The Arlington County Board agreed unanimously Thursday to give an $11.5 million grant over the next 15 years to the landlord that houses the Drug Enforcement Administration in order to keep the federal agency in Pentagon City.
Board members reluctantly voted for the deal, which was negotiated in 2016, saying that it was odd to have to offer incentives to a federal agency to remain in Arlington. But without the grant, the DEA could leave and increase the county’s 17 percent commercial vacancy rate another 1.3 percent, taking 3,000 jobs with it.
The loss of the Transportation Security Administration and Defense Department tenants over the past decade has cost Arlington millions in tax revenue. The county counts on commercial property taxes to cover about half of its annual operations.
The unusually large economic incentive grant will go to the landlord, CSHV Lincoln Place LLC, which owns the office space leased to the DEA at 600 and 700 Army Navy Drive. The deal is expected to generate net tax revenue of more than $31 million over the next 15 years, as well as indirect revenues through meals, sales and hotel taxes of about $450,000 per year, local economic development officials said.