AMZN Amazon.com Inc

By Scott Calvert 

Elected officials in Northern Virginia's Arlington County are expected to approve a hotly debated part of a $2.5 billion deal for Amazon.com Inc.'s second headquarters, but critics of the subsidies plan to seek a delay at a public meeting Saturday.

Virginia's legislature already has agreed the state will pay Amazon $550 million if the online giant creates 25,000 jobs with an average salary of at least $150,000 over 12 years. The state payments will rise to $750 million if the commonly called HQ2 grows to 37,850 workers in the Crystal City and Pentagon City business districts near Washington, D.C.

The Arlington County Board is expected to hear from more than a hundred residents about a smaller piece of the package: a projected $23 million payment to Amazon over 15 years from anticipated increases in a local hotel tax, provided the company fills a certain amount of office space. In addition, $28 million in property tax revenue would be used for public improvements around the new Amazon headquarters.

"Barring something crazy, I would expect we would be approving this on Saturday," said Erik Gutshall, one of five county board members, adding that he thinks the planned headquarters represents an overwhelming win for the county. Board Chairman Christian Dorsey also said he supports the measure and believes it will pass.

Amazon's smooth sailing in Virginia contrasts markedly with the company's experience in New York City, where it had also planned to open another headquarters with as many as 25,000 jobs. Last month, Amazon abandoned its $2.5 billion plan to build in New York's Long Island City because it said it was troubled by growing political opposition to the $3 billion in city and state tax incentives. The deal's detractors, including some state and city elected officials, called it corporate welfare and opposed Amazon's antiunion stance and resistance to organizing its employees.

Though Virginia incentives contain smaller cash payments than what New York offered and largely consist of transportation improvements and a new Virginia Tech campus, they still have vocal critics.

A coalition of activist groups called For Us, Not Amazon wants the Arlington board to slow down the approval process. Among their demands is for Amazon officials to answer questions at a public hearing that anyone can attend.

The board has invited Amazon to Saturday's meeting, and the company said its officials will attend.

"If this is something that is so great for Arlington, then taking the time to make sure nobody is left behind, and all of us can stay and live and thrive in this community, seems like a no-brainer," said For Us, Not Amazon organizer Angela Peoples.

Ms. Peoples and other critics object to giving tax dollars to one of the world's richest companies and disapprove of Amazon's contracts with the federal government. They also worry that a rise in housing costs spurred by the influx of Amazon workers will displace lower-income residents who aren't likely to land coveted Amazon jobs.

An Amazon spokeswoman said the company has met with many community leaders and residents in recent months, including businesses, nonprofits and civic associations. The company said its $2.5 billion investment would yield more than $3.2 billion in tax revenue, and that the 25,000 new jobs would help offset the 34,000 jobs the county has lost since 2003 due to the federal base realignment and closure process.

The company spokesperson said housing access is an issue around the U.S. and that Amazon was drawn to Northern Virginia in part because of plans by the state and county to address the issue. Amazon says its impact on the region will be "minimal" because it plans to hire locally and grow gradually.

Mr. Gutshall said he understands the concerns of critics, particularly on housing affordability. He said the county will have more money for these needs thanks to tax revenue that will be generated by Amazon's presence.

"There is no way I can get behind [the idea] that the way to solve those issues is to tell Amazon to take your good-paying jobs and go somewhere else," he said.

Mr. Dorsey, the board chairman, said Saturday's Amazon discussion will last hours, with anywhere from 100 to 400 people expected to take a turn at the microphone. The county has thoroughly studied the issue and carried out extensive community engagement, he said.

Carol Fuller, president of the Crystal City Civic Association, said she worries about HQ2's impact on housing costs, traffic congestion and school capacity. But she said those concerns are outweighed by the need to fill commercial vacancies and thus ease the tax burden on residents like her.

"We want them here," she said of Amazon. "We need to have the businesses coming back in here."

Write to Scott Calvert at scott.calvert@wsj.com

(END) Dow Jones Newswires

March 15, 2019 09:44 ET (13:44 GMT)

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