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A man on a scooter along the 1900 block of Crystal Drive in Arlington, October 19, 2018. (Astrid Riecken for the Washington Post)
Jonathan O Connell
Reporter covering economic development with a focus on commercial real estate and Trump organization
Amazon.com has had in-depth discussions about the possibility of opening its second coveted head office in Crystal City, including the speed with which it would relocate its employees, the buildings it would occupy and the way it would be used. including an announcement on the move would be made to the public. , according to people close to the process.
The discussions were more detailed than the company has had on other sites in northern Virginia and other cities in the country, adding that the Arlington site is one of the pioneers of the second northern seat of the online retail giant and its 50,000 employees. jobs.
The company is about to make its choice as Crystal City's largest property developer, JBG Smith, has removed some of its properties from the rental market and local officials have explained how to make an announcement this month. mid-term elections, according to public and private sector officials who requested anonymity because Amazon requested that the selection process be kept confidential. The company could have similar discussions with other finalists.
The 1900 Crystal Drive building covered with a large, colorful tarpaulin in Arlington on October 19, 2018. (Astrid Riecken for the Washington Post)
Two people close to the process said that if Crystal City was selected, Amazon would likely move an initial group of several hundred employees in 1851 S. Bell Street or 1770 Crystal Drive, two dated office buildings that needed to be redeveloped by their owner JBG Smith is ready to work in nine months or less. The nomination also includes sites in Potomac Court, Alexandria.
"There are a lot of activities," said a person close to the process. The person added that people "look really positive and confident enough. . . What we do not know is maybe two or three other sites doing the same thing. That's what scares people here.
[[[[Bezos, an Amazon board is visiting Washington, but no announcement of the headquarters is planned.]
At a conference in New York on Thursday, Amazon's founder and CEO, Jeffrey P. Bezos, told the crowd, "In the end, the decision will be made with intuition after gathering and studied a lot of data – for a decision of this type, to my knowledge. The best way to do this is to collect as much data as possible. You immerse yourself in this data, but you make the decision with your heart. (Bezos also owns the Washington Post)
Spokespeople for Amazon and JBG Smith declined to comment, as did Arlington County Council Chair Katie Cristol (D).
Alexandria Mayor Allison Silberberg (D) declined to say whether any advanced discussions were underway, but said: "We believe we have put forward a very competitive option and we are certainly honored to be considered."
Virginia Gov. Ralph Northam (D), interviewed on WTOP radio on Wednesday, said of speculation that Crystal City would lead the group, saying: "Many of us are waiting impatiently for a decision, an announcement by # 39; Amazon. . . A lot of [Virginia government] resources are being spent right now, and I think for a good reason. "
A spokesman for Northam declined to comment further on Friday.
Excitement and anxiety
After launching a draw similar to a reality show for a second home at the end of 2017, Amazon has effectively stopped the disclosure of research information over the past nine months. Twenty finalist cities – many of which have spent a lot of time and money in search of the company – have little information about their current situation, according to officials from four other finalist jurisdictions.
But stock market investors, online betting sites, and business relocation experts all said that northern Virginia was the favorite to win the so-called HQ2.
Washington area leaders believe the project is losing and that Virginia, Maryland and the district would all benefit economically. Crystal City, with its easy access to public transportation, its proximity to the Reagan National Airport and its office buildings ready to be occupied, has long been considered a serious candidate. The district and Montgomery County are also among the 20 finalists.
[How can the D.C. region absorb an Amazon headquarters if it can’t cope now with gridlock and housing costs?]
Paris sites give Northern Virginia the best chance of reaching the project, and stock analysts have softened their vision of JBG Smith, owner of most of Crystal City, approaching the announcement Amazon. Stifel Nicolaus analysts have recently switched the company from "Sell" to "Hold" and claim that the possibility that Amazon chooses Crystal City has added four or five dollars to the stock price of the company.
Crystal City Metro Station. (Astrid Riecken for the Washington Post)
In the Washington area, anticipation grows as clues filter out the fact that Amazon is about to make a decision. According to people close to the process, the company had considered making an announcement before the end of October, but postponed it to November.
"They have stated publicly that they want QG2 to be operational in 2019," said one person. "They start working at this level of detail with the finalists. . . I think it's a very small number of finalists. . . [The announcement] requires some level of coordination and notice. "
Sharon Bulova (D), chair of the Fairfax County Board of Trustees in Virginia, where one of the sites is located, felt the mood.
"What I feel about residents is enthusiasm," she said. "They are excited about the jobs that Amazon would bring."
It's also anxiety. Months of waiting did not dispel worries about Amazon's potential pressure on already high housing prices, traffic congestion and the gaping gap between wealthy residents and low-income residents.
[[[[With Amazon's imminent decision, housing improvement is gaining ground.]
When Bezos spoke at an event organized by the Economic Club of Washington in September, more than a dozen protesters invaded the sidewalk and groups of citizens, sometimes joined by activists unionists, have voiced their concerns about the significance of creating such a dynamic business schools in the region, roads and housing prices.
Even without Amazon, the Metropolitan Washington Governing Council estimated that the region would need to add 235,000 dwellings by 2025 to keep pace with the expected growth in employment.
The arrival of Amazon could bring the target to around 267,000 by 2026, according to a recent analysis by the Urban Institute. At present, the region is about to add about 170,000 new units by then, and the shortage threatens to exacerbate inequality.
"Whether Amazon comes or not, we have a challenge," said Peter Tatian, Urban Institute. "The current economic growth is benefiting some people and causing problems to others."
Amazon says it plans to make $ 5 billion in capital investments in the city of its choice and that its headquarters has injected an additional $ 38 billion into Seattle's local economy, generating thus 1.40 additional dollars for every dollar spent by the company. But its growth has resulted in cracks between the company and Seattle.
Homelessness in the city has increased and Amazon has promised to cancel some of its expansion plans if the city adopts a new big business tax in order to raise funds to solve the problem. problem.
Little transparency of jurisdictions
Bezos and the company have made several recent announcements likely to soften the public image of Amazon when opening H2Q.
Bezos, who is now the richest in the world, announced in September that he would donate $ 2 billion of his own money to support homelessness groups in the United States and create a network of preschools in the United States. underserved communities.
"I do not think it's a coincidence that any of these problems was homeless," said Joe Parilla, a member of the Brookings Institution. "I think you can make a pretty clear link between the debate that's going on in a lot of these technology clusters and the way it gives Amazon a bit of coverage that invests in these fast-paced markets."
In October, after being criticized for months by Senator Bernie Sanders (I-Vt.) Regarding the treatment of workers, Amazon announced the raising of its minimum wage for all employees to $ 15 per hour.
But the company's demand for secrecy has kept a potentially thorny debate about how much states and cities should be willing to offer to society for its jobs in the background.
Few public subsidies to Amazon from states, cities and counties for the project have been made public, which some analysts believe could lead to a backlash by taxpayers if they were announced as a fait accompli. Maryland has offered a set of incentives worth an estimated $ 8.5 billion, while Newark's grants are estimated at $ 7 billion. On Wednesday, a judge in Allegheny County, Pennsylvania, ordered the release of Pittsburgh's proposal after a court clash with a local television channel. The decision should be the subject of an appeal.
"I was wondering why cities were not more open [with their proposals]and I guess it's because there would have been delays in the supply of cities, "said Heidi Learner, chief economist of consulting firm Savills Studley. "From the public's point of view, the question is, what is the city hiding or why not share the [those proposals] would actually lead to more tax revenue on the line? "
After Amazon initially asked for more information, some leaders were expecting the list of finalists to be publicly reduced to give the economic development teams of the eliminated cities a chance to move on. thing.
"I think the process escaped them a bit. They probably envisioned a kind of demotion and changed their position on it, "said Jason Miller, general manager of the Greater Washington Partnership, a group of companies.
In addition to tax breaks, some cities have proposed to build or expand roads, transit networks, data networks or airports in the event of Amazon's arrival. Parilla, of Brookings, said it was best to "maximize the benefits of these investments."
He also does not think it makes sense for Amazon, a $ 816 billion company, to insist on a city or state to get a huge grant program. likely to reduce expenses for other services.
"My feeling is that Amazon does not want to repeat some of Seattle's antagonisms," Parilla said. "It's not great that the brand is perceived as unaware of the economic and racial inequalities that exist in the city where it will invest."
The final decision will probably fall on Bezos. He has always demonstrated his independence in this area, for example when he needed a new headquarters for the Washington Post shortly after buying it.
The preferred choice of Post executives and consultants was a planned office building near Union Station, which they touted in Bezos during a tour of potential locations.
This site was the favorite – until Bezos intervened and chose a downtown building.
Now that Bezos is about to make a decision about much larger research in QG2, Washington region leaders are hoping it will not launch another curve.
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