Why Yelp chose DC

Over the past several months, Silicon Valley tech giant Yelp has been engaged in a quiet, rather covert search for office space in the District while having private discussions with Mayor Bowser’s office about the possibility of expansion to D.C.

This came to a head last week, when Bowser announced that the publicly-traded company would expand to include a 52,000-square-foot office in Penn Quarter.

The company, which will begin construction by the summer’s end, is projecting the creation of 500 new sales and marketing jobs in the District within the next five years. This is a significant win for D.C.’s regional economy, which has been consistently seeking to diversify the economy beyond the federal government. But why did the company choose D.C. when it could have gone elsewhere.

Why D.C.?

First, and most obviously, D.C. boasts many inherent qualities that make it an attractive location for businesses. As Yelp CEO and cofounder Jeremy Stoppelman said in a blog post last week, contributing factors in the company’s decision include D.C.’s proximity to other East Coast cities, the public transportation system, a highly educated workforce and a strong and growing technology community.

Those advantages aside, it doesn’t hurt that Mayor Bowser’s administration has been hitting the pavement hard to attract businesses development in the city with lucrative perks. According to Andrew Trueblood, Chief of Staff at the Office of the Deputy Mayor for Planning and Economic Development, a central focus of the Bowser Administration has been to expand D.C.’s business community. Trueblood explained that Bowser is the driving force behind this goal, having instructed her staff to proactively engage companies like Yelp to help them understand the benefits of planting roots in the District — including significant tax incentives.

In fact, when the Bowser administration became aware of Yelp’s interest in expanding its East Coast presence beyond the already-existing (and very perk-laden) New York City location, it was Mayor Bowser herself who personally called up executives at Yelp to begin a conversation, Trueblood said. At the same time, her staff began engaging with Yelp’s brokers to help them understand the costs, value and incentives for companies looking to break ground and operate in the District. Through this multi-level approach, the District successfully won Yelp over. (In addition to New York City and its Bay Area HQ, Yelp has offices in Chicago and Phoenix.)

Yelp Opens DC Office: We're Hiring! https://t.co/CHaccYf4qE

— Yelp (@Yelp) August 4, 2017

D.C.’s incentives for high-tech businesses are robust, with the city offering a package known as the Qualified High Technology Companies (QHTC) program. The program provides an array of enticing advantages for qualifying businesses, including reducing the corporate finance tax to zero percent for five years and locking in a lower rate for perpetuity, as well as providing tax credits for hiring.

So what’s the upshot?

It would appear that Mayor Bowser’s vision and implementation of business expansion in the District is being met with success. In recent months, Facebook has announced plans to double its D.C. office space and Apple has plans to revitalize the Carnegie Library.

All this growth is is part of a trend of growth in the city’s tech sector. Earlier this summer, real estate firm Cushman & Wakefield identified the nation’s capital as the third-leading high-tech metro area in 2016, above New York City and Los Angeles. It also found that the Greater Washington area attracted $1.1 billion in venture capital investment last year alone.

Plunking 500 Yelp workers in the center of town, despite the cost of luring them there, will certainly contribute to that momentum.