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Why Crystal City is the right call for Amazon's HQ2

Rob Pegoraro
Contributing Editor

Editor’s note: This story originally ran on Nov. 6 and was updated on Nov. 13 after Amazon made its decision.

America’s largest online retailer is officially coming to one of the country’s smallest counties.

Amazon (AMZN) will split its long-awaited second headquarters between Crystal City in Arlington, Va., and Long Island City in New York more than a year after the Seattle firm began its “HQ2” search. But even a year ago, the front-runner status of Washington, D.C.’s next-door neighbor was evident.

Looking at not just the four main criteria the company laid out for prospective cities, but also the lesser specifications set out in Amazon’s request-for-proposals document for would-be HQ2 hosts, Arlington offers serious advantages. At the same time, some realities of life in this 26-square-mile jurisdiction, also my home, could complicate Amazon’s big move.

Location and transportation

Numerous cities could claim compatibility with Amazon’s core HQ2 priorities—a metro area with a million-plus people, a “stable and business-friendly environment,” urban or suburban locales that could “attract and retain strong technical talent” and big and creative thinking about the retailer’s space needs.

But Amazon’s transportation-specific requirements are so in line with Arlington’s existing infrastructure, that the company might as well have taken them from the county’s economic-development office. Crystal City, just across the Potomac from D.C., is barely three miles from the center of the nation’s capital, easily beating Amazon’s 30-mile maximum distance from a population center.

Amazon also wants an international airport within 45 minutes, which is more than enough time to drive from Crystal City to Dulles International Airport even in rush-hour traffic. Well, most days. More important, Washington National Airport—with two Alaska Airlines (ALK) non-stops a day to Seattle—is so close that you can walk to it from Crystal City.

Crystal City also sits just off Interstate 395, the primary highway into D.C. from Northern Virginia, and features a Metro station served by the Blue and Yellow lines as well as a Virginia Railway Express commuter-rail stop. The latter only offers weekday service. For travel to Amazon’s other prospective HQ2 location, Union Station and its frequent Amtrak service to NYC is a quick drive or a two-train Metro ride away.

Office space

Amazon also wants a lot of free space upfront for HQ2, which intersects with a lingering problem for Arlington: Its commercial real-estate vacancy rate has remained stubbornly stuck at around 20%, which has left entire buildings in the Crystal City submarket open.

The Washington Post’s report earlier this month that named Crystal City as a likely finalist even specified two locations in particular that owner JBG Smith Properties (JBGS) could have ready in months for Amazon HQ2: 1851 S. Bell St. and 1770 Crystal Dr.

Any Amazon-inspired redevelopment of Crystal City could do the neighborhood enormous favors. Its 1960s-era development left it dominated by superblocks of concrete boxes, with pedestrian navigation shunted to underground passageways. Various projects over the last decade or so have given Crystal City much more life at street level, but accelerated rebuilding would speed this rescue of the neighborhood from its legacy of misguided, auto-centric urban planning.

Amazon didn’t specify proximity to the federal government as an HQ2 requirement, but it already has a substantial presence in Washington in the form of its large and growing lobbying operation. The resulting traffic between Crystal City and Capitol Hill might leave a few new ruts in the pavement of the I-395 bridges.

Warning factors: high housing prices, skeptical and informed citizenry

Housing is already expensive in Arlington, with Zillow data showing the county’s home value index, as calculated by the real-estate site, hitting $664,000 in September. Residential buildings continue to rise throughout the county as its population has grown past 225,000 people, but Zillow projects that its home-value index will still hit $680,000 by September 2019.

Having another 50,000 or so Amazon employees land in the county might solve Arlington’s commercial real-estate problem at the cost of exacerbating its housing-availability issues and further inflating property-tax bills that already often exceed the cap on state and local taxes set in President Trump’s tax plan.

And Arlingtonians will come to any debates over supporting Amazon with an extensive knowledge of rules and precedent. We’re a wonky lot, to the point that residents familiar with the county’s General Land Usage Plan use its acronym as a verb: “This block is GLUP-ed for high office-apartment-hotel development.”

Amazon should expect this much now that it had made one of its second homes in Arlington: This won’t be a one-click shopping process.

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Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.