six years ago, Amazon launched a lottery-style competition to find where to build a second headquarters. The competition drew bids from 238 states, provinces and cities vying to be the next anchor for the nation’s dominant online retailer and second-largest private employer.
This week, Amazon formally opened the doors to the first part of its new East Coast headquarters, called HQ2, in Northern Virginia. The first phase, called Metropolitan Park, includes two 22-story office towers that will accommodate 14,000 of the 25,000 employees Amazon plans to bring to Arlington. About 2,900 employees have already moved in, and Met Park will occupy 8,000 employees in the fall.
Amazon built its headquarters in Seattle in 1994, in part because of the large amount of technical talent and presence Microsoft in nearby Redmond, Washington. The company’s Seattle campus now spans tens of millions of square feet in more than 40 office buildingsand the greater Puget Sound area has 65,000 Amazon corporate and technical employees.
It begs the question why Amazon, with its sprawling Seattle campus and growing global real estate footprint, needed to build a second headquarters.
Around 2005, as Amazon’s business grew and its Seattle campus expanded, founder and then-CEO Jeff Bezos began considering where the company should expand next.
In all-hands meetings, employees would ask Bezos “if we were ever in one place at one time,” John Schoettler, Amazon’s real estate chief, said in an interview.
“I think there was a romantic notion that we as a company would only be so big that we would all fit in one building,” Schoettler said. “[Bezos] he said, well, we have long-term leases, and when those leases come in, I’ll work with John and the real estate team and we’ll figure out what to do next.”
Bezos initially proposed that Amazon stay in the Puget Sound area, but the conversation then shifted to restoring the “neighborhood” feel of its Seattle campus elsewhere, Schoettler said.
“We could go out into the suburbs and we could take some farmland and cut down some trees, and we would build a campus that would be very introspective,” he said. “They generally have a north or south entrance and an east or west exit. When you put yourself in the middle of the urban fabric and create a pedestrian district, an 18-hour district, you become very outside and you become very much a part of the community, and that’s what we wanted.”
Holly Sullivan, Amazon’s vice president of economic development, said it would be harder for Amazon to create such an environment if it “scattered these employees around 15 other technology centers or 17 other technology centers across North America.”
“So what HQ2 has provided is an opportunity for this deeper collaboration and being part of a neighborhood,” Sullivan said.
Amazon’s highly publicized search for a second headquarters has faced some challenges. In 2018, Amazon announced that it would split HQ2 between New York’s Long Island City and the Crystal City area of Arlington, Virginia. But after Amazon’s public and political outcry canceled its plans to build a corporate campus in Long Island City.
The company’s arrival in Arlington raised concerns about rising housing costs and displacement. The company said it has committed more than $1 billion to building and preserving affordable homes in the region.
Schoettler said Amazon intends to focus much of its future growth on Arlington and Nashville, Tenn., where the company’s logistics center is located. It also plans to hire up to 12,000 people in the Seattle suburb of Bellevue, he added.
“I don’t see us getting any bigger in Seattle,” Schoettler said. “I think we’re pretty beat up there.
HQ2 has some of the same quirks as Amazon’s Seattle campus. There is a community banana stand manned by “banners” and white boards on the walls of the building’s elevators. Amazon has a dog-friendly vibe at its Seattle office, which has carried over to Metropolitan Park, where there’s a public dog park and a gallery wall featuring Amazon employee dogs. The towers feature plant-filled terraces and a rooftop urban farm that echoes the vibe of “Spheres,” the botanical garden-like workspaces that anchor Amazon’s Seattle office.
Amazon is opening HQ2 at an uncertain time for the company and the wider technology sector. Many of the industry’s biggest companies, including Amazon, have cut thousands of jobs and reined in spending after periods of slowing revenue growth and fears of a recession.
Companies also face questions about what work looks like in a post-pandemic environment. Many employees got used to working from home and did not like going back to the office. Amazon last month began requiring company employees to work from the office at least three days a weekwhich has drawn opposition from some workers who prefer more flexibility.
Amazon improved the design of HQ2 with the expectation that employees would not come into the office every day.
Shared workspaces are more common and there is less assigned seating, Schoettler said. Employees may only be at their desks for 30% of the day, spending the rest of their time in conference rooms or having casual coffee meetings with co-workers, he said.
“If we don’t come that day, no one else is going to use the space,” Schoettler said. “And so you can walk in, the table is open and it’s not customized with family photos and things like that. You can sit down and absolutely take advantage of the space and then walk out.”
The shift to a hybrid work environment also influenced the further development of HQ2. Amazon he said in March pushed out the groundbreaking PenPlace project, the second phase of its Arlington campus. PenPlace is expected to include three 22-story office buildings, more than 100,000 square feet of retail space and a 350-foot-tall tower called “The Helix” that features outdoor walkways and indoor employee meeting spaces surrounded by greenery.
Amazon will watch employees work in the two new Metropolitan Park buildings to inform how it designs offices at PenPlace, Schoettler said.
Amazon has not said when it expects to begin development of PenPlace, but it continues to move forward with the permitting and pre-construction process, Schoettler said.
“We want to be really careful as we’re opening these buildings to make sure we’re doing it right,” Sullivan said. “These are big investments for us. We own these buildings and want to give them a long life.”