wins Final Incentive Deal for HQ2 in Northern Virginia

(Bloomberg) -- Amazon.com Inc. won the last approval it was seeking for an incentive plan that helped lure the largest online retailer to Northern Virginia.

The five-member Arlington County Board on Saturday unanimously approved $23 million in incentives for the company to build a headquarters in the Crystal City neighborhood, just outside Washington, D.C. -- after six-and-a-half hours of testimony, protests and discussions by more than 100 people who argued for and against the deal.

The local government's carrot for Amazon, which is eventually expected to bring at least 25,000 jobs, comes in addition to a subsidy package of up to $750 million over 15 years signed by Virginia Governor Ralph Northam in February.

“The relatively modest incentives” that Arlington will provide are to create an environment for all residents to thrive, Chairman of the Board Christian Dorsey said.

The vote marked a victory for Amazon after it ran into intense opposition in New York, where the company had planned another headquarters location. Amazon dropped its expansion plans in the Long Island City neighborhood of Queens after it met resistance from local officials and residents who criticized the promised $3 billion in tax incentives and raised concerns about the impact on the already strained public transportation system.

‘Two Arlingtons'

Some activists sought to block the project in Arlington as well, saying the company doesn't need tax dollars. At the hearing, they also raised concern about Amazon's business practices and low-income residents being priced out of the county, chanting and holding signs of disapproval. But ultimately, opposition didn't emerge on the same scale as in New York and political leaders continued to back the deal.

“There are two Arlingtons,” said Helen Li, 25, who helps run an anti-Amazon Twitter account. “There are also renters and house owners who say they will be priced out when you have done nothing for affordable housing.”

Protests

Amazon sent three representatives to answer the board's questions but they left the room after consistent booing and outcry from the audience. Some Amazon opponents repeatedly interrupted board members, chanting “Shame! Shame! Shame!”

More than 200 cities across the country competed to lure the tech giant when it embarked on a year-long search for a so-called HQ2 that would bring 50,000 or more high-paying jobs.

While localities vied for Amazon's attention, activists organized against the company -- complaining about subsidies, and arguing its presence would increase housing costs and worsen congestion.

The company announced in mid-November it would split the headquarters between Northern Virginia and New York -- the location it later scrapped -- and add jobs in Nashville as well. In Arlington, Amazon plans to locate in properties controlled by JBG Smith.

Read more: Amazon Friction Rises in Virginia as Cuomo Woos Bezos Return

While the Arlington County incentives represented a small portion of the area's total subsidy package, opponents hoped to score a symbolic victory following Amazon's abrupt retreat from New York.

Worker Compensation

Arlington officials said the county's $23 million in incentives will be linked to Amazon meeting targets for office space occupancy. Funding would come from the local hotel occupancy tax. The board also agreed to spend an estimated $28 million on infrastructure improvements and open space around the Amazon buildings.

The state's plan provides the company with $22,000 for each new full-time job for the first 25,000 jobs. Then, the state would give the company $15,564 apiece for up to 12,850 additional jobs. Under the arrangement, the jobs must pay an annual average of $150,000.

“Even though this hearing has a sense of finality, this is not our last conversation on Amazon,” said Dorsey, the board's chairman.

--With assistance from Patrick Clark.

To contact the reporter on this story: Carlyann Edwards in Washington at cedwards136@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Justin Blum, Virginia Van Natta

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