It’s hard not to be pleased with Amazon’s announcement that Northern Virginia was chosen, along with New York, as home to the giant retailer’s second headquarters. It speaks well of the commonwealth that it was able to snare the most prized and publicized economic development contest in recent history — even if the greatest attraction might be Arlington County’s close proximity to the nation’s capital and all the political power that resides there.
Nevertheless, Amazon is one of the great success stories in the history of American business, and that it chose the commonwealth as one of the prime sites for its corporate operations is an unambiguous endorsement of the good quality of life and highly capable workforce in Northern Virginia. It also confirms the already excellent standing of the state’s system of higher education.
The announcement is an especially bright moment for Virginia Tech, which said that it plans to build a new $1 billion campus at the Amazon headquarters near Pentagon City and Crystal City. Tech’s participation ratifies its status as a premier institution for innovation and technology. Its leaders, faculty, alumni, and students should be proud. They have earned, once again, the admiration of all Virginians.
The state and the university are expected to contribute a combined $250 million toward building the new campus, including some funds from private philanthropy, industry partners, and new revenue streams.
Overall, the state expects to spend about $1.85 billion over 20 years in connection with the Amazon headquarters, including direct incentives, investment in transportation infrastructure, and money associated with expanded higher education facilities and programs. Presumably, some of that spending will directly benefit individual Virginians as well as the giant corporation, which boasts a market value of about $800 billion.
The projected return on this state investment is 25,000 high-paying jobs at Amazon and $2.5 billion in capital investment over 20 years. And of course the indirect benefits, both financial and reputational, could be enormous. State officials are projecting a $3.2 billion return for Virginia in the next two decades, a number that is quite plausible but also far from certain.
This all sounds very good — and it probably is. Amazon is an enormous, brilliantly run operation and its second headquarters was highly coveted by virtually every state in the union. Today, Virginians should be excited about the potential benefits for the commonwealth. But the state is making significant pledges to a private enterprise that — for all its success — is nevertheless an entity whose purpose is not to enrich the people of Virginia but to increase profits and whose continued growth is not guaranteed. With those caveats in mind, this week’s news is cause for celebration. There will soon be time enough to parse the numbers.