HQ, too: Amazon’s future in Bellevue could rival Washington, D.C., plans

February 22, 2019 | Puget Sound Business Journal

Amazon’s next big outpost could come to a city that wasn’t even among the finalists for the nationwide HQ2 search last year.

Bellevue, the birthplace of the 24-year-old behemoth, has garnered the kind of interest from Amazon many cities crave. The Seattle-based company is expected to take at least 3.9 million square feet of space in the city east of Lake Washington. That projected real estate footprint in Bellevue is enough to rival Amazon’s planned HQ2 presence near Washington, D.C.

Amazon recently called off plans for a 25,000-employee campus in New York citing opposition from politicians, but it’s clear the company will receive a different treatment in Bellevue, developer Kevin Wallace said.

“Bellevue and the chamber will bend over backward for Amazon,” Wallace said. “Even big boys like Amazon, Microsoft and T-Mobile want to go where they are wanted.”

There are practical factors at play. Simply put, Amazon’s growth in Bellevue isn’t tethered to the HQ2 markers for jobs created.

Still, one thing is certain.

“Amazon wants to go where it’s wanted,” Kidder Mathews regional president Brian Hatcher said.

 

‘Positive, collaborative relationships’

In November, Amazon selected Long Island City and northern Virginia’s National Landing to split 50,000 jobs after a 14-month search for a second headquarters. At the time, Amazon also announced plans to open a 5,000-person office in Nashville.

The about-face in New York, however, demonstrates the complexity in courting Amazon. The jobs Amazon had earmarked for Long Island City will now be redistributed across 17 existing corporate offices and are no longer tied to performance-based incentives.

“For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long term,” Amazon said in the Feb. 14 announcement calling off the New York campus. “A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”

And even if governments ultimately bend to Amazon’s will, there’s no guarantee the company will stick around.

Amazon floated the possibility of subleasing its space in the 58-story Rainier Square tower after the city of Seattle proposed to tax jobs at large companies to fund affordable housing and services for the homeless.

The tax ultimately did not pass, but a well-placed real estate industry source recently told the Business Journal Amazon is moving forward with plans to sublease the building anyway.

In Seattle, the company has more than 45,000 employees and plans to add about 10,000 more workers by the end of 2020. An Amazon spokesman told the Business Journal last week the company will follow through on those plans in Seattle but “nothing further than the growth already planned.” There is no hiring cap in Seattle, he added.

“If there was anything murky at all about Amazon’s future here, which I don’t think there was, (the New York retreat) just solidifies that they’re not going anywhere,” said Chris Bloomquist, managing partner of Seattle-based tech staffing firm Viri Technology.

Growing up in Bellevue

In July of 1994, Amazon officially got its start in a Bellevue rambler that Jeff Bezos was renting. The company’s time in Bellevue was brief, and Wallace said as recent as 2016, Amazon had virtually no presence in Bellevue.

Now they’re on track to be the city’s largest employer. In fact, Amazon would become Bellevue’s largest employer if even half of the company’s real estate plans are realized.

Amazon said it plans to reach 4,500 employees in Bellevue by 2020, though its leased space in the city is enough for 6,900 employees.

The company has already leased more than 1 million square feet in Bellevue.

Amazon has leased three towers in Bellevue, including Expedia’s current 400,000-square-feet headquarters and the 354,000-square-foot Centre 425 building. It also has leased at least 280,000 square feet at the planned Summit III tower nearby, though Amazon has not yet confirmed this.

Meanwhile, real estate industry sources say Amazon is considering property and projects for an additional 2.84 million square feet.

Amazon is the expected tenant for two proposed Vulcan developments: 937,000 square feet at 555 108th Ave. NE and nearly 1 million square feet at 117 106th Ave. NE.

The company is also planning to pre-lease the 647,000-square-foot, two-tower development by Trammel Crow Co., according to sources, and has already put down earnest money to buy the 600 Bellevue property.

The 10-story, 256,830-square-foot Bellevue Corporate Plaza is on the site now, but there’s room for development.

The total 3.9-million-square-foot estimate accounts only for existing square footage in Bellevue Corporate Plaza. Using the rough industry standard of 150 square feet per employee, Amazon’s forecasted presence in Bellevue if all these projects are realized would be 25,826 employees.

A cultural shift

Amazon’s burgeoning presence in Bellevue has occurred alongside infrastructure and zoning changes in Bellevue, allowing building heights to increase to 600 feet from 450 feet.

For now, T-Mobile appears to be Bellevue’s largest employer. The company had 6,200 employees in Bellevue’s Factoria neighborhood as of November. T-Mobile declined to share how many employees the company expects to have if its bid to take over Sprint is approved.

Microsoft also has a large presence in Bellevue but has yet to provide information about its headcount in the city. Expedia, which is currently headquartered in Bellevue, said it plans to move 4,500 employees to the Seattle campus this fall.

“We’re excited about Amazon’s growth potential for the city,” said newly appointed Bellevue Chamber of Commerce CEO Joe Fain, “but policy makers and the business community will continue to have the important conversations about livability, affordability and growth.”

The company’s Seattle high-rise headquarters will be less than a 30-minute light-rail ride from downtown Bellevue with the scheduled 2023 start of service. Amazon became a member of Bellevue Downtown Association when it leased Center 425 in 2016.

“It’s always reasonable for a larger employer to look at the political climate and see where they’ll be welcomed,” Bellevue Downtown Association President Patrick Bannon said. “Bellevue is poised and planned to grow from infrastructure, from zoning, from overall energy and enthusiasm for growth.”

 

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