Virginia won the Amazon HQ2 sweepstakes outright after all.
Amazon announced Thursday that it will not build a part of its new East Coast headquarters in New York because of political backlash from elected officials there.
That’s not a problem for the company in Virginia, where Gov. Ralph Northam already has signed into law an incentive package that will govern the creation of 25,000 high-paying jobs in Arlington County and sets the terms for an additional 12,850 jobs in a potential future phase.
Amazon said it will not reopen the search for another headquarters site, but instead focus on carrying out its plans for a $2.5 billion investment in Arlington and establishment of an East Coast operations center in Nashville, Tenn., that will create 5,000 jobs.
The company also said it “will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.”
“We’re very pleased that the East Coast headquarters will be in Virginia,” House Appropriations Chairman Chris Jones, R-Suffolk, said Thursday. “They’re most welcome in the commonwealth.”
That doesn’t mean Virginia or Arlington will woo Amazon for more jobs than already envisioned under the agreement reached on Nov. 14.
“We’re not asking Amazon to shift their planned investment in New York to us,” Arlington County Board of Supervisors Chairman Christian Dorsey said in a news conference Thursday afternoon.
“We’re not changing what we want from Amazon,” Dorsey said. “We’re not going to make a play for anything more.”
However, he added, “there’s a potential to get closer to [50,000 jobs] today than perhaps there was yesterday.”
Jones is a member of the legislative commission that vetted the incentive package the Northam administration offered for the initial $50 billion, 50,000-job HQ2 project, which Amazon announced it would split between Arlington’s Crystal City neighborhood and Long Island City in New York City’s Queens borough.
The company’s announcement Thursday contended that while most New Yorkers “support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”
In contrast, Amazon faced relatively little political opposition in Virginia, which negotiated a much more frugal incentive package than the nearly $3 billion in state and local incentives offered in New York. More than 60 percent of the state’s incentive package are investments in higher education throughout the state and transportation in Northern Virginia.
“We’re proud that the centerpiece of our partnership with Amazon will be making much needed investments in our tech talent pipeline and higher education, and there will be significant state and local investments in affordable housing and sustainable infrastructure,” Northam spokeswoman Alena Yarmosky said.
Northam already has signed one version of the legislation to carry out the state’s commitment, but the Senate approved a second bill, proposed by Jones, by a margin of 33-5, hours after the company announced plans to pull out of the New York deal.
Virginia is “the sole winner,” Senate Finance Co-Chairman Emmett Hanger, R-Augusta, told the Senate. “This is very good news for us.”
Virginia’s incentive package
The memorandum of understanding Amazon and Virginia reached in mid-November provides for $550 million in state payments for the creation of 25,000 jobs with an average annual salary of $150,000. The state won’t pay the company for the jobs until four years after they are created and begin to generate additional income tax revenue to pay for them. Arlington offered an additional $23 million in incentives.
The package and the law that Northam signed this month to carry it out do not include an additional $1.1 billion the state has promised over the next 20 years for public colleges and universities to generate up to 35,000 new bachelor’s and master’s degrees in computer science and related fields to feed the tech talent pipeline for Amazon and other technology companies settling in Virginia.
Virginia’s cash incentive package amounts to $22,000 per job — about one-third of the $63,000 per job promised to Micron Technologies for expansion of its semiconductor factory in Manassas and creation of 1,100 jobs there.
The agreement with Amazon provides for a potential second phase to create an additional 12,850 jobs — which would bring Virginia’s number of new Amazon jobs to about 75 percent of the original HQ2 plan — for $200 million in cash incentives, or $15,564 per job.
Those provisions are part of the law that the General Assembly passed this year by overwhelming margins, despite concerns expressed about corporate welfare, regional inequities and fears among some Northern Virginia legislators about the project’s effect on already scarce affordable housing options for Arlington residents.
Northern Virginia legislators also worry about traffic congestion, but the state’s agreement with Amazon includes $195 million in transportation improvements, including expansion of U.S. Route 1, improvements to two Metro stations and a pedestrian bridge to Reagan National Airport. The state has promised an additional $100 million for transportation if the company expands the project.
The money for the transportation improvements would come from funds already dedicated to Northern Virginia to relieve traffic congestion there, not from the statewide transportation trust fund.
Dorsey, chairman of the Arlington board, said mass transit improvements would relieve pressure on housing in Arlington by allowing employees to commute more easily from around the broader Washington region.
He also said the county is confident it can accommodate the jobs and office space required under the two-phased agreement because the project fits into a comprehensive plan and zoning map the county approved long ago.
“Even though we didn’t have Amazon in mind, we planned for the growth nearly a decade ago in the area they’re coming to,” Dorsey said.