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Amazon’s HQ2 could have its drawbacks for Loudoun County

Amazon’s headquarters in Seattle. Courtesy Photo/Amazon.com
When Amazon announced its search for a second headquarters Sept. 7, the world seemingly changed for cities and counties across the country.

With the online retail giant’s $38 billion injection into Seattle’s economy since it consolidated its offices in the South Lake Union area of the city in 2010, the creation of 53,000 additional jobs as a result of the company’s direct investments and capital investment of $3.7 billion in buildings and infrastructure -- who wouldn’t want to land that kind of company?

The company’s growing footprint in Seattle has rapidly transformed the culture and landscape of the once barren industrial area of the city, which now rivals Silicon Valley.

Since Amazon’s HQ2 announcement, Loudoun’s Economic Development Department has been working around the clock on its application in hopes of landing “the deal of the decade.” An ad-hoc committee of the county’s top business leaders was formed to help in the pursuit.

But many in Seattle who have seen firsthand the impact of the company’s presence in city say the tech giant has been both a blessing and a curse.

Seattle is currently in the midst of a massive building boom, and since the tech giant’s arrival into the city, it has been grappling with rising rents and home prices.

The average property-tax bill throughout King County, which includes Seattle, has risen by 35 percent in the last four years amid climbing property values and tax hikes, the Seattle Times recently reported.

According to the paper, Amazon now has more office space in the city as the city’s next 40 biggest employers combined, and currently employs 40,000 people, up from 5,000 in 2010.

Meanwhile, two-thirds of buildings under construction in the city are residential towers -- the vast majority apartments for rent, the Seattle Times reported.

Despite a record number of apartments opening around the city, the paper pointed out that rents and housing prices have soared as more people move to Seattle for high-paying jobs. In the last six years, rents in Seattle have shot up by 57 percent.

“I think [the second headquarters] can be both a blessing and a curse,” said Matthew Streib, a spokesman for Seattle-based think tank Economic Opportunity Institute. “I think it requires a lot of resources on the city’s part and a lot of planning. I think that Amazon is shopping around for huge tax breaks, and that can be dangerous.”

Loudoun County says it plans to keep its application confidential and not subject to the Freedom of Information Act (FOIA). It has provided few details about what it’s game plan is to lure the company to Loudoun.

With its second headquarters, Amazon said it expects to invest more than $5 billion in construction and aims to create as many as 50,000 high-paying jobs in addition to “tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community.”

Although Loudoun County has made significant gains in growing its tax base and commercial investments, it continues to struggle with growing pains.

A housing report earlier this year found that by 2040 the county could face a housing gap of 18,000. Loudoun is also often criticized for its lack of affordable housing, something local leaders will address at a Housing Summit Oct. 16. Meanwhile, a vast majority of residents say traffic congestion and increased development are some of their top concerns.

Since Amazon consolidated in Seattle, from 2010 to 2016 the city’s population rose by more than 15 percent, according to the U.S. Census Bureau.

Matt van Winkle, the founder and CEO of Seattle-based real estate agency Remax, said any locality trying to land the second headquarters needs to be equipped with the housing and services Amazon’s employees will demand.

“There’s going to have to be the ability to create an enormous amount of housing and support, service, businesses and grocery stores and all the infrastructure there is to support that housing within a very close distance to wherever the campus is going to be,” he said. “I think it’s going to be a real challenge for anybody to be able to look at their infrastructure and say, ‘Yeah we can support the kind of growth that’s going to come in here and not have it cause problems.' Seattle is an example of that. We are really struggling from an infrastructure standpoint because of the growth.”

Loudoun County officials say they have already been planning to welcome a big company like Amazon, especially with the arrival of the region's Metro system in 2020.

“Our long-term planning has long anticipated large corporate users along our Metro, and that’s why we made the investment into Metro and road network. Anytime we look at economic development projects, we consider the impact as part of the decision,” said Buddy Rizer, the county’s director of Economic Development. “... I think as we sit here today, we absolutely are prepared for a major headquarters location.”

County leaders also say it is unlikely employees will need relocate from out of the region if Amazon were to come to Loudoun.

“This idea that we're going to import 50,000 new people is just not true,” Loudoun County Chairwoman Phyllis Randall (D) said. “50,000 jobs does not mean 50,000 people. It means pulling from the very educated, very able, very tech savvy population that already lives in Loudoun County, and in northern Virginia and the surrounding areas.”

Randall said she is not worried Amazon would cause some of the development headaches it did with its first headquarters in Seattle.

“I think Amazon could be nothing but a benefit to the area,” she said.

But Streib with the Economic Opportunity Institute in Seattle says the notion that the D.C. Metro region can supply the workforce needed for the company’s second headquarters is a pipedream.

“Amazon does bring a lot of jobs, but it will not bring a lot of jobs for people who already live in your community,” he said. “And while Amazon pays very high wages for tech people, the people who work in the cafeterias, the people who work as custodians -- those people aren’t making any more in their job as they would anywhere else.”

Van Winkle, of Remax, said most of his company’s real estate clients are either currently employed by Amazon or have worked for the company at some point in their careers. He noted that his Amazon customers often are not local and often relocate from other parts of the country to the company’s Seattle headquarters.

Longtime Loudoun resident and former Planning Commissioner Al Van Huyck thinks the greater Washington region could absorb Amazon’s 50,000 employees. But as one of the main architects of the county's current Comprehensive Plan, Van Huyck, who is also helping craft the new plan, cautioned that if Loudoun continues down a road of planning for “short-term business interests” it could harm the county’s suburban corridor.

“If we don’t watch it, we’re going to have all this new population from the Silver Line and the Metro and so forth … we can end up with absolutely ruining suburban Loudoun with traffic that you couldn’t believe,” he said. “... There’s no way to open up new corridors down there, and we could end up without proper planning just ruining eastern Loudoun as a quality of life place to live and we’re not studying that.”

As of now, Van Huyck says he does not know if he supports Loudoun’s bid for Amazon’s second headquarters because he does not know what the county is getting out of the bid.

“What’s the county going to offer?” he asked. “Because this could be a net loss for the county. If it does not contribute significant tax dollars and all it contributes is traffic, and problems and people and so forth, then what are we doing going after it? Until you see the proposal, we don't know.”

Localities must submit their applications for the Amazon second headquarters bid by Oct. 19.


See past coverage here:

-Report: Loudoun, Fairfax to offer state-owned CIT site to Amazon in joint HQ2 bid
-No gimmicks in play for Loudoun County as it tries to land Amazon’s HQ2
-Loudoun County creates ad hoc committee in hopes of landing Amazon’s HQ2
-Loudoun County, nearby jurisdictions hope to land Amazon’s ‘HQ2’


Contact the writer at .(JavaScript must be enabled to view this email address) or on Twitter at @SydneyKashiwagi.

Comments


Phyllis Randall states, “I think Amazon could be nothing but a benefit to the area”. Is the woman
a complete village idiot? While under other circumstances I can understand the need to keep quiet about what is being offered to lure Amazon to Loudoun Co. so competing area officials are kept in the dark, I believe doing so is an extremely egregious mistake with something that can have such a devastating impact on the county
if even some small detail in planning goes wrong.
The highway situation in the county is already a total disaster and will become far worse because it cannot be improved quickly enough to prevent a still larger disaster. Loudoun will be better off if Amazon goes elsewhere rather than compounds existing problems that county “leaders” can’t seem to resolve.


Dream on…the place has been decided and it ain’t LoCo….go ahead and drool…but it is not coming here…it is coming to….to….haha…I know! Dream on!


“at least there’ll be some new tax revenue”

@Loudounresident010 - there would be little or no tax revenue, as Amazon will demand massive tax cuts or subsidies to choose a location.

What we’d get is added traffic, housing and school demand, plus a drain on county and city resources.


Assuming that Amazon employees would want broadband internet access, which is not available in most of western Loudoun, than the county has no chance of being chosen, despite whatever tax breaks that they offer to give away.

This is good news, as Getting Amazon and it’s drain on housing, roads, schools, and other services would be a disaster.  Especially after having given the tax breaks that Amazon will demand.


I’m as anti-growth (new housing) as anyone on here.  But you have to realize that the housing is coming anyway whether you like it or not.  Tens of thousands of new units have already been approved by the BOS and are either already under construction of will be by this time next year.  Nothing can be done about that now.

But if NoVA can somehow defy the odds and land the new Amazon HQ then at least there’ll be some new tax revenue to help offset/justify some of the sprawl.  It would be a huge upgrade over the current situation.


This article adds nothing new to the conversation.  There is plenty of room for growth in the DC market – and hiring 50,000 people over time does not mean that 50,000 NEW need to move into the area.

And, the one thing DC has that no other city has – the COE already has a $25 million dollar home here.

The biggest draw though I think it DC has easy access to Europe – the next take over target.


Great article. The Board needs to shoo away the angel dust of excitement and realize that the Amazon project is a giant turkey that would ruin the county.Listen to the citizens who’ve made it very clear that they are against more growth, against more taxes and against more congestion.


The deal is done.  Amazon already knows where they are going and this charade is an effort to extort tax concessions and leverage government goodies.


“Loudoun County says it plans to keep its application confidential and not subject to the Freedom of Information Act (FOIA).”

That always makes me nervous.  What are the offering that they are afraid of the public knowing?

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