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Arlington County authorizes $23M in Amazon incentives

The money will come from hotel taxes, provided that the company meets occupancy targets

Alyssa Nassner

Update, March 17:

The Arlington County Board on Saturday green-lighted $23 million in performance-based cash grants and other benefits for Amazon, which is now set to hire workers for its planned campus in Crystal City. The vote came after hours of testimony by more than 100 people as well as sometimes-raucous public protests that drew both supporters and critics of Amazon.

“Our vote today reflects our strong belief that Amazon will bring significant benefits to our community, to neighboring Alexandria, the region and the state,” said Christian Dorsey, the chair of the board, in a statement. Dorsey added that “only 5 percent” of the incentives, tied to future hotel tax revenue, will be paid directly to Amazon; the rest will go to infrastructure.

The board voted unanimously to approve the incentives package, which involves siphoning $28 million in additional revenue from a pre-existing tax increment financing (TIF) area to infrastructure projects, over a decade. The direct grants will be doled out to Amazon over 15 years. In 2019, Amazon is expected to hire about 400 employees for its Crystal City campus.

Original post, March 6:

After Virginia’s state government approved up to $750 million in job-based incentives for Amazon earlier in 2019, the Arlington County Board is set to advance a much smaller but significant package for the tech behemoth on March 16. The county released a draft of its incentives agreement with Amazon on Tuesday that is valued at $23 million over 15 years.

Arlington’s offer—to be disbursed through annual grants tied to anticipated growth in the county’s “transient occupancy,” or hotel, tax—is predicated on how much office space the company ends up occupying in Crystal City. The first benchmark, of 64,000 square feet of total office space, is poised for mid-2020, and the ensuing targets ratchet up to more than 6 million square feet of total office space by mid-2035. Amazon must reach 90 percent of each annual target to get the full grant amounts, equal to 15 percent of the increase in hotel taxes.

Office occupancy targets in Arlington’s proposed incentives agreement with Amazon
Arlington County government

As the Washington Post first reported on Tuesday, the proposed agreement would set aside much of the rest of the revenue growth from hotel taxes for infrastructure “serving, or in the vicinity of,” Amazon’s Crystal City site. But the agreement would also require county officials to provide the company at least two business days’ notice of any public-records requests in regards to the information Amazon has shared with the Arlington and Virginia governments.

The reason? “[T]o allow Amazon to take such steps as it deems appropriate with regard to the required disclosure of records and [also to] disclose only such records as are subject to mandatory disclosure under VaFOIA [Virginia’s Freedom of Information Act law] or other applicable law or regulation,” the proposed agreement spells out. The potentially disclosable information includes the number of jobs Amazons produces, incentive disbursements, and tax data. The agreement sets terms for any legal conflicts between Amazon and officials, too.

As the Post and critics additionally pointed out, the agreement does not require Amazon to contribute to affordable housing goals or see to it that construction workers who build out its site get living wages. “Conversations about things we think are appropriate...will be ongoing” outside the agreement, Arlington County Board Chair Christian Dorsey told the newspaper.