Sunday , February 11, 2018 - 12:10 PM
(c) 2018, The Washington Post.
Many locals cheered when the Washington, D.C., area claimed three spots on Amazon.com’s shortlist of regions still in contention to host a second headquarters and its 50,000 jobs. The winnowing left the area with the best odds of any in the country.
But recent interviews with more than a dozen local officials and real estate executives reveal a far more complex competition. The region’s three bids actually represent at least nine proposals, offering Amazon a spectrum of options, whether it be an opportunity to blend into an existing cityscape or build something new, or perhaps pursue something in between.
Amazon’s preference will probably say a lot about the company it wants to be and signal which locations have the upper hand.
For now, the company has given little hint, according to business and elected leaders, many who spoke on the condition of anonymity because of Amazon’s request that they be discreet with information about the process.
All nine proposals technically meet the criteria Amazon has laid out. They all provide access to Washington’s talent pool, Metro system and airports. But all carry their own challenges. Urban sites tend to be more expensive and laborious to build on, a potential drag for a company known for its impatience.
Suburban or exurban locations, however, bring worries about navigating the region’s notorious traffic. More than 20 percent of Amazon’s headquarters employees walk to work, according to the company. Seventeen percent live in the same Zip code as their office.
As part of the District of Columbia’s submission, D.C. Mayor Muriel E. Bowser has offered four alternatives. They include a mix of development sites in three fast-growing neighborhoods: behind Union Station in Northeast, near U Street in Northwest and straddling the Anacostia River in Southeast. A fourth proposal calls for razing and rezoning a large parcel near Capitol Hill and RFK Stadium, dubbed Hill East.
In Virginia and Maryland, officials have been more coy about their locations. The Northern Virginia proposal, submitted by former Gov. Terry McAuliffe, includes four areas capable of accommodating Amazon: Crystal City and Potomac Yard; the Center for Innovative Technology campus in Herndon; the Eisenhower Avenue area of Alexandria; and an assortment of parcels in the Rosslyn-Ballston corridor.
The proposal from County Executive Isiah Leggett, submitted by Montgomery County with the support of Maryland Gov. Larry Hogan, offers parcels in the area between the Capital Beltway and Montrose Parkway, commonly referred to as White Flint or North Bethesda.
Here’s how those watching the competition size up Amazon’s choices:
- Option 1: Copy Seattle site
In Seattle’s South Lake Union area, Amazon selected a seldom-visited location largely owned by a single company: Microsoft co-founder Paul Allen’s Vulcan Real Estate. In 10 years, the two companies raced to turn the area into a teeming tech hub with more than 40,000 employees.
“Zoning was all done. That was all there. We didn’t ask for anything new. (Vulcan) had done the heavy lifting,” John Schoettler, Amazon’s vice president for global real estate said in an earlier interview.
Experts - even those backing other locations - said replicating such an environment locally could elevate Crystal City and Potomac Yard in Northern Virginia as Amazon’s best option.
Like South Lake Union, those areas are filled with outdated buildings and underused properties, including yawning vacancies in some of the office buildings. And like South Lake Union, one well-capitalized company oversees the parcels: JBG Smith. The $4.4 billion company is the region’s biggest real estate owner, most active developer and owns a majority of the property in this bid - enough to accommodate all 8 million square feet on its own. No other company can say that.
Amazon could move in quickly and once it got there, it could act fast.
Arlington Economic Development Director Victor Hoskins declined to discuss the county’s proposed sites but said he is selling Arlington as the center of the area’s tech workforce, adjacent to both D.C. and Montgomery County.
“We’re selling the whole region,” he said.
- Option 2: Integrate into the city
In Seattle, Amazon employees are encouraged to leave their office for lunch and walk to the 28 restaurants that populate the company’s buildings. Executives trumpet the fact that Amazon’s buildings aren’t secluded from their surroundings, and they aren’t even branded with the company’s logo.
There are homey touches, too. The company allows dog lovers to register their pets with security and bring them to work. Free bananas are offered to passersby.
If Amazon wants to double down on the millennial crowd it could do that in D.C.‘s NoMa neighborhood of Northeast, the area anchored by Nationals Park in Southeast or the Rosslyn-Ballston corridor in Arlington. They don’t offer huge plots of land controlled by singular entities - rather, they’re a slew of parcels owned by different developers working on different timelines.
The areas are well established as popular places to live and work for the region’s young tech talent.
“We know that their employees want to live someplace where they don’t have to depend on a car. We know that they’re concerned also about a pipeline of talent,” Bowser said in an interview. “So we looked at what they were asking for and we looked around our city and we knew we could be on point with our response to the things that they were looking for.”
Developing D.C.‘s two other options, Hill East and the U Street-Shaw neighborhoods, would probably be thornier than the others. Parcels there are collectively home to the Franklin D. Reeves Center Municipal Building, Howard University Hospital, a homeless shelter, the headquarters of the D.C. Housing Authority and other uses. No master developer has been selected for either location, and major zoning approvals would be needed to achieve 8 million square feet.
- Option 3: Embrace suburbs
To fuel Amazon’s workforce, said Maryland Secretary of Commerce Mike Gill, “you need to hire a whole bunch of college graduates.”
Maryland and Montgomery officials are working to bring those graduates to the redeveloping stretch of Rockville Pike known as White Flint, or North Bethesda. It’s a similar argument Alexandria is making in proposing the area along Eisenhower Avenue. Both areas have seen fits and starts of new construction but have most of their potential ahead of them.
If Amazon is concerned about retaining employees as they move into their 30s, settle down and have families, Montgomery’s bucolic neighborhoods and strong public schools might be the answer. Zoning and transportation overhauls around the White Flint Metro station are already well underway and developers here - including Washington Nationals owner Ted Lerner - have deep pockets and a collective vision for creating an attractive area for workers.
“I think it’s workforce, workforce, workforce,” said developer Bob Buchanan, chairman of the Montgomery County Economic Development Corp. “Amazon is coming to these entities and saying, ‘OK, we’re coming in with 50,000 employees over time. Can we really find them there or attract them there, and can we keep them there? And if need be, can we retrain them there?‘ “
- Option 4: Go it alone
It has received scant attention, but one possibility Amazon floats in its criteria is “a greenfield site of approximately 100 acres certified or pad ready, with utility infrastructure in place.”
Therein lies the chance for Fairfax and Loudoun counties to capitalize on the state-owned Center for Innovative Technology campus. Thirteen miles outside the Capital Beltway, it has not lived up to its promise as a publicly sponsored tech hub - to the point that the state offered it for sale in the summer of 2017.
Facebook, Apple and other tech giants have gone against the trend of urbanization by erecting massive, inward-looking campuses featuring all the amenities their employees can dream up. If Amazon wants its own version in the Washington area, this is the rare chance at a blank canvas near a Silver Line Metro station under construction.
“I think it comes down to what does Amazon want?” said Buddy Rizer, executive director of Loudoun County economic development. “There are the infill sites that offer a more urban environment. And then there’s 100 acres that would be a perfect place for them to make their vision a reality.”
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