Amazon's HQ2 in Northern Virginia could boost Maryland's economy, but not so much in Baltimore

Amazon’s selection of Northern Virginia for part of its massive expansion should benefit Maryland, but experts don’t expect many of those benefits to extend north to Baltimore.

After weighing hundreds of bids for the company’s second headquarters, the online retail behemoth announced Tuesday that it would split its proposed HQ2 hub between Crystal City in Arlington, Va., and Long Island City, N.Y. The move is expected to create about 25,000 jobs at each location and spur billions of dollars in investment.

Although Maryland’s bids for prospective Amazon headquarters in Montgomery County, Port Covington and Old Goucher were passed over, the state still stands to prosper from Amazon’s presence just across the Potomac River from Washington and about two miles from Prince George’s County.

Maryland’s corporate job market, housing industry and businesses within Amazon’s supply chain could experience a boost from the company’s addition to Crystal City. But it’s likely those effects will be concentrated closer to Arlington and realized gradually as Amazon grows the new headquarters in phases during the next two decades.

“This is an economic plus for Maryland. It’s just not as much of a plus as if we won the whole thing,” said Richard Clinch, executive director of the Jacob France Institute at the University of Baltimore.

The Washington suburbs — particularly Prince George’s, Montgomery and Charles counties — are poised to benefit the most.

“It’s good for those parts of Maryland; it’s clearly much better for Northern Virginia,” Clinch said. “What’s good for the region is good for the Maryland portion, so we’re gong to benefit from jobs directly and indirectly.”

In a statement, Gov. Larry Hogan said he looks forward to working with Virginia Governor Ralph Northam and D.C. Mayor Muriel Bowser to meet Amazon’s needs.

“Amazon’s decision to locate one of its new headquarters facilities in Northern Virginia is a tremendous win for the entire Capital region,” Hogan said in a statement. “Collectively, we will not only gain 25,000 corporate-level jobs, but also many businesses that are part of Amazon’s supply chain.”

Sage Policy Group chairman and CEO Anirban Basu expects Maryland to play a role in supporting Amazon’s supply chain.

Amazon already has a significant presence in the state, employing several thousand people at distribution warehouses in Baltimore city and county and Cecil County.

Other related businesses, such as lobbyists and legal firms, could grow, too, Basu said.

Amazon’s HQ2 also could benefit from natural synergies with Maryland’s cybersecurity and life sciences communities, Basu said — particularly as Amazon looks to break into pharmaceutical delivery.

Amazon’s addition also could drive wages higher as Maryland companies look to retain workers in information technology and management roles, Clinch said.

Donald C. Fry, president and CEO of the Greater Baltimore Committee, pointed to the Baltimore region’s pipeline of highly educated graduates who could be hired by Amazon, making their universities more attractive to prospective students. He agreed that the area’s tech companies and universities would be natural partners for Amazon’s HQ2.

“The Greater Baltimore Committee will work to ensure the Baltimore region explores opportunities to leverage Amazon’s new headquarters,” Fry said in a statement. “A clear focus should be the need for better rapid and efficient transportation connections between the Baltimore and Washington regions.”

A lack of quick and effective transportation was among the reasons Bozzuto Group President and CEO Toby Bozzuto was not optimistic Baltimore would become a reasonable housing option for Amazon employees working in Northern Virginia.

“I am hoping that it has a spillover effect with Baltimore as a bedroom community, but I think it is far more likely that many, many more areas beyond Crystal City and D.C. will be utilized for housing,” said Bozzuto, whose company develops luxury apartments throughout the East Coast, including in the Baltimore-D.C. corridor. “The D.C. transportation network is so robust and you could live anywhere in the D.C. [metropolitan area] and suburban Maryland and be within a Metro ride.”

While some Amazon workers may choose to live in Maryland — settling in the Washington suburbs or buying waterfront properties in Annapolis — “that’s unlikely to extend all the way to Baltimore,” Clinch said.

Still, Bozzuto said he’s bullish on Amazon’s impact on the region’s rental and for-sale markets, and he expects housing prices could rise as a result.

Meanwhile, Basu worried Amazon’s job opportunities could siphon talented managers and corporate workers away from Baltimore, particularly because Baltimore’s reputation for crime already is creating difficulty for companies that are recruiting.

“It’s a region that’s fragmenting because of the issues in the city,” Basu said. “People might be induced to start anew in Northern Virginia. … I hope I’m dead wrong about that.”

smeehan@baltsun.com

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