Northern Virginia localities ready their pitch for Amazon’s second headquarters

Published September 14, 2017 by Paula C. Squires

The list is getting longer, and the clock is ticking as cities across North America hustle for the chance to land the economic development prize of the century: Amazon’s second corporate headquarters.

The world’s largest online retailer is looking to build a $5 billion headquarters that would bring 50,000 high-paying, full-time jobs along with 8 million square feet of commercial space — a complex larger than the 6.6 million-square-foot Pentagon.

Seattle-based Amazon announced its plans on Sept. 7, inviting responses to a request for proposal (RFP) for the mega project that it is calling HQ2. The deadline is Oct. 19.

“This is unprecedented,” said Aaron Jodka, director of research for Colliers International in Boston. “There has never been a request like this in history,” and especially, he says, over such a short timeframe.

Economic development agencies across the country, including Virginia’s Economic Development Partnership (VEDP), are scrambling to help local and regional partners develop competitive bids in response to Amazon’s open call.

“Virginia has a keen interest in the Amazon HQ2 opportunity,” says Stephen Moret, the CEO of VEDP. “We are thoroughly reviewing the company’s RFP, which includes a formidable set of site-selection criteria appropriate for a company with Amazon’s scale and ambition. … VEDP is committed to working closely with Governor McAuliffe and Commerce and Trade Secretary [Todd] Haymore to prepare a robust response in concert with our economic development partners at the local, regional and state levels.” 

While Moret remained mum on which localities are seeking VEDP’s help, officials in Northern Virginia say several localities there have expressed interest. Washington, D.C., Loudoun County, Arlington and Fairfax County are all expected to go after the Amazon project. And they’ll have plenty of company from major cities such as Boston, Philadelphia, Chicago and St. Louis that are lining up by the day to throw their hats into a hyper competitive ring.

Real estate officials expect a bidding war with localities pulling out their creative stops to craft incentive packages that would help seal the deal. Virginia is not known as a big incentive state. The Commonwealth Opportunity Fund, which the governor typically taps to seal deals, received an appropriation of $20.7 for fiscal 2018. Plus localitites are expected to meet specifications that Amazon has outlined for a second location.

They include a preference for metropolitan areas with more than 1 million people, urban or suburban locations with the potential to attract strong technical talent and “a development prepped site” within 30 miles of a city center, 45 minutes from an international airport and direct access to highways and mass transit (bus routes, metro rail and train). Amazon also wants “a stable and business-friendly environment.”

Those attributes alone, says Jodka, are enough to knock out secondary cities such as Charlotte, N.C.; Nashville, Tenn.; and Virginia Beach that don’t have access to mass transist.

In fact, considering the short timeframe, Jodka thinks Amazon already may have a short list in mind.  “They’re hoping to make a decision next year, as they would like to be up and running with a 500,000 square-foot facility [phase one of the larger project] in 2019 … Based on that, I think Amazon already had some places in mind. They might be curious to get some ideas and shop around, but I would be shocked if they chose a location that they had not considered on their radar screen,” he said.

It wouldn’t be the first time a major company played cities off against one another to get the best deal. “Companies do this all the time,” said Jodka.

Still, there’s no denying that a second headquarters would be a game-changing project.

In announcing the company’s second headquarter plans,  Amazon's founder and CEO Jeff Bezos said it would be “a full equal to our Seattle headquarters,” which has prompted $38 billion in additional investment to the local economy.  “Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home,” Bezos said.

Jodka, of course, is routing for Boston with its access to top colleges and strong technology base. Yet, he acknowledges that the Washington, D.C., region and Toronto meet many of the items on Amazon’s list.

Using Amazon’s criteria, The New York Times published a story last week narrowing the top two choices to Denver and Washington, D.C. The article noted, however, that land prices in D.C. are high, giving the edge to Denver.

In the greater D.C. region, officials have swung into action to prove that it would be a good fit.  “We have as good a shot as anyone in North America. When you look at what Amazon has put out in their RFP, there are a lot of places here that would fit the bill,” said Jim Corcoran, president and CEO of the Northern Virginia Chamber of Commerce.

While Northern Virginia localities will be competing against each other, they also have begun to collaborate to promote the region as a whole.

“There’s a recognition that every locality is going to do everything it can to compete for this, but at the same time, there are benefits for the region as a whole if one of them were to win the project,” said Matthew F. Letourneau, a member of the Loudoun County Board of Supervisors and vice chairman of the Metropolitan Washington Council of Governments. (COG). The 23-member group serves as the region’s metropolitan planning organization.

After a meeting yesterday, Letourneau said COG has been tasked with coming up with an submission to Amazon that would discuss what the region could offer as a whole in terms of workforce talent, transportation infrastructure and amenities.  The staff would work with consultants and people at the local and county administrative levels to develop a document, which Letourneau made clear is still very much in the works.

In the meantime, he remains a cheerleader for Loudoun. “We have one of the most highly educated workforces in the country. That’s a critical component that will distinguish Loudoun from some of the competition.”

Amazon already has a presence in Loudoun, he added, referring to the company’s data centers.  Amazon recently chose Fairfax County for the East Coast corporate campus for Amazon Web Services, its cloud services division.  Bezo also is familiar with the region because he owns the Washington Post. According to the Post, Bezo recently purchased a $23 million property, the 27,000-square-foot former Textile Museum, in the Kalorma neighborhood in D.C., that he reportedly plans to convert into a single-family home.

“Obviously we have a great working relationship with the team from Seattle and will pursue this opportunity with our full resources,” Buddy Rizer, Loudoun’s executive director for economic development, said in a statement. “Loudoun County would be the perfect place for Amazon to locate their East Coast headquarters; with our new metro stops, great access to Dulles airport and unmatched workforce, Loudoun checks all the boxes for any major corporate relocation.”

Earlier this week, the finance, government operations and economic development committee of the Loudoun Board of Supervisors, which Letourneau heads, approved a request to form an ad-hoc committee to help Rizer’s agency with the Amazon bid. The request for the committee came from the county’s Economic Development Advisory Commission.

“These types of relocations — a new headquarters — don’t happen that often,” noted Letourneau. Loudoun can offer open spaces adjacent to the next phase of the Silver Metro line, which is scheduled to open in 2020. “We’re already in the mode of looking for these types of opportunities … So this fits in perfectly with our strategy. It’s a huge project, but we are uniquely positioned to compete for it.”

Corcoran noted that Tysons in Fairfax County has the space and amenities that Amazon seeks, while the Crystal City area in Arlington has come up as another possible candidate.  “It may come down to whether Amazon wants a sprawling suburban campus, or a more urban feel,” he says.