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Date: January 2, 2019

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Before Amazon breaks ground, Virginia needs transparency around HQ2

Virginia has no reason to trust Amazon’s super-sized HQ2 promises. There needs to be an independent community impact report on what HQ2 will mean for Crystal City.

Robert B. Engel
Richmond Times-Dispatch
December 26, 2018

You don’t have to be an economist to realize that Virginia got played by Amazon in the closed-door HQ2 negotiations, but these numbers show just how terrible the deal really is: The total incentive package offered to Amazon could have been used to reduce the state corporate tax rates for all Virginia businesses by 5.6 percent over the next 15 years. That should have every Virginia business owner and their employees fuming — and it should have every Virginian taking a much closer look at this raw deal.

The fact that a $1 trillion company is asking Virginia to cough up nearly $1 billion in taxpayer incentives that could be used to help local small businesses speaks volumes about the company’s motives with HQ2.

Amazon does not care about being a part of the community or paying its fair share; it cares about being closer to D.C. and the Pentagon so it can double-down on its influence-peddling in the corridors of power.

That’s why Virginia has no reason to trust Amazon’s super-sized HQ2 promises. There needs to be an independent community impact report on what HQ2 will mean for Crystal City. It must, at a minimum, clearly lay out how HQ2 will affect jobs, rent, Metro crowding, and education funding.

Amazon originally promised 50,000 jobs to HQ2’s home city, but walked that back in an 11th hour decision to split the headquarters between two cities.

Now Amazon says Crystal City will get 25,000 jobs, but it is unclear if all of these positions will be filled with local talent or if Amazon will bus in talent from Seattle and other tech hubs. Amazon must provide clarity on these questions, and analysts must crunch the numbers to find out exactly what the headquarters will mean for the local economy.

Housing affordability is another issue that must be front and center, especially with “the Amazon effect” already disrupting the real estate market. It’s plain to see that longtime residents, who made Northern Virginia and the surrounding areas what they are today, are going to be displaced in droves. Families and young professionals who cannot afford a sudden rent hike have a right to know how much prices are likely to increase, and small businesses in the area need to know that they will be able to keep the lights on and the doors open.

Workers who depend on public transit to get to and from work should have assurances that the Metro will not be brought to its knees by Amazon’s move.

The Metro is already in disrepair and the three lines going to and from Virginia and D.C. are hopelessly bottlenecked. With riders routinely facing long delays and even complete shutdowns, there should be a clear-eyed evaluation of what repairs or improvements need to be made in preparation — and perhaps Amazon should cough up some money to support the fixes.

Speaking of limited funds, will the nearly $1 billion in tax incentives going to Amazon for its headquarters in Northern Virginia stymie critical investment in public schools? In Arlington, schools are struggling as it is with overcrowding and budget shortfalls. It is quite frankly outrageous that lawmakers somehow found enough money for Amazon’s sweetheart deal but they cannot find the funds to improve the public education system. And for context, the total incentive package offered to Amazon could have been used to give 2,700 students a full tuition scholarship to U.Va.

Virginians ought to be very concerned about how HQ2 will impact the community and surrounding areas, and they should be very skeptical about Amazon’s hidden, self-serving motives to move into Crystal City. The stakes are far too high to trudge along with blind faith that HQ2 will not be an absolute nightmare for Northern Virginia. If there is a devil lurking in the details — and it sure seems like there is a lot that has been hidden, and more to hide — then Virginians have a right to know about it before their pockets are emptied to one of the richest companies on the planet.

Robert B. Engel is chief spokesperson for the Free & Fair Markets Initiative, a nonprofit coalition that supports a fair marketplace for small businesses and local communities. Contact him at bob.engel@freeandfairmarketsinitiative.org.

To access the entire op-ed, click here.

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