Incentives, Education Combine to Land Amazon in Northern Virginia

Nov 13, 2018

A combination of economic incentives and a major education investment by Virginia Tech helped land Amazon in Northern Virginia.

The online giant announced plans Tuesday to build part of its second headquarters in Arlington.  The move is expected to bring 25,000 high paying jobs over the next 20 years.

And while Northern Virginia may end up being the new headquarters, the benefits of that decision will be spread out across Virginia.

Virginia Gov. Ralph Northam speaks during a news conference in the Crystal City neighborhood in Arlington, Va., Tuesday, Nov. 13, 2018. Amazon, which has grown too big for its Seattle hometown, said it will split its much-anticipated second headquarters between New York and northern Virginia.
Credit (AP Photo/Susan Walsh)

Over the next 20 years, the project is expected to produce more than $3 billion in new revenue for Virginia — money that can be used for schools and roads.

Governor Ralph Northam says the incentive package, almost $600 million of taxpayer money, is worth it to create 25,000 new jobs. "Because these incentive payments will be provided only after qualifying jobs are created each year, the incentives will generate net positive revenue for Virginia from day one,” Northam said at Tuesday's announcement in Arlington.

Some are skeptical that the $600 million influenced the decision. Michael Farren at George Mason University says Amazon would have made the same decision without the incentive package.  And he adds  politicians always stand to benefit from ribbon-cuttings and groundbreakings. “They indicate to the voting public that they are doing something to make their communities better," Farren said. "But in reality, according to economics and economic research, all it’s doing is actually hampering economic growth if not actually holding economic growth back.”

The deal has not been finalized yet. The Arlington County Board is set vote on the zoning change in February.

The Tech Talent Pipeline

Another major enticement for Amazon was Virginia Tech's plan, also announced Tuesday, to build a new campus about two miles away in Alexandria.

From the very beginning of its expansion planning, Amazon  said  it wanted a steady pipeline of technology talent wherever it decided to locate its HQ2.

An artist's rendering of Virginia Tech's new Innovation Campus in Alexandria.
Credit Virginia Tech

Over the past four years, leaders at Virginia Tech have been planning a new technology-focused campus in Alexandria. That project, also announced Tuesday, was a big part of the state’s higher education pitch to Amazon.  "The Virginia Tech Innovation Campus in Alexandria will be a source of talent, research, partnerships discoveries and economic impact," university president Timothy Sands said Tuesday.  "This is the right vision, the right place, the right time and Virginia Tech is the right university to advance the Commonwealth as a global leader for the next generation."

Julia Ross, Dean of Engineering at Tech, says her students are ready for the task. “Our rigorous curriculum, our hands-on learning and industry engagement produces graduates who are poised for success," she said. "Amazon, Alexandria and Virginia Tech have developed a bold and exciting vision for the future. Virginia Tech engineering is ready to build it.”

The first students are expected to enroll at the new campus next year.

Radio IQ is a service of Virginia Tech.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.