Amazon's New York Exit Not Expected To Change Plans For Northern Virginia Campus
Amazon shocked the business world Thursday when it backtracked on its plan for a 25,000-employee campus in New York City, but the plans for the other half of its HQ2 project appear to be unchanged.
Local officials in Arlington, where Amazon has committed to bring at least 25,000 jobs, say they have not received any indication that Thursday's announcement alters the plans for the National Landing campus.
"After speaking with an Amazon representative earlier today, we have confirmed that we are moving forward as planned with Amazon’s upcoming headquarters in Arlington — nothing has changed," Arlington County Board Chair Christian Dorsey said in a statement.
The question of whether Amazon will redistribute the 25,000 jobs planned for Long Island City to other locations remains unanswered. The company, in its statement Thursday, said it does not intend to reopen the HQ2 search, will proceed as planned in Northern Virginia and Nashville, and will continue to grow at its 17 offices in North America and Canada.
The Northern Virginia campus has the potential to receive thousands of the planned New York jobs. The financial incentive package Virginia passed earlier this month offers Amazon additional cash grants for another 12,850 jobs beyond the initial 25,000.
The submission Virginia made during the Amazon HQ2 competition had envisioned 50,000 jobs, the number Amazon had originally called for before splitting HQ2 in half, so the National Landing area should have the space to support thousands of additional employees.
Arlington County is planning to vote next month on its incentives agreement with Amazon, which is valued at about $23M over the next 15 years. County Board member Matt de Ferranti told ARLnow he is not expecting the level of community backlash that occurred in New York City, but he thinks the news could have some impact on next month's vote.
“Some things could change a little bit in our performance agreement with Amazon … and this is likely to contribute to some increased heat over the next six weeks,” de Ferranti told ARLnow. “I don’t want to underplay it, but we’re certainly not panicked by it.”
Investors appeared to believe Amazon's announcement provided new upside for the National Landing area. JBG Smith, the dominant landlord in the area that is leasing and selling space to Amazon, experienced a significant bump in its stock price after Thursday's news. The REIT ended Thursday trading at $40.53/share, representing a 1.43% increase on the day and its highest value ever. JBG Smith declined to comment.
Green Street Advisors analyst Daniel Ismail, who covers JBGS, said he thinks Thursday's announcement should be seen as good news for National Landing, and he thinks the JBG Smith value growth is appropriate.
"If you work under the assumption that Long Island City was going to have tens of thousands of new Amazon workers, and now those plans are canceled, I think it's a reasonable assumption they still plan on hiring a similar amount of people in their current locations and National Landing as well," Ismail said. "In light of a potential increase from Amazon in National Landing, you can make the assumption that [JBG Smith's] real estate is even more valuable."
Other jurisdictions in the D.C. region that lost out on the HQ2 competition see Amazon's New York City exit as a new opportunity. Maryland Gov. Larry Hogan said after the announcement Thursday he has had discussions with Amazon and is planning to meet with the company about moving into the state, WTOP reported.
Montgomery County Executive Mark Elrich told Bethesda Magazine the county's economic development corporation is reaching out to Amazon to express its interest. Prince George's County economic development head David Iannuci told the Washington Business Journal, following initial reports of Amazon reconsidering New York but before the official announcement, that county officials reached out to Amazon to engage in conversations.
