Why Amazon built a second headquarters and how the pandemic reshaped HQ2

Six years in the past, Amazon kicked off a sweepstakes-style contest looking for the place to construct a second headquarters. The competitors drew bids from 238 states, provinces and cities vying to be the following anchor for the nation’s dominant on-line retailer and second-largest non-public employer.

This week, Amazon formally opened the doorways of the primary a part of its new East Coast headquarters, dubbed HQ2, in northern Virginia. The first part, known as Metropolitan Park, contains two 22-story workplace towers, which might accommodate 14,000 of the 25,000 workers Amazon plans to carry on in Arlington. About 2,900 workers have already moved in, and Met Park can be occupied by 8,000 workers within the fall.

Amazon constructed its headquarters in Seattle in 1994 partly due to the realm’s deep pool of tech expertise and the presence of Microsoft in close by Redmond, Washington. The firm’s Seattle campus now spans tens of hundreds of thousands of sq. toes throughout greater than 40 workplace buildings, and the higher Puget Sound space has 65,000 company and technical Amazon workers.

It raises the query why Amazon, with its sprawling campus in Seattle and a rising actual property footprint globally, wanted to construct a second headquarters.

Around 2005, as Amazon’s business grew and its campus ballooned in Seattle, founder and then-CEO Jeff Bezos started to contemplate the place the corporate ought to develop subsequent.

At all-hands conferences, workers would ask Bezos “if we would ever be in one location at one time,” mentioned John Schoettler, Amazon’s actual property chief, in an interview.

“I think that there was a romantic notion that we as a company would only be so big that we’d all fit inside one building,” Schoettler mentioned. “[Bezos] had said, well, we have long-term leases and when those leases come up, I’ll work with John and the real estate team and we’ll figure out what to do next.”

Originally, Bezos urged Amazon keep across the Puget Sound space, however the dialog then shifted to recreating the “neighborhood” really feel of its Seattle campus elsewhere, Schoettler mentioned.

“We could have gone out to the suburbs and we could have taken some farmland and knocked some trees down, and we would’ve built a campus that would have been very inward-looking,” he mentioned. “They generally have a north or south entrance and exit east or west. When you put yourself in the middle of the urban fabric and create a walkable neighborhood, an 18-hour district, you become very outward, and you become very part of the community, and that’s what we wanted.”

Holly Sullivan, Amazon’s vice chairman of financial improvement, mentioned it might have been more durable for Amazon to create that form of surroundings had it “sprinkled these employees around 15 other tech hubs or 17 other tech hubs around North America.”

“So what HQ2 has provided is the opportunity for that more in-depth collaboration and being part of a neighborhood,” Sullivan mentioned.

Amazon’s extremely publicized seek for a second headquarters has confronted some challenges. In 2018, Amazon introduced it might break up HQ2 between New York’s Long Island City neighborhood, and the Crystal City space of Arlington, Virginia. But after public and political outcry, Amazon canceled its plans to construct a company campus in Long Island City.

The firm’s arrival in Arlington has generated considerations of rising housing prices and displacement. The firm mentioned it has dedicated greater than $1 billion to construct and protect reasonably priced properties within the area.

Schoettler mentioned Amazon intends to focus a lot of its future development in Arlington and in Nashville, Tennessee, the place the corporate’s logistics hub is predicated. It additionally plans to rent as many as 12,000 individuals within the Seattle suburb of Bellevue, he added.

“I don’t see us getting bigger in Seattle whatsoever,” Schoettler mentioned. “I think that we’re pretty much tapped out there.”

HQ2 has a number of the identical quirks as Amazon’s Seattle campus. There’s a group banana stand staffed by “banistas” and white boards on the partitions of constructing elevators. Amazon has a dog-friendly vibe at its Seattle workplace, which carried over to Metropolitan Park, the place there is a public canine park, and a gallery wall of the canines of Amazon workers. The towers characteristic plant-filled terraces and a rooftop city farm that echoes the texture of the “Spheres,” botanical gardenlike workspaces that anchor Amazon’s Seattle workplace.

Amazon is opening HQ2 at an unsure time for the corporate and the broader tech sector. Many of the largest firms within the trade, together with Amazon, have eradicated 1000’s of jobs and reined in spending following durations of slowing income development and fears of a recession forward.

Companies have additionally been confronting questions on what work seems like in a post-pandemic surroundings. Many workers have grown accustomed to working from dwelling and have been reluctant to return to the workplace. Amazon final month started requiring company workers to work from the workplace not less than three days every week, which generated pushback from some staff preferring higher flexibility.

Amazon tweaked the design of HQ2 across the expectation that workers would not be coming into the workplace each day.

Communal work areas are extra widespread, and there is much less assigned seating, Schoettler mentioned. Employees might solely be at a desk 30% of the day, with the remainder of their time spent in convention rooms, or having informal espresso conferences with coworkers, he mentioned.

“If we don’t come in that day, no one else will utilize the space,” Schoettler mentioned. “And so that way, you can come in, the desk is open and it’s not been personalized with family photos and that type of thing. You can sit down and absolutely utilize the space, and then go off about your day.”

The shift to a hybrid working surroundings has additionally influenced the additional improvement of HQ2. Amazon in March mentioned it had pushed out the groundbreaking of PenPlace, the second part of its Arlington campus. PenPlace is anticipated to incorporate three 22-story workplace buildings, greater than 100,000 sq. toes of retail house and a 350-foot-tall tower, known as “The Helix,” that options out of doors walkways and inside assembly areas for workers surrounded by vegetation.

Amazon will observe how workers work within the two new Metropolitan Park buildings to tell the way it designs the places of work at PenPlace, Schoettler mentioned.

Amazon did not say when it expects to start improvement of PenPlace, however it’s persevering with to maneuver ahead with the allowing and preconstruction course of, Schoettler mentioned.

“We just want to be really mindful, since we’re just opening these buildings, to make sure we’re doing it right,” Sullivan mentioned. “These are large investments for us. We own these buildings, and we want to give them a long shelf life.”