In late 2015, Brian Kenner, D.C. Mayor Muriel E. Bowser’s deputy mayor for economic development, met Amazon.com chief executive Jeffrey P. Bezos at the opening of a downtown office for the online retailer’s Web services unit.
Little did Kenner know that two years later he would join legions of officials coast to coast in bidding for an Amazon project widely considered the biggest economic development deal in decades.
Amazon launched a bidding war among North American cities last month when it announced that it plans to develop a second headquarters of up to 8 million square feet — enough to accommodate 50,000 workers. At completion, a decade or more from now, it would be 20 times the size of the new headquarters General Electric is building in Boston and 13 times the size of the one McDonald’s is building in Chicago.
The Washington area has advantages over other regions. Kenner cited the city’s highly educated workforce, public transportation and booming neighborhoods.
“What we will always be selling in Washington, D.C., is [that] we are an urban location,” Kenner said. “We are an urban location with transportation and amenities. And over the past 20 years or so that is what people in general, old and young, black and white, have been preferring, to move into or be closely located in urban center. So we think we feel like we speak to not only where we are now but where the advantages are going to be years from now.”
Bezos, the founder of Amazon, also owns The Washington Post. Last year he bought the largest home in the city for $23 million. Amazon’s request for proposals required that bidding cities have airports with direct flights to Washington.
But from a real estate perspective, at first blush the District does not appear to fit the bill. Unlike former industrial meccas such as Chicago, Detroit or Baltimore, there are no sprawling, vacant factories or plants to redevelop. Unlike exurban locations, there is nothing with 100 acres available — another Amazon ask — to be offered. Indeed there is no single available property in the city that could accommodate 8 million square feet without significant zoning changes. Two large federal parcels along the Anacostia River, RFK Stadium and Poplar Point, both come with a catch. RFK is on federal land dedicated for sports and recreation. The District has not prepared Poplar Point for development despite controlling it for a decade.
So Bowser’s economic development team drilled down on four neighborhoods that are already enjoying rapid growth and assembled bids including a mix of public and private sites in partnership with developers. All four offer access to public transit and neighborhood amenities that make them popular with young, highly educated workers.
Since Amazon wants to begin by occupying 500,000 square feet, each location needs to have an available office building or one on the way to completion.
One proposal incorporates properties on both sides of the Anacostia River. Much of the land is around Nationals Park and the new D.C. United stadium, set to open next year, along with some property across the river in Anacostia. Many of the buildings Amazon would occupy are already being plotted by developers in Southeast and Southwest Washington.
Another proposal would incorporate parcels behind Union Station, in NoMa and the area around Union Market. It would provide Amazon immediate access to Union Station and, for bikers, the city’s Metropolitan Branch Trail. Locating here could accelerate the 3 million-square-foot Burnham Place development envisioned for a platform above the train tracks.
Two other proposals may require further shoehorning. The third location envisions putting 8 million square feet completely on Hill East, land the District owns south of RFK Stadium along the Anacostia. Some development has already begun there, but accommodating Amazon would require significant zoning changes and relocation of existing facilities.
A rendering of how Amazon could fit in Northeast Washington. Union Station is on the left. (D.C. government)A final proposal envisions developing a handful of currently occupied sites in the U Street and Shaw neighborhoods alongside Howard University. Among the proposed properties are home to Howard University Hospital, the Franklin D. Reeves Municipal Center and the D.C. Housing Finance Agency headquarters, at 815 Florida Avenue NW.
Washington officials would likely face some hard questions in an interview with Amazon executives. It has become one of the most expensive housing markets in the country, limiting how much existing employers can grow. The Metro system, while still one of the strongest transit systems in the nation, has suffered declines in service and in ridership.
Kenner declined to disclose what the District might offer the company in financial incentives, saying those details would be worked out after Amazon expressed interest. Under Bowser (D), the District has been aggressive in offering taxpayer dollars to corporations, deals that are coming under increasing scrutiny by critics. The District provided a $60 million incentive package to the Advisory Board Co. to remain in the city in 2015.
Chicago, by comparison, typically does not use such incentives, and state rules prevent them in Washington state, which hasn’t stopped Amazon from growing in Seattle.
Bids for the second headquarters are due Oct. 19, and the company said it plans to make a decision early next year.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz.