The Amazon deal – no, not that one

Web services division picks Herndon for East Coast corporate campus

Published March 2, 2018 by Stephenie Overman

“Amazon” has been the word on the lips of business leaders lately in Northern Virginia. And it’s not just because the region is among the finalists looking to snare the company’s planned second headquarters.

Months before Northern Virginia was announced as a top 20 contender for Amazon’s “HQ2,” the state had sealed a deal with Amazon Web Services Inc., an Amazon.com company, to locate its new East Coast corporate campus in the Herndon area.

“Historically Virginia has had a great corporate relationship with Amazon; Amazon has a large presence already” in the state, says Suzanne Clark, communications director for the Virginia Economic Development Partnership.

“When we were made aware of the potential of this project” — a potential to create up to 1,500 new jobs — “that existing corporate partnership and history was helpful.”

Clark says then-Gov. Terry McAuliffe met personally with Amazon representatives and that the VEDP worked with the General Assembly’s Major Employment and Investment (MEI) Commission to craft the deal that was announced June 8. Commonwealth officials announced that Virginia beat out Texas and Washington state for the project.

The custom performance state grant approved by the governor and the MEI Commission states that after the hiring of 600 new employees, AWS will be eligible to receive $7,000 per net new job created, up to 1,500 total jobs.
Amazon Web Services is a secure cloud services platform that offers compute power, database storage and content delivery. According to the company, positions at the Herndon corporate campus will be mainly technical roles in the cloud computing business.

The public may know more about Amazon’s e-commerce business, but investors love AWS, according to The Motley Fool. The financial services company reports that although the division represented only about 11 percent of total revenue in the nine-month period that ended Sept. 30, “this higher-margin business produced nearly $3 billion in operating income, while the North American retailing segment brought in only $1.1 billion in operating income in the period.”

The location chosen by AWS is One Dulles Tower, a 400,000-square-foot Class A office building at 13200 Woodland Park Drive on the Dulles Toll Road. Federal Capital Partners acquired the building from Corporate Office Properties Trust in October 2015 for a reported $84 million. One Dulles Tower had been leased to Booz Allen Hamilton, which vacated the building at the end of 2015.

The site is about two miles east of Washington Dulles International Airport and about one half-mile from both the future Herndon and Innovation Center Silver Line Metro stations.
Tech-savvy workforce

Todd P. Haymore, secretary of commerce and trade at the time of the announcement, said in a statement that “with one of the largest technology workforces in the nation, Northern Virginia is an ideal home for the East Coast corporate campus.” He added that “nearly 7,000 Virginians already are employed by this global leader.”

Of the Fairfax population 25 years old and older, 60.3 percent have a bachelor’s degree or higher. Across the county line in Loudoun the figure is 58.8 percent. Loudoun County has the highest median household income in the country; Fairfax is second.

Gerald L. Gordon, president and CEO of the Fairfax County Economic Development Authority, expressed pride that Amazon chose to expand in the area, stating that “any community would be thrilled to have this employer and this kind of corporate presence, and I am delighted the county’s diversified IT base, workforce and quality of life offer the right mix for the company.”

Gordon says Amazon Web Services, with its new corporate campus in Fairfax County and existing operations in Loudoun County, fits what has become the Northern Virginia model.

Loudoun and Prince William counties are more aggressive in trying to attract various data centers because they have enough available space for the land-intensive projects, Gordon says. But “in many cases we’ll get the headquarters and they’ll put the data center out farther.”

As much as 70 percent of the world’s internet traffic flows daily through data centers in Loudoun, according to the county’s economic development office.