Amazon's second headquarters faces new blocks in Virginia funding vote

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Amazon.com Inc.'s plan to set up a second headquarters in northern Virginia, after being rebuffed in New York, will face its first test when local officials vote on Saturday on a proposed financial package worth an estimated 51 million U.S. dollars.

Amazon in November picked National Landing, a site jointly owned by Arlington County and the City of Alexandria, just outside of Washington, along with New York for its so-called HQ2 or second headquarters.

That followed a year-long search in which hundreds of municipalities, ranging from Newark, New Jersey, to Indianapolis, competed for the coveted tax-dollars and high-wage jobs the project promises.

Amazon in February abruptly scrapped plans to build part of its second headquarters in New York after opposition from local leaders, who were upset by incentives promised by state and city politicians.

While the opposition in Arlington is still nascent, the vote has become a political flashpoint between the project's supporters and activist opponents. It has given local activists the chance to push for a delay so that the county's proposal can be reviewed and debated further.

A five-member panel of the Arlington County Board will vote on whether Amazon will receive the estimated 51 million U.S. dollars, a fraction of the 481 million U.S. dollars promised by the county. Only 5 percent of the incentives are direct.

Amazon has also been offered a package of 750 million U.S. dollars by the state that the Virginia General Assembly approved with little opposition.

The scene at Saturday's vote is likely to be different. At least 100 members from local activist groups are expected to attend.

Protests are expected to begin at least an hour before the vote comes up for hearing at 1 p.m. EST, Reuters has learned from labor groups.

The 51 million U.S. dollars includes a controversial direct financial incentive or cash grant of 23 million U.S. dollars to Amazon over 15 years, which will be collected from taxes on Arlington hotel rooms. The grant is contingent upon Amazon occupying 6 million square feet of office space over the first 16 years.

Arlington has also offered to invest about 28 million U.S. dollars over 10 years of future property tax revenue in onsite infrastructure and open space at the headquarters site.

A filing on the county board's website says the 23 million U.S. dollars grant and the 28 million U.S. dollars in strategic public infrastructure investments were “instrumental in Amazon choosing Arlington for its headquarters.”

A county spokesman declined to comment.

Arlington County Chair Christian Dorsey has stated publicly he had “no interest” in postponing the vote, had heard no suggestions to do so from other board members, and expected the measure to pass.

Amazon's 25,000 new jobs will help offset the more than 34,000 jobs Arlington has lost since 2003 due to federal agency closures and other factors, and help diversify the local economy, company spokeswoman Jill Kerr said. “Our investment of 2.5 billion U.S. dollars will generate more than 3.2 billion U.S. dollars in tax revenue which can be used for public services.”

Activists from For Us, Not Amazon, a coalition of nine labor groups and grassroots organizations working in areas such as minority advocacy, are not convinced.

Roshan Abraham, an organizer from Our Revolution Arlington, a coalition member, said his group wants Amazon to engage with the community more, hold public hearings on the company's investments, address rising housing costs, displacement of low-income families near the proposed site and donate to affordable housing funds.

"What we are very concerned about is Amazon has met behind closed doors, at invitation events, but haven't met with the community in a public, accessible way," he said.

Amazon said it has met with many community leaders and residents, including local businesses, nonprofits, and community and civic associations and will continue to engage with them as it expands its presence in Arlington.

Source(s): Reuters