Yelp is opening a new office in the nation’s capital in a move city officials say will bring 500 jobs to Washington over the next five years and boost the District’s fledgling tech industry.
The San Francisco-based company, which pioneered user-generated reviews for businesses and has become a household name in the digital economy, will open its office in a 52,000-square-foot space next to Verizon Center, city officials announced Friday. In addition to its Bay Area headquarters, Yelp has offices in New York City, Chicago, London, Hamburg and Scottsdale, Ariz.
“We are thrilled to have attracted Yelp to our expanding business community and thriving tech scene,” Mayor Muriel E. Bowser (D), who is out of town on vacation, said in a statement. She said the company’s decision would lead to “good-paying, 21st-century jobs for District residents.”
Yelp’s move into the city didn’t come cheap.
The firm will benefit from a generous package of tax incentives the District offers tech companies, including a five-year holiday on corporate tax payments and a rebate program for office-building improvements that could be worth up to $1 million per year, said Andrew Trueblood, chief of staff to the deputy mayor for planning and economic development.
“We did a full-court press on this,” Trueblood said.
Trueblood declined to disclose the estimated value of Yelp’s tax incentives, saying they were calculated using confidential business information from the company.
He said that the city nevertheless expects that Yelp’s new office will generate increased tax revenue of up to $20 million over the 12-year term of its initial lease, even after accounting for the tax credits the company will receive. The company has also agreed to a goal of hiring about half of its 500 new employees from inside the District.
Yelp chief executive Jeremy Stoppelman said in a statement that Washington’s “burgeoning technology sector is a welcoming setting for Yelp” and that the company would have “access to top-tier talent” when hiring inside the city.
As the District has grown headlong in recent years, Bowser has devoted special attention to cultivating tech companies, which in the past had largely overlooked the nation’s capital as a place to do business. Even technology firms catering to the needs of the federal government have often preferred to set up shop in Northern Virginia.
In 2015, Bowser persuaded the Advisory Board Company — the District’s largest technology firm, with 3,800 workers — to stay in town with incentives worth $60 million.
Such largesse is frequently denounced by advocates for the poor, especially at a time when many longtime D.C. residents are struggling with a dearth of affordable housing in the gentrifying city.
“Why do we still have really generous tax breaks to encourage companies to locate here when we’re a strong enough economy that they should want to be here already?” said Ed Lazere, executive director of the D.C. Fiscal Policy Institute.
“The more important challenge is, what do we do to manage our growth in a way that helps everybody stay here, rather than using tax breaks to prime the engine in ways that promote even more gentrification?”