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Amazon's HQ2 in Northern Virginia starts to take shape Inc. first announced its plans for a second headquarters in Arlington, Va., back in the fall of 2018.

Now the hard work begins.

The Seattle-based e-commerce giant, which has said it is investing $2.5 billion in the project and bringing 25,000 high-paying jobs to Virginia, aims to begin construction on the first phase of its "HQ2" by the first quarter of 2020 and complete it by 2023.

Arlington County officials are kicking off an extensive development review process in July for the first phase of Amazon's new headquarters, set to transform a swath of warehouses and surface parking into a walkable urban campus. Design plans unveiled by company officials July 10 show a pair of 22-story office buildings comprising a total of 2 million square feet, surrounded by street-level retail establishments, restaurants, a central green, public open space and other amenities. It will go up on the county's Metropolitan Park site near the Pentagon City and Crystal City Metro stations.

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An artist's rendering shows Amazon's HQ2 project in Arlington County, Va.
Source: Arlington County

Amazon's new home base on the East Coast will eventually comprise 4 million square feet of energy-efficient office space across "National Landing," a combination of Arlington's Pentagon City, Crystal City neighborhoods and the Potomac Yard neighborhood in Alexandria. Extensive county reviews of HQ2's first phase will take place over the rest of the year, culminating with an Arlington County hearing and board vote.

Amazon selected JBG Smith Properties as its partner to develop the new Arlington headquarters. The e-commerce behemoth had originally planned to divide its new second headquarters between Arlington and New York City but scrapped its plans for the New York operations after it faced political opposition to the project. The Virginia Legislature passed a bill earlier this year that provides Amazon with $750 million of incentives over 15 years, and Arlington County provided another $23 million in subsidies.

"The [Arlington] project that was discussed, talked about, and had a lot of media coverage and speculation over the course of a couple of years is now finally coming to fruition and planting a flag," Tom Stringer, a national site selection expert and managing director with consultancy BDO in New York, told S&P Global Market Intelligence. "It goes from something that's theoretical to something that is real and in the ground. ... The ship has been launched so to speak."

Stringer said now it is up to local economic development agencies working with Amazon to keep the HQ2 development schedule on track and ensure that the company's talent pipeline is full as the project gets underway. The new jobs will come with an average salary of about $150,000 in areas such as artificial intelligence, machine learning and software development. New HQ2 employees hired thus far are staying in temporary space in Arlington until the new offices are built.

"The fun part is over; the hard work is starting," Stringer said.

Stephen Fuller, a regional economist who studies the Greater Washington D.C. region, told Market Intelligence that Amazon's optimism about getting started on the first phase by next year is a signal to other businesses and suppliers that the company is "for real and not just blowing smoke."

"There will certainly be more businesses sniffing around, looking for locations," Fuller said. "It will be interesting to watch the other companies that become attracted to Arlington, and Crystal City and Pentagon City because of this."

Matt Mattauszek, Pentagon City/Crystal City planning coordinator for Arlington County, said the company can begin initial demolition and building activities once it gains approvals.

"We don't know what the challenges might be on the ground and what else may change during the review process," he said.

JBG Smith declined to comment for this story.

Stringer said he didn't foresee any major obstacles for Amazon HQ2's first phase, largely because Virginia has been particularly welcoming to the e-commerce giant.

"This has been vetted so much," Stringer said.

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Design details

John Schoettler, Amazon's vice president of global real estate, spoke extensively about the project at a July 10 community meeting in Arlington, saying that the HQ2 campus is designed to be part of the neighborhood that fits squarely within the community, featuring sustainable architecture, varying building heights that taper toward adjacent residential buildings and expanded open space.

He said the designs will also maximize daylight and "create a retail destination" at Arlington's Metropolitan Park site, a multiphase residential-retail project that the county plans to turn into a walkable mixed-use development.

"As the property owner, Amazon has the ability to carefully curate the ground-floor retail to ensure all retail spaces are filled with locally owned and operated businesses," Schoettler said. "As we have done in Seattle, here in Arlington, we will work hard to foster a vibrant retail district."

The company will also promote low parking ratios to encourage employees to walk outside, Schoettler said, adding that Amazon intentionally sized its food operation programs to only serve a fraction of the buildings' population.

HQ2 will also feature storage, showers and lockers for 600 bikes and also include a dog park.

Schoettler said the two office towers in the first phase will be Leadership in Energy and Environmental Design (LEED) Gold certified buildings to lower the campus' carbon footprint and reduce waste.