CHEVY CHASE, Md.--(BUSINESS WIRE)--JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, is pleased to share the news that all government incentives and investment packages negotiated in conjunction with Amazon’s decision to locate its second headquarters within JBG SMITH’s National Landing assets in Northern Virginia have been approved.
On Saturday, March 16, the five elected members of the Arlington County Board unanimously approved a performance agreement pertaining to Amazon’s National Landing headquarters. The incentive agreement provides Amazon with up to $23 million over 15 years if it creates at least 25,000 jobs with an average salary of $150,000 annually and occupies 6 million square feet of office space in the County by 2035. The agreement contemplates that the performance-based incentives will be paid by allocating a portion of the increase in hotel tax revenues anticipated as a result of Amazon’s National Landing headquarters.
According to the Arlington Economic Development Commission, the County will realize a $14 return for every $1 that Amazon earns in performance-based incentives. The additional tax revenues generated by Amazon’s National Landing headquarters will be used to invest in improvements to the County’s schools, affordable housing, parks and transportation network.
“The Arlington County Board’s unanimous support for Amazon’s HQ2 project represents a major milestone in the collective effort to establish National Landing as a global hub for innovation and technology,” said JBG SMITH CEO, Matt Kelly. “Saturday’s vote is a clear reflection of the Northern Virginia community’s strong embrace of a visionary project that will create tens of thousands of jobs, dramatically increase local tax revenues, and spur major new investments in the region’s transportation, affordable housing, and educational infrastructure.”
In late January of this year, the Virginia General Assembly overwhelmingly approved legislation to provide Amazon with up to $750 million in performance-related incentives and committed $250 million toward Virginia Tech’s planned $1 billion Innovation Campus to be located in National Landing. Combined with Saturday’s Arlington Board vote, approval has now been secured for all of the government’s pledged support as part of a November 2018 Memorandum of Understanding with Amazon.
In conjunction with its November 2018 agreements with the Commonwealth of Virginia and Arlington County, Amazon announced that it had selected JBG SMITH as its partner to house and develop a new headquarters location at National Landing. Amazon is expected to lease approximately 537,000 square feet of existing JBG SMITH office space, starting with 241 18th Street and 1800 South Bell this year, followed by 1770 Crystal Drive in 2020.
Amazon is also expected to purchase JBG SMITH’s Pen Place and Met 6, 7 and 8 development sites in Pentagon City on which JBG SMITH plans to develop 4.1 million square feet of modern office space for Amazon. JBG SMITH expects to serve as the developer, property manager and retail leasing agent for the project.
National Landing is the newly defined interconnected and walkable neighborhood that encompasses Crystal City, the eastern portion of Pentagon City and the northern portion of Potomac Yard. Situated across the Potomac River from Washington, DC, National Landing is a best-located, urban community known for its adjacency to Reagan National Airport and walkable environment featuring offices, apartments and hotels. In National Landing, JBG SMITH owns 6.2 million square feet of existing office space, 2,850 units of existing multifamily space, and controls 7.4 million square feet of additional development opportunities, excluding Amazon’s proposed land purchase.
In addition to its work with Amazon at National Landing, JBG SMITH broke ground late last year on Central District Retail, an approximately 109,000 net rentable square feet entertainment and shopping destination that will serve as the retail heart of National Landing. JBG SMITH also expects to commence construction next year on 1900 Crystal Drive, which is expected to deliver two residential towers with shops and green spaces at the base. When completed, these two projects are expected to deliver over 750 apartments and almost 150,000 square feet of new street-level retail featuring an Alamo Drafthouse Cinema, specialty grocer, restaurants, bars, and other experiential offerings. Although the base case for the 1900 Crystal Drive development assumes multifamily construction, the project could switch to office in the event of a substantial or full building pre-lease.
About JBG SMITH
JBG SMITH is an S&P 400 company that owns, operates, invests in and develops assets concentrated in leading urban infill submarkets in and around Washington, DC. Our mixed-use operating portfolio comprises approximately 19 million square feet of high-quality office, multifamily and retail assets, 98% of which are Metro-served. With a focus on placemaking, JBG SMITH drives synergies across the portfolio and creates amenity-rich, walkable neighborhoods. JBG SMITH’s future development pipeline includes over 19.0 million square feet of potential development density. For additional information on JBG SMITH please visit www.jbgsmith.com.
Forward-Looking Statements
Forward-Looking Statements Certain statements contained herein may constitute “forward-looking statements” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties (“JBG SMITH” or the “Company”) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximate”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans”, “would”, “may” or similar expressions in this press release. We also note the following forward-looking statements: expected key Amazon transaction terms, our development plans related to Amazon HQ2, our anticipated role as developer, asset manager and leasing agent in connection with Amazon HQ2, in the case of 3 our construction and near-term development assets, estimated square feet, estimated number of units, intended type of asset use and potential tenants and in the case of our future development assets, estimated potential development density; planned infrastructure improvements; and the economic impacts of Amazon’s HQ at National Landing on the DC region, and National Landing. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forwardlooking statements and other risks and uncertainties, see “Risk Factors” and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and other periodic reports the Company files with the Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements after the date hereof.