Six years ago, Amazon launched a sweepstakes-style competition to build a second headquarters. The competition featured 238 states, provinces and cities vying to become the next anchor for the nation’s number one online retailer and second largest private employer.
This week, Amazon officially opened the doors of the first portion of its new East Coast headquarters, dubbed HQ2, in northern Virginia. The first phase, dubbed Metropolitan Park, includes two 22-story office towers that will accommodate 14,000 of the 25,000 employees Amazon plans to hire in Arlington. Around 2,900 employees have already moved in, and 8,000 employees will move into Met Park in the fall.
Amazon established its headquarters in Seattle in 1994, in part due to the region’s large pool of technical talent and Microsoft’s presence in nearby Redmond, Washington. The company’s Seattle campus now spans millions of square feet in more than 40 office buildings, and 65,000 Amazon business and technical associates work in the greater Puget Sound area.
One wonders why Amazon, with its sprawling Seattle campus and growing real estate presence worldwide, needed to build a second headquarters.
Around 2005, as Amazon’s business was growing and its Seattle campus was exploding, founder and then-CEO Jeff Bezos began thinking about where the company should expand next.
During meetings with everyone involved, employees asked Bezos “if we would ever be in one place at the same time,” Amazon real estate chief John Schoettler said in an interview.
“I think there was a romantic notion that we would only be big enough as a company that we could all fit in one building,” Schöttler said. “[Bezos] had said well we have long term leases and if those leases come through I will be working with John and the real estate team and we will figure out what to do next.”
John Schoettler, Amazon’s Vice President of Global Real Estate and Facilities, leads Virginia Gov. Glenn Youngkin through HQ2.
Tasha Dooley
Bezos originally suggested that Amazon stay near Puget Sound, but the conversation then shifted to restoring the “neighborhood feel” of its Seattle campus elsewhere, Schoettler said.
“We could have gone to the suburbs and taken some farmland and cut down some trees, and then we could have built a campus that would have been very inward-looking,” he said. “They generally have a north or south entrance and an east or west exit. When you fit right into the fabric of the city and you create a walkable neighborhood, an 18-hour neighborhood, you have a very outward appearance and you become a part of that community, and that’s what we wanted.”
Holly Sullivan, Amazon’s vice president of economic development, said it would have been more difficult for Amazon to create such an environment if it had “distributed those employees to 15 other technology centers or 17 other technology centers across North America.”
“So what HQ2 has offered is an opportunity for deeper collaboration and participation in a neighborhood,” Sullivan said.
Amazon’s much-publicized search for a second headquarters has faced a number of challenges. In 2018, Amazon announced it would split HQ 2 between the Long Island City borough of New York and the Crystal City borough of Arlington, Virginia. But after public and political outcry, Amazon scrapped plans to build a corporate campus in Long Island City.
The company’s arrival in Arlington has raised concerns about rising housing costs and crowding out. The company said it has committed more than $1 billion to build and maintain affordable homes in the area.
Schoettler said Amazon intends to focus much of its future growth in Arlington and Nashville, Tenn., where the company’s fulfillment center is located. It also plans to hire up to 12,000 people in the Seattle suburb of Bellevue, he added.
“I don’t think we’re going to get any bigger in Seattle,” Schoettler said. “I think we’re pretty exhausted out there.”
HQ2 shares some of the same idiosyncrasies as Amazon’s Seattle campus. There is a communal banana stand with “Banistas” and white plaques on the walls of the building elevators. Amazon has a dog-friendly vibe in its Seattle office, which extends to Metropolitan Park, which has a public dog park and a gallery wall featuring Amazon employee dogs. The towers feature planted terraces and an urban rooftop farm reminiscent of the “Spheres,” botanical garden-like workspaces that anchor Amazon’s Seattle office.
Metropolitan Park is the first phase of Amazon’s new Arlington headquarters, dubbed HQ2.
Tasha Dooley
Amazon opens HQ2 at an uncertain time for the company and the entire tech sector. Many of the industry’s biggest companies, including Amazon, have shed thousands of jobs and reined in spending amid slowing sales growth and fears of a recession.
Companies are also faced with the question of what work looks like in a post-pandemic environment. Many employees have adapted to working from home and are reluctant to return to the office. Amazon last month began requiring company employees to work in the office at least three days a week, which has met with resistance from some workers who prefer greater flexibility.
Amazon adjusted the design of HQ2 with the expectation that employees would not come into the office every day.
Community workspaces are more common and there are fewer assigned seats, Schoettler said. Employees are only allowed to sit at a desk 30% of the day, while spending the rest of their time in conference rooms or at casual coffee meetings with colleagues, he said.
“If we don’t come that day, nobody else will use the room,” said Schöttler. “And so you can come in, the desk is open and not personalized with family photos and such. You can sit and take full advantage of the space and then go about your day.”
Amazon’s HQ2 has some of the same features as its Seattle headquarters, such as a communal banana stand.
Tasha Dooley
The shift towards a hybrid work environment has also influenced the further development of HQ2. Amazon announced in March that it had postponed groundbreaking for PenPlace, 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 tower called “The Helix,” which will feature outdoor walkways and internal employee meeting areas amidst vegetation.
Amazon will monitor the work of employees in the two new Metropolitan Park buildings for information on the design of the offices at PenPlace, Schoettler said.
Amazon hasn’t said when it plans to start development of PenPlace, but the permitting and build preparation process is moving forward, Schoettler said.
“As we’re just opening these buildings, we want to be really careful to make sure we’re doing it right,” Sullivan said. “These are big investments for us. We own these buildings and we want them to last a long time.”