D-FW’s clues are in Seattle
Area could easily absorb huge footprint, but what can viable bidder expect?
Even for a corporate magnet and job engine like Dallas-Fort Worth, Amazon’s call for cities to bid on where it should build its second headquarters, dubbed HQ2, is irresistible. D-FW joins scores of cities and states in the intense competition to lure the e-commerce giant.
The Dallas area holds any number of sites that could fill the bill: a cluster of buildings in Dallas’ newly revitalized central business district, the former site of Valley View Mall in Far North Dallas, or even vacant land south of downtown.
The technology and retail company plans to spend $5 billion over a decade and bring up to 50,000 employees to the site, and with its presence, it promises to remake a region. It’s given government leaders specifications about what it wants, such as proximity to transit, availability of tax incentives and a business-friendly environment.
D-FW is one of the few metropolitan areas that could absorb Amazon’s giant footprint that has come to dominate Seattle’s downtown.
Last year, the population of D-FW grew by 143,000, making it No. 1 in the nation for the sheer number of
people added. Companies are flocking here by the dozens, with the region accounting for 13 percent of net office leasing nationwide in 2016.
Adding Amazon to Dallas’ already impressive lineup of Fortune 500 companies would fast-forward future growth in an instant.
D-FW, long a distribution hub for companies like Amazon and a corporate headquarters for executive ranks, would suddenly become a player in shaping the future of e-commerce. Amazon says it is looking for a site with 100 acres or existing and new buildings totaling 8 million square feet by 2027.
Architect Lance Josal, chairman of CallisonRTKL, said it’s too early to figure out exactly what kind of facility Amazon will build.
“I think everybody is out there racing around trying to think about how they catch the biggest fish in the ocean,” Josal said. “Right now it’s a real estate deal.”
“They have to figure out where they want to be. It will be a lucky city that can attract them.”
But what can that city expect? The answers are probably in Seattle.
Before Amazon moved into downtown Seattle in 2010, like most U.S. cities it had felt the brunt of suburbia’s wideopen spaces having the edge — though there were some efforts to stop the decline. Developer Matt Griffin, principal at Pine Street Group, worked with Seattle-based Nordstrom department store to turn a three-block area into the Pacific Place retail and entertainment center.
That opened in 1998, encouraging young people and baby boomers to move downtown. While that and a few other projects were a start to the resurgence, Griffin said, “when Amazon decided to move, that was like a shot of jet fuel.”
Unlike the self-contained corporate campuses Apple, Facebook and Google have built in Silicon Valley, Amazon founder and CEO Jeff Bezos insisted on an urban campus where any other company building might be across the street.
Amazon’s new buildings in Seattle have cafeterias, but those aren’t subsidized and by design only have the capacity to hold 20 percent of the people who work there. The point is to have 80 percent of its workforce out spending money at the businesses nearby to be sure the environment stays vibrant.
When Amazon moved in from the suburbs with 5,000 employees, it chose an area called South Lake Union — mostly parking lots and old abandoned buildings. That area has turned into a hub of commerce and a low-rise campus setting. Other companies have offices there, and Google is building a facility that will house 4,000 employees.
In 2012, Amazon announced that a new high-rise campus was also in the works, and Bezos insisted it was also in the urban core. Last year, employees started filling the $4 billion headquarters on city blocks that locals considered another blighted area. Two of the three 36-story buildings — the tallest among the other buildings in downtown Seattle that Amazon owns or leases — are finished, and the last one will be completed in 2019.
One of the buildings has an outside dog park on the 17th floor. Amazon is known for its dog culture. On any day, at least 500 dogs come to work with employees.
About 70 percent of Amazon’s Seattle employees live in the city. Fewer than half use a car, and 20 percent walk to work. Many ride their bikes. Amazon built what employees call “bike cages,” which are not only places to store bikes, but also have showers for employees.
Today, Amazon occupies 33 buildings for a total of 8.1 million square feet in downtown Seattle. No building is farther than a 15-minute walk. Its 40,000 headquarters employees working downtown represent a $25.7 billion-a-year payroll.
Amazon pays $43 million a year into the city’s transportation system as an employee benefit. Visitors to Amazon last year required 233,000 hotel nights. The number of Fortune 500 companies with engineering/research and development centers in Seattle increased from seven in 2010 to 31 in 2017.
And Amazon has promised to do it again over the next 10 years somewhere else.
What city wouldn’t want all that? Maybe the question to ask is what city could handle it? Seattle is now a more expensive city. Some don’t like the dominant corporate hold Amazon has on Seattle, which is also home to Starbucks. Microsoft and Costco are in the suburbs.
Throughout the Seattle region, residential and office rents have climbed steadily. Salaries are also higher. Amazon says its average annual compensation for a corporate employee is more than $100,000.
Dallas has never feared growth.
“This is the mother ship of all corporate relocations, and that also means there’s going to be fierce competition for it,” said former Dallas Mayor Ron Kirk, who said the 50,000 jobs are transformative for the whole community.
Kirk was in office when Seattle-based Boeing picked Chicago over Dallas for its new headquarters and 400 corporate jobs. Dallas learned a lot from the Boeing episode, and the city has upped its urban quotient with parks, businesses and residential developments downtown, and new neighborhoods circling the central business district. Amazon’s magic dust would accelerate the momentum in the city.
The Dallas Regional Chamber has said it will be putting together a bid by Amazon’s Oct. 19 deadline.
Before Amazon made its announcement this month and stipulated that mass transit to the site was a requirement, both DART and the North Texas Council of Governments had been working to expand the 143-mile train system.
“For that kind of job creation, it’s worth it for the city of Dallas to do whatever it can for Amazon,” Kirk said. “That’s a positive tax base and 50,000 families helping to transform this community.”
It could even help heal some longstanding wounds, Kirk said, speculating that a location in South Dallas would help close Dallas’ north-south economic divide.
One of the sites being prepared to be included in the Greater Dallas Chamber’s pitch to Amazon is the Dallas Midtown project planned where Valley View Mall is being torn down.
Scott Beck, CEO of Beck Ventures, has been selling Midtown as a place for Dallas to have a location big enough to compete with the suburbs for the big corporate relocations such as State Farm in Richardson and Toyota in Plano.
Amazon Web Services has occupied five floors next door in the Galleria Tower since 2014 and can expand into surrounding office buildings while its first new space is being prepared. Amazon has said it wants to expand into its HQ2 in three phases, with employees starting to move to the new city in 2019.
Midtown’s first phase has 500,000 square feet of office space and may be delivered around the time Amazon said it will be ready for it in early 2020, Beck said. The Valley View site is 100 acres, and Beck Ventures owns 70 percent of it.
The area is part of a 430acre district that the city of Dallas rezoned to accommodate redevelopment that would include office buildings of up to 40 stories. The region is bordered by LBJ Freeway and extends north of Alpha Road, Preston on the east side and west to the Dallas North Tollway.
“An east-west or diagonal light rail line from North Dallas and Plano to Addison is part of our proposed plan,” Beck said.
He estimates that Dallas is one of only a half-dozen cities that can make a valid pitch to Amazon. And each city needs to present Amazon with a few credible opportunities, he said.
“It’s transformational,” Beck said.
“We want to put our best foot forward, and any perceived shortcomings won’t be gaps for long.”
Midtown’s plans include a 20-acre park in the middle. Beck’s already renaming it Amazon Park.
Real estate editor Steve Brown contributed to this report.
Would HQ2 swallow Dallas?