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Greater Washington turns giddy over Amazon HQ2 prospects

Thursday, September 7, 2017

Washington Business Journal by Karen Goff and Daniel J. Sernovitz

Who wants to host Amazon HQ2?

Washington, D.C., does. So does Loudoun County. And Maryland. And probably all of the other jurisdictions we weren't able to reach in the six hours or so since Amazon sent politicians and economic development into a tizzy with its announcement that it will open a second corporate headquarters. The project, which could ultimately hit 8 million square feet, would be bigger than the Pentagon.

“We’re just digging through the info we got,” Steve Pennington, managing director of business and industry development at the Maryland Department of Commerce, told our sister paper, the Baltimore Business Journal. “We’ve got a ways to go. We’re excited about it and think it’s going to be a 50-state competition. It’s a huge project. Now, we’ve got to do all the hard work.”

The online retailer — and recent Whole Foods Market acquirer — said it expects to invest $5 billion in the first 15 to 17 years of the project, which it seeks to build in a metro area with a population of more than 1 million, in either an urban or suburban location, with potential to attract and retain talent. Greater Washington certainly checks off those boxes.

Chanda Washington, spokesman for D.C.'s deputy mayor for planning and economic development, said the District will pursue the retail giant, hoping to build on momentum it gained from another high-profile recruitment in the form of Yelp. But whether there is space large enough to accommodate the company remains to be seen.

"Mayor Bowser has directed us to pursue every opportunity to expand employment in the District, and we have already reviewed Amazon's search for a second headquarters," Washington said in a statement. "As Yelp shows, the District is open for business and provides the amenities and talented workforce to be a competitive location for major tech firms."

Amazon (NASDAQ: AMZN) is certainly well acquainted with Greater Washington. The company recently leased 400,000 square feet in Fairfax County for its east coast Amazon Web Services campus, and Virginia and Maryland officials have given the company about $50 million in incentives for its various facilities in recent years.

And, of course, Amazon founder and CEO Jeff Bezos owns The Washington Post and recently bought the former Textile Museum property — actually two houses connected — in Kalorama for $23 million. The company also recently gave a D.C. nonprofit $1 million if it can match that amount with its own campaign, its first such contribution outside of Seattle.

“We expect HQ2 to be a full equal to our Seattle headquarters,” Bezos said in the company's bombshell statement. “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.”

The RFP says the company is seeking up to 8 million square feet at buildout in 2027 of new HQ, but will start with 500,000 plus for Phase 1 targeted for 2019. It wants a space within a 30-mile proximity of a city center, within 45 minutes of an international airport and direct access highways and to mass transit.

Amazon said it would consider an urban or downtown campus, possibly one similar in layout to Amazon’s 33-building Seattle campus, where it occupies 8.1 million square feet, but other bids are acceptable.

A second corporate headquarters would bring 50,000 new full-time jobs with an average compensation of more than $100,000 over the next 10 to 15 years, according to Amazon’s RFP. Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy; every dollar invested by Amazon in Seattle generated an additional 1.4 dollars for the city’s economy overall.

Responses for Phase 1 of the RFP are due Oct. 19.

Another local jurisdiction that is eagerly applying is Loudoun County, even though its Silver Line Metro stations will not be open until 2020 and some locations there are more than 30 miles from D.C.'s core.

“We were made aware of this opportunity earlier this week,” Buddy Rizer, executive director of Loudoun County Economic Development, said in a statement. Loudoun has an 80,000-square-foot Amazon Pantry facility in Sterling.

"Obviously we have a great working relationship with the team from Seattle and will pursue this opportunity with our full resources. Loudoun County would be the perfect place for Amazon to locate their East Coast headquarters; our new Metro stops, great access to Dulles airport and unmatched workforce checks all the boxes for any major corporate relocation.”

We have reached out to other local economic development officials and will let you know what they say when we hear back. Chances are they will be interested.

Update: Officials in both Prince George's and Arlington counties said they are interested – with Arlington saying it definitely will pursue Amazon. Arlington recently landed the headquarters of Nestle USA.

Fairfax County Economic Development Authority, which has scored corporate headquarters with Northrop Grumman and Hilton Worldwide in recent years, declined to comment.