LOIS WEISS: The HQ2 Search Is A Sham. Jeff Bezos Already Knows The Winner.
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I think the search for Amazon’s HQ2 has been a sham from the start and the other 17 locations on the shortlist might as well fold up, go home and realize they were conned.
The triumvirate of Washington, D.C., Montgomery County, Maryland, and Northern Virginia already have a lock on Amazon HQ2, and likely one of those spots has already been chosen, with the other two out there for competition and cover, and perhaps other Amazon future uses.
What makes these sites different from all other sites?
Amazon’s founder and CEO, Jeff Bezos, who bought the Washington Post in 2013, is now building a second home in D.C. Montgomery County and Northern Virginia are connected to D.C. by the Metro system, and are closer to the District than Westchester is to Manhattan.
Now, Amazon certainly knew all this when they sent out the requests. I mean, what a great public relations ploy! Not only do they get the three jurisdictions’ best suggestions, but they tricked them into thinking they were going to have to compete with most of North America.
And those other cities? Well, Amazon does need distribution centers and other offices. Why not see what’s available and what each government is willing to hand out? They may not get HQ2, but in a great bait-and-switch, could get a warehouse or fulfillment center, or even other tech offices.
Getting back to the D.C. area, Bezos is currently restoring two side-by-side mansions that most recently housed the former 27K SF Textile Museum. He purchased the buildings for $23M in cash in October 2016 — a year almost to the day when the HQ2 RFPs were due — and there’s no way he wants to travel far to visit his second major headquarters.
The mansion and chauffeur’s residence at 2320-2330 S St. NW is described as the largest in Washington and is in the favored Kalorama Heights neighborhood in northwest D.C., near Georgetown and Dupont Circle, where Barack Obama and Ivanka Trump and Jared Kushner also recently bought homes. On a 34K SF plot, it has private, formal gardens and a “sweeping lawn with views.”
Bezos and his wife, MacKenzie, have three boys and a girl and live in Seattle near the current Amazon headquarters. This could become both a vacation spot and pied-à-terre for the family, especially if one or two kids end up at a local university. It also helps to maintain the Amazon chief’s privacy by keeping him away from prying eyes in hotels, plus outdoor lovers could hike around Rock Creek Park or kayak on the Potomac River.
To his north, officials in Montgomery County pitched what are believed to be several sites for the HQ2, but only one was identified in a talk with real estate agents by Montgomery County Executive Isiah Leggett: the former White Flint Mall that sits on roughly 45 acres and is owned by Lerner Enterprises and the Abramson family.
The mall is a 40-minute limo ride north along Massachusetts Avenue, Wisconsin Avenue and the traffic-clogged Rockville Pike to and from Bezos’ new home. Located at 11301 Rockville Pike in North Bethesda, White Flint Mall also has a named station on the Red Line of D.C.'s Metro, which also stops at Dupont Circle, about a 10-minute trek from Bezos’ home.
Being along the Metro is important for any future Amazon employees, as they could live anywhere in the area, near any of its six lines. Plus, Amazon’s RFP made public transportation a priority, and its culture is more aligned with the millennials' walk, bike, public transport and Zipcar attitude than prior generations.
The District itself put forth sites by the crowded neighborhood around Union Station; along the Anacostia River, where it is trying to boost businesses near both the Navy Yard and Nationals Park; by RKF Stadium where the Blue, Orange and Silver lines split; and by Howard University in Shaw.
The latter three sites are near working-class neighborhoods. If any are chosen, rather than being praised for providing jobs nearby, Amazon will be accused of taking over the neighborhood, gentrifying, raising home prices and pushing out the poor residents who aren’t educated enough to take these tech-savvy jobs. No good deed goes unpunished.
In Northern Virginia, the Ashburn area of Loudoun County has what has been described as the largest concentration of Amazon data centers. While a bit far, there are also scattered Amazon fulfillment centers, and Northern Virginia is also just across the Potomac River from Bezos’ new house.
Proposed Northern Virginia sites include two in Arlington County: one in Rosslyn and the other in Crystal City — both are high-rise business areas and on at least two Metro lines; Potomac Yard in Alexandria that’s along the river of the same name and could provide some leisurely walking paths; and a state-owned property that already hosts the not-for-profit Center for Innovative Technology on the Fairfax/Loudoun County line, right by the Washington-Dulles International Airport.
This site is targeted to become “a smart growth, transit-oriented development that includes a mix of high-rise research, office, residential and retail establishments.” Arquitectonica designed CIT’s original, colorful glass buildings and it is treed, green and a blank slate. Amazon could share this site and build around the current CIT. But it could also help encourage small startups and boost tech education by helping CIT become more useful to its own future needs.
Amazon’s own website has 406 jobs available in the Metro DC area with the most, 326, in Herndon where it already opened a major Amazon Web Services office. Frankly, not being able to find the talent for those jobs doesn’t bode well for that section of Northern Virginia, but there are two positives that could make it the winner.
Lower-cost housing, under $600K for houses, is also available and within the average Amazon employee’s budgetary sweet spot; and transportation is about to get a whole lot better
The already-underway Washington Metro Silver Line expansion will soon run out to CIT with the aptly named Innovation Center stop; and to Dulles, just a hop across the highway. As capacity and other issues plague the entire Metro system, Virginia has also proposed a $150M infusion targeted to Metro fixes.
Just because millennials aren’t psyched up for certain jobs in Herndon now doesn’t mean the hordes won’t storm the walls of a new HQ2 when, not if, it comes to the area.
Lois Weiss is a Bisnow featured columnist as well as a real estate reporter for the New York Post. She has covered New York City real estate for more than two decades and is a past president of the National Association of Real Estate Editors.