Amazon is set to receive its first incentive payment from the Northern Virginia county where it established its second headquarters after a blockbuster continental search.
Arlington County expects to send a payment of $81,745 to the tech giant this month, according to a statement the county posted online. The incentive payment is being made due to an increase in the county's transient occupancy tax revenue from incremental growth in hotel and lodging tax dollars tied to Amazon's second headquarters, also known as HQ2.
The amount is equal to 15% of what is earned above a baseline of nearly $25 million in fiscal year revenue from a hotel occupancy tax that Amazon was promised in a March 2019 agreement if it meets annual office occupancy targets.
"Amazon has met or exceeded its occupancy targets every year since the beginning of the 15-year performance period," the announcement said, though it's the first fiscal year since the HQ2 decision was finalized that the specific tax earnings have been high enough for Amazon to be entitled to a grant disbursement from the county.
During its HQ2 search process, Amazon received 238 proposals from cities and regions in the United States, Canada and Mexico. Amazon selected Northern Virginia to be the sole locale to host its East Coast headquarters in February 2019. So far, the company has only formally earned a fraction of the hundreds of millions of dollars it could be eligible to receive from the county and state.
The first phase of Amazon's HQ2 project, a pair of 22-story office towers collectively named Metropolitan Park, opened to employees in mid-2023. The second and final phase of the project, known as PenPlace, has been on pause since 2023. This summer, the Arlington County Board approved an extension for the project's site plan through June 30, 2028.
The county funding is separate from a pay-for-performance agreement between Virginia and Amazon tied to job creation at the HQ2 complex. That incentive could ultimately enable the company to earn $750 million across two areas. So far, in conjunction with that package, Amazon is slated to receive nearly $153 million in September 2026 and just over $6.4 million in September 2029, according to annual forms the Virginia Economic Development Partnership shared with CoStar News.
Meanwhile, Arlington County said funding is available as part of a mechanism to fund public investment in infrastructure needs in the neighborhood, dubbed National Landing, where Amazon's HQ2 is located. That "Strategic Infrastructure Investment" is calculated annually based on 50% of the revenue collected through the National Landing Tax Increment Financing district that exceeds the established baseline amount. For fiscal year 2025, the tax increment financing, or TIF, funding totals $355,510.