Readying to welcome Amazon’s HQ2

With Amazon’s HQ on its way to the D.C. region, the whole area is abuzz doing the work to be ready for it. To learn more about what Arlington is doing to prepare, we spoke with Alex Iams, interim director of Arlington Economic Development.

ABERMAN: What’s been the biggest change that Amazon’s brought so far to Arlington, and to the community more broadly?

IAMS: Well clearly, our presence and profile in the media locally, regionally, nationally has never been this high, and putting Arlington on the map through a project like Amazon would really never be the same again, in the way that we’re viewed as a business community, and a place to do business. It’s also validated our approach to our planning processes, and the infrastructure that we’ve developed over the past decades, really, and the planning that we’ve put in place for the infrastructure that will be built over the next 10 to 12 years. And now, having kind of an end user to build out these systems, and actually help us augment, through some of the investments that the state will be making in the area that Amazon will be located.

ABERMAN: So many people were excited, not excited, interested, disinterested about Amazon coming here, but don’t really quite understand the inside baseball aspects of it, that it never would have happened without a lot of policymakers, and private and public partners greasing the skids a lot of ways. Is that what you’re getting at?

IAMS: Yeah. It really was the perfect storm, or a confluence of events and factors that came together to make this possible. And some of them are actually negative, as far as that as they were considered at the time, the Base Realignment and Closure of 2005, sequestration to follow that, the loss of 17,000 jobs of federal employees and contractors leaving the immediate Crystal City and Pentagon City area, and then another several thousand federal employees across the county who left for various reasons, as the federal government sort of reorganized its deck. And we, at the same time, were doing new land use, planning and planning for infrastructure investments in the area for whatever the future may hold. And when it came time for the Amazon recruitment, we kind of had everything all teed up.

ABERMAN: We’ve all been very struck, if we watch this carefully, how different New York responded to HQ2 versus Arlington and the broader community. What do you think explains that difference?

IAMS: I think one of the things is that, we were very proactive in getting our messaging about the planning that had been done in Arlington already, and the legacy of planning that’s occurred in Arlington over the past 40 years. In other words, we kind of know what we’re doing in the area of planning for growth and development. We’ve clustered around Metro stations, we’ve planned for the appropriate capacities, and the types and the ways that people will get to work, and you know, really held the compact between the greener and more suburban areas of Arlington, and the commercial areas of Arlington.

And this is just the next generation of that type of development in Crystal City. We have an entirely new land use plan that looks out 40 years for the future growth of Crystal City, which was thoroughly vetted with the community over a four year process from 2006 to 2010. So, we did a campaign to sort of refresh everyone’s memory about how much planning had been done, and how much investment we intended to make to make this possible.

ABERMAN: I was kidding around a little bit, but it is very much an inside-the-engine-room kind of job. And done well, the economy grows, done badly, the economy doesn’t grow. So, it’s intensely creative to me. What prompted you to choose this as a career path, versus staying working in a company, or starting a hot dog stand, or getting involved in an NGO? What is it that drives you?

IAMS: That’s a great question, because I actually started my career in city planning, and when I came to Arlington, it was at the precipice of all of this activity, a lot of uncertainty. The Base Realignment Closure announcement had been made, but no formal plans had been put in place for what we’re going to do about it. And so that was kind of the pitch to me, as a city planner, to come in to an economic development department, and figure out: how would the next generation of growth and development in Crystal City be feasible? What would be the appropriate use mix? How much tax revenue would be generated from that growth and development? What types of transportation systems would you need to support that? What does a complete community look like in Crystal City? And how can I turn that down?

So I started off on that path, did a number of the analyses that kind of teed up what this would look like. And we built out the illustrative plan, vetted it with the community, ultimately had it approved by the county board in 2010, and then we kind of got into this next paradigm, which my career turned on as well, which was: Well, we have all these plans for the future, but our present is rapidly increasing office vacancy rates in existing buildings, lack of the types of anchor tenants needed to justify new construction, or especially new construction of a building that would be replacing an antiquated building. And we, all of a sudden, found ourselves bailing water very quickly. And digging out of this hole that the vacancy rate had put us in.

And so, I started to meld together my knowledge and experience on the planning infrastructure side with the business investment and development side, and then those two things actually came back together in the end, where we were recruiting on the basis of the planning and infrastructure investments that were made for Crystal City. So, it really did come full circle for me. I couldn’t be happier.

ABERMAN: Has anybody ever told you you’re an entrepreneur?

IAMS: No, they haven’t.

ABERMAN: You seem to have all the characteristics of an entrepreneur. You could easily be talking about the passion you have around starting a new business. Have you thought about yourself that way?.

IAMS: No, I haven’t. I have thought about myself as very versatile and adaptable to the changing conditions around me. One of the reasons that I’ve been with AED so long, 13 years, is that no two days are the same. And there may be just different seasons that we’re working in, we may be in winter, or maybe in spring, you know, or we may be getting into summer. It’s the variety of the job, and then my ability to sort of adapt my skill set to the changing conditions, is really what has sustained me, and kept me excited coming to work every day.

ABERMAN: And as you’ve done your job, and worked through this, there’s also been some significant equity and political challenges to deal with. You know, I’ve heard and read, and I’m sure you’ve heard this a lot. People said, well, the economic incentives we’re giving Amazon and Jeff Bezos, well, he would have come anyway. Or, Arlington needs to do more to address housing and so forth. How does this dovetail into your role leading economic development?

IAMS: I think the character and evolution of incentives has been that every incentive needs to be better than the last. And in this case, we really were leading with those investments in community that we would make that would benefit everyone who is here and uses our systems, or benefits from the revenue that’s generated every day in Arlington. The state did the same thing, leading with their investments in higher education and transportation and affordable housing. We also made commitments to affordable housing with the city of Alexandria. So, it really was a comprehensive package of incentives that was cognizant of the social equity, logistical challenges with incorporating a new major user.

ABERMAN: I think the fundamental difference between the Virginia bid and the New York bid, the New York bid was all about here’s a bunch of money to create jobs. The Virginia bid was, we’ll give some money to create jobs, but we’re also going to invest in infrastructure, Metro, and housing, as you say. How did this happen? Did somebody wake up one day and say equity? Or is it ingrained in the planning process in Arlington?

IAMS: I mean to be really candid, when we got into this process, and we felt like we were a true competitor in the race, a lot of other jurisdictions around the country started to make their bids public, and they were coming out with hundreds of millions of dollars or billions of dollars in bids or incentive-like proposals. And what we thought was, well, we make investments of that magnitude all the time, and this will also benefit Amazon.

And so, actually, that was the first thing that we thought of. Let’s lead and tell them the story of how much we are going to invest in transportation with them, let’s lead and tell them how much we as a community emphasize affordable housing, and the investments that we would have teed up with their presence in this community. So, it almost came more naturally to us, where you know, we didn’t have to disappear into a room and come up with some several hundred million dollar incentive package, we didn’t do that at all. It was actually, the financial piece of our incentive was the very last thing that we did.

ABERMAN: What’s next? Is it to try to get more anchor companies, or to invest more in the startup ecosystem? What does the next couple of years look like for you guys?

IAMS: Recruitment for talent is now a global competition, and this region is now getting a leg up with the investments that will be made at Virginia Tech, at George Mason, with their digital center for innovation, with the programs that you’re involved in at Marymount University right across the way from us. And so, the more that we can set ourselves up for success and talent attraction and production, I think the better off will be for all of our employers. The other thing is finding ways to continue to diversify our economy. We will continue to be out there, and doing strategic lead generation, getting in front of companies who might be interested in a new East Coast location, or an expansion to the east coast, and really being able to be quite nimble and surgical about that.

It’s not that we didn’t operate that way before, but we had to make a big splash over the past four or five years to put Arlington on the map, and kind of get out in the middle of that river to get noticed. Now people know who we are, or at least they know the building blocks, and the fundamentals of who we are. And we can get in front of those companies now with a little bit of a head start, and tell them our story, and why they need to be here.

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