Arlington County approves $23m grant for Amazon new headquarters. Credit: Arlington County Government.

The Arlington County Board has approved a direct financial incentive of $23m to US online retailer Amazon, which is linked to Amazon’s six million square foot office space expansion, planned over the next 15 years.

The county will fund the incentive from a portion of the new incremental revenue generated by its Transient Occupancy Tax (TOT). TOT is a tax paid on hotel rooms or other paid lodging.

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Arlington County board chair Christian Dorsey said: “This performance agreement is really just the beginning of what I believe will be a long and productive partnership between Arlington and Amazon.

“This board, and senior county staff, have spent months in intense discussion with our community about what Amazon’s arrival in Crystal City and Pentagon City will mean for Arlington.”

Following a public hearing and questioning of Amazon executives, the board voted unanimously to approve the performance agreement with the online retailer.

“This performance agreement is really just the beginning of what I believe will be a long and productive partnership between Arlington and Amazon.”

Dorsey added: “Our vote today reflects our strong belief that Amazon will bring significant benefits to our community, to neighboring Alexandria, the region and the state.

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“I view this agreement as a new model for economic development, where most resources are devoted to improvements in infrastructure and developing human capital.

“Only 5 percent of the incentives are paid directly to Amazon, and only if they are successful in contributing to revenue growth while fulfilling their commitments to invest in Arlington.”

Amazon announced last year it would establish two new headquarters in New York City and Arlington with an investment of $5bn.

The company expects to create more than 50,000 jobs across the two locations, which will join the company’s current North American headquarters in Seattle.