Amazon HQ Speculation in Full Boil

JBG Smith stock price. Source: Yahoo Finance.

Northern Virginia is solidifying its position as the perceived front runner in the competition for Amazon’s massive HQ2 project, and Arlington’s Crystal City area looks like the front runner in Northern Virginia. The Washington Post reports that Amazon’s talks with the Seattle-based tech giant have been more detailed than discussions with other leading prospects.

“Crystal City, with easy transit access, proximity to Reagan National Airport, and ready-to-occupy office buildings, has been considered a strong contender,” writes the Post. Speculation has gotten so intense, according to stock analysts, that investors have added for or five points to the stock price of JBG Smith, owner of most Crystal City property.

I have to say, this is getting exciting. Amazon HQ2, which would entail investing $5 billion over the next 15 years and creating 50,000 jobs, would be a game changer for Northern Virginia. Not only would Amazon’s presence diversify NoVa’s economy away from the federal government, it would transform the region’s corporate culture from Beltway Bandit procurement to a more global, entrepreneurial approach. No region will supplant Silicon Valley as a technology hub, but the Washington region could become America’s undisputed No. 2.

If Amazon is looking at NoVa, thenwe should expect to hear something soon. The deal likely will be contingent upon tax breaks, higher-ed funding, and infrastructure commitments that require approval of the General Assembly. The legislature convenes Jan. 9. The Northam administration surely will have its legislative package lined up on Day One to provide ample time for public airing and debate.

Update: Amazon has decided to split HQ2 between two cities, the Wall Street Journal reports. Creating HQ2 and HQ3, with about 25,000 employees each, will ease the challenge of recruiting workforce, a source told the Journal. Moreover, the move will also ease potential issues with housing, transit and other areas where adding tens of thousands of workers could cause problems.

That’s all positive for Virginia, as far as I’m concerned. It doubles the odds of getting one of the two prizes, and the project will be easier to absorb from a growth-management perspective. I ave long feared that a 50,000-person facility would be indigestible, even for a metro region as big as Washington.

The big question now: Does Amazon get the same incentive package for a half-sized project as it would for the whole enchilada? Bezos better not get greedy. He’s already the world’s richest man. He could inspire quite a backlash if he demands too much.

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29 responses to “Amazon HQ Speculation in Full Boil

  1. A couple of comments. One, should Amazon establish HQ2 in Virginia, the amount of crony capitalism will only increase. Two, the inherent weakness of the Tysons concept is made clear by Amazon’s long-standing rejection of Tysons for HQ2. Maybe Bezos has seen the increased traffic congestion caused by the world’s biggest attempt to transform a suburban office park to an urban, transit-oriented development.

    • Of course crony capitalism will increase. This is Virginia after all.

      As far as rejecting Tysons … Amazon rejected thousands of places including Tysons. Ten to fifteen years ago Crystal City was in far worse shape than Tysons. The only three differences between Crystal City and Tysons are …

      1. Crystal City has a rather clever set of underground pedestrian passageways that allow people to go from one building to another without crossing streets.

      2. Crystal City has been at its transformation for 10 years longer than Tysons.

      3. Crystal City was an original Metro beneficiary and has developed the kind of density over decades that Tysons needs to develop.

      Beyond that … about 20,000 people live in Crystal City, about 60,000 work there on any given workday. If you suspend your disbelief I guess you can imagine another 50,000 people working there. However, imagining another 50,000 living there would require hallucinatory assistance. So, where will all these people live? Arlington Cemetery? Tysons ought to be figuring out how to make commuting from Tysons to Crystal City and back convenient. Oh but wait … in the backwards Commonwealth of Virginia Tysons isn’t really anything but an unincorporated part of a large county. And that county has very limited power outside of the Imperial Association of Nanny Clowns in Richmond. Oh dear.

      • re: the imperial clown show

        A good number of them are from back and beyond and have no clue how places like Arlington “work” except a healthy Arlington/NoVa keeps the money rolling in to subsidize RoVa!

        But why can’t Alexandria and points south like Groveton be “gentrified” for Amazon workers?

        • Alexandria is pretty gentrified already. “Groveton” would love to have Amazon employees but there would need to be some way to get from the Rt 1 corridor to the closest Metro stops since hacking up either Rt 1 or the GW Parkway into Crystal City every morning in a car would be a zoo.

  2. The Micron deal was just an appetizer. This is going to be very interesting….. I stand by what I said months and months ago: This will fully transform politics in Virginia.

    • I certainly hope so because politics in Virginia is a backwards disaster right now. But … how so?

      I personally like the idea of Alexandria, Arlington and inner Fairfax County (including Tysons) becoming a city with a strong city charter.

      • If there was a change, McLean residents would want to be a separate city. We don’t always like the decisions Fairfax County makes for us, especially in terms of land use, school funding, parks and traffic. Why would we want to gain “independence” and then give it right back to Arlington, Alexandria and other parts of inner Fairfax County?

        And the supervisors are expecting Tysons to produce more revenue than it takes in services someday. They would never vote to let Tysons leave the County. And today and probably for the foreseeable future, Tysons is being subsidized by the rest of the County. It cannot stand on its two legs yet.

        I stand by my remark that the arrival of Amazon will goose up crony capitalism.

        • McLean isn’t big enough to be a real city. The best it could be is a town. Meanwhile, being part of a city that includes Tysons would give McLean residents a voice on the city council regarding what was planned for Tysons. It would be a lot easier to be heard in the City of New Alexandria than the County of Fairfax.

          As far as the Fairfax County Board of Supervisors … I’m not sure they matter. You’re the lawyer but here’s what I read …

          http://www.senate.ga.gov/committees/Documents/CarlVinsonSummaryMunicipalIncorporationProceduresbyState.pdf

          • Totally unacceptable. Any referendum that included joining other parts of NoVA in a city would fail big time in McLean. We’ve got 60,000 residents more or less. That’s enough for self-governance. The goal is to reduce the pocket-picking and to control our own land use decisions not be a part of some bigger entity that really doesn’t achieve anything for McLean residents.

            Besides Fairfax County would never consent to any split-offs from the county. It wants the tax dollars. And Fairfax County officials do not want to become a city. They don’t want responsibility for the local roads.

        • “I stand by my remark that the arrival of Amazon will goose up crony capitalism.”

          Already happening. Look at that stock chart. How many stocks do you know that suddenly started trending up in Mid October?

  3. I think no matter where Amazon locates, there is going to be increased traffic and congestion in part because Arlington is a pretty pricey real-estate that’s not going to be affordable for younger workers and any cross-flow of government workers is going to just bring folks who are already commuting to the exurbs.

    And I think it’s a bit of a myth that Millennials and GenX are primarily live, work and play on one place types. They like activity – yes – walking, biking, and other human-powered activities but they also are quite mobile with conventional autos also even as they love Uber also.

    People of all ages love their cars and today – their cell phones. It’s all about being mobile – not anchored to one place.

  4. I-495 between the American Legion Bridge into Maryland and Tyson’s Corner, Va. has been called the most congested roadway in America, and rightly so.

    On a much larger scale, however, the strip of shoreline running for a few miles from Alexandria City to Rosslyn, Virginia at the mouth of the Potomac Gorge, is likely the most congested, fragile and important transport corridor of riverside commuter access between a state and a city in the entire United States.

    Within this narrow and highly confined strip of land one encounters, in addition to Alexandria City, traffic in and out of:

    Crystal City – with some 76,000 daytime residents,
    Reagan Airport – serving last year 23.9 million travelers annually,
    Pentagon – world’s largest office building, with 6.5 Million sq ft, and
    Rosslyn City – with 8.5 Million sq ft office, 6,700 housing units. Just behind Rosslyn is the entire Ballston Rosslyn Corridor, Arlington County’s new downtown.

    Plus no less than 6 major Interstates or regional commuter arteries into and out of Washington DC and serving other regional urban areas pass through this strip and over its many bridges across the Potomac.

    So, for example, the great majority of all of Northern Virginia’s daily commuter traffic in and out of downtown Washington DC pass over the four bridges within this narrow and confined strip of land – namely the 14st Street Bridge, Memorial Bridge, Roosevelt Bridge, and Key Bridge, in addition to the ancillary Woodrow Wilson Bridge traffic on the far east end of Alexandria City.

    How this might it be possible to locate Amazon’s huge new 2nd HQ in Crystal City here in this already congested spot along the Potomac River, with more Amazon employees than in the Pentagon a mile down the road? Not too mention, the housing for those new employees, and all the additional businesses and workers that such a 2nd HQ’s may attract?

    At first glance, this seems an impossible choice, and a mad one, too.

    On closer inspection, however, it seems to me a wonderful choice for all concerned. A choice that holds the potential to change the face of the entire Washington DC region for the better. One that could solve far more problems in the region that it might generate in the short term. Indeed this could be a truly inspired choice igniting a new era in DC, should Amazon decide to locate there in Crystal City and Potomac Yard. I hope it happens.

    • Caution – this “rumor” easily could be false, an intentional red herring to make a better deal elsewhere. Anything is possible. But surely the final choice is made in at least one person’s head, the only head that counts in the final choice. So things elsewhere, including just across the river in DC, are quite possible too. I say that knowing nothing about what’s really going on.

      • Mrs Bezos didn’t raise any fools. Put out a rumor or two to get the municipalities reaching back for another go at their wallets.

        • Yeah, one last shakedown and squeeze, before final big picture deal outline push. Plus I thought the warning by the site director after the leak was a big odd, and contrived.

    • You’re right on all counts. It is nearly impossible. However, density cures dysfunction. Most people don’t drive to work in Manhattan because you can’t afford the tolls, the congestion or the parking. This forces the reality of an elaborate mass transit system on NYC.

      • Yes, this puts Mr. Bezos in Catbird seat.

        Imagine, he has now jumped right to the front of the line, looking across at the most powerful city in the world, while he sits next to Ronald Reagan Airport and the most powerful contractor and military force in the world at the Pentagon. All that gridlock into the Nations Capital is now firmly and forever behind Amazon, in the rear forever.

        Plus on his side to the east he can build his own smart growth smart town at Potomac Yards, big mixed uses for employees, subcontractors, military, and others. And he also sits next to the historic old town of Alexandria, plus Mt Vernon, and Belle Haven, and Episcopal high school (The High School) and St. Stevens.

        Plus on the other side, to this west, he’s got the ultra hip Ballston – Rosslyn corridor and more great residential up the river over the gorge, plus he’s got great rehab and upgrade opportunities throughout Arlington County, a small jurisdiction he can control and get things done. This control is critical, no more dysfunctional Northern Va. to fool with.

        Thus there are ancillary commercial opportunities throughout Alexandria City, Arlington and northern Fairfax if Fairfax can get its act together, including residential and rehab up Shirley Highway, and Groveton and Hybla Valley.

        Most importantly, this will flip Northern Virginia right side up, put Fairfax County in its proper places, so it can get over its big boy complex, and do things the way they should have been done the first time around.

        Finally, Mr. Bezos rejoins DC to Virginia shore via Potomac River, like commuter air boats and other waterworks, fulfilling George Washington’s dream, bringing his city functionally back together in a practical way, the way George had planned. Imagine a job fit for the most successful guy in the world today, Mr. Bezos, only he can pull off. How can he refuse?

  5. Late breaking news … WSJ reports that Amazon will split its new HQ between 2 cities. Why stop playing one city off against another just because a decision has been made?

  6. Dear All,

    Metro will get everything it wants, probably without an internal reform.

    Sincerely,

    Andrew

    • I suspect that the two HQ2 strategy has a multitude of other advantages.

      For example, let us assume the Crystal City local is unique. Then downsizing it, to fully take advantage of its unique location, frees up the balance of the project so as to fit its secondary uses into far more practical location (s), whether it be one or more locations, at far less cost to Amazon, and fewer disruptions to existing communities. Thus, too, multiple locations for these secondary (non unique) uses may spin off a host of other advantages working in tandem, and provide far more flexibility of function and reach for Amazon. Perhaps, too, this was Amazon’s plan all along, or became obvious as the site location process exposed differing opportunities.

  7. djrippert – “Late breaking news … WSJ reports that Amazon will split its new HQ between 2 cities.”

    This would increase odds of a least half of deal going to Crystal City, as otherwise the primary political and functional concern of the Crystal City site would be how do we keep keep road access to DC open for long distance commuters from rest of Virginia.

    I believe this traffic obstacle can be overcome readily with smart growth strategies deployed at Potomac yard alone for Crystal City, and elsewhere. You build this new mixed use development in ways that eats existing traffic and reduces new traffic by greatly shortening commuter traffic within the existing shoreline strip.

    This new and existing traffic could also be significantly diluted by creative waterborne (even airborne) access across Potomac River and enhanced rail along the Virginia shore strip from Rosslyn to Alexandria, all of used for what now would be far more local traffic than long distance commute traffic. This same concept of replacing long distance commutes with local short distance commutes could also feed and revitalize other local nearby areas. Thus the whole area gets far more efficient and profitable uses with far less traffic. And everyone everywhere benefits cumulatively.

    • Should you want to read absolute nonsense on what is going on with Amazon deal read Axios Future fantasy by Steve LeVine, Nov. 05, 2018 titled “1 big thing: Amazon, a breakup threat, and HQ2.

      • Recall Ben Rhode’s Echo Chamber. How he could get echo chambers going within the mainstream media at will, any day of the week, to create a false reality wherein he could push a visi0n or policy objective of the president in any direction he wanted to it go to sell an desired political outcome?

        This of course is now a tool that most anyone can use, if it be skillfully deployed. Whether it be politicians, reporters, private interests, NGO’s, whatever. I experienced the new and growing force of these echo chambers built in minutes, or in a morning or evening or afternoon, within our society last night, as I tracked articles popping up hourly on the internet as I googled News “Amazon Crystal City.”

        Tracking the story that way, at around 9:18 p.m. last night, I came across a Business Insider story published 7 minutes earlier quoting the New York Times to say that Amazon had decided on Crystal City and Queens for its 2 HQ2, the split itself announced only hours old.” Perhaps I read that article wrong, but I read it twice, and I doubt I got it wrong.

        In any case, this morning around 7:15, I read the WSJ that reported a different story, so I hunted back for the original Business Insider story from last night. It had been replaced by a new story by the same publisher that was only four hours old, so published or corrected around 3.10 am this morning, and its text was substantially watered down from certainty I thought I had read the night before at 9:18 pm. At the same time, around 7:30 am this morning, a whole new group of stories suddenly. These opined that Crystal City and Queens were the front runners, and many of those new stories claimed those two locations had been front runners for several weeks.

        And, now, everyone too is talking about the threat of misinformation campaigns in the news. But misinformation seems always defined as any information that the judge of it then happens to disagree with. Only one this today is for certain. Today’s world of information and knowledge is far wilder, more volatile, and unreliable that ever before. It is a Caveat Emptor, buyer beware world we live in, with echo chambers everywhere.

  8. IT IS NOW OFFICIAL –

    AMAZON HAS CHOSEN ITS HQ2 SPIT BETWEEN:

    1/ CRYSTAL CITY, VA. AND
    2/ QUEENS, NEW YORK

  9. re: ” Update: Amazon has decided to split HQ2 between two cities, the Wall Street Journal reports. Creating HQ2 and HQ3, with about 25,000 employees each, will ease the challenge of recruiting workforce, a source told the Journal. Moreover, the move will also ease potential issues with housing, transit and other areas where adding tens of thousands of workers could cause problems.”

    I’m sure there are different viewpoints on the split but one of them is the fact that Amazon has apparently become convinced that NoVa and other places cannot “accommodate” that many new workers and help transform the locale into a bigger/better/more powerful walkable/transit-enabled “strong town”.

    The standard for this is incremental evolution primarily because development usually occurs in stages over time rather than a Tysons type approach.

    So it’s curious to me (and I might be agreeing with TMT) as to why they favor a smaller footprint already established location rather than one like Tysons which would strike me as a still evolving concept that would actually be accelerated with a project like Amazon.

    I’d be curious to hear from the Strong towns, Smart Growth folks on their take on Amazons choices. Not rationalizations that justify their choice but the pluses and minuses of Arlington verses Tysons and what tipped the scale on their choice.

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