Amazon earns approval for its first new HQ2 construction in Arlington

Amazon earns approval for its first new HQ2 construction in Arlington Inc. (NASDAQ: AMZN) just won approval for its first new construction in Arlington, earning the right to start work on a pair of massive towers in Pentagon City.

The Arlington County Board unanimously approved Saturday a slew of zoning changes and permits tied to the tech giant’s plans for a new development at Metropolitan Park, seven months after Amazon first submitted its application. The vote represents the most meaningful hurdle the Seattle company has cleared in setting up a second headquarters since county officials approved an incentive agreement in March.

“Boy, have we come a long way since March,” said Board Vice Chair Libby Garvey. “This is an important first step for us, and for our relationship going forward.”

Although the company has already leased space in Crystal City, this project is aimed at helping Amazon ramp up its office capacity and house an influx of thousands of new workers in the coming years. The Met Park development is set to include two, 22-story mixed-use towers. The site is currently home to a large warehouse on South Eads Street that served as a gathering place for local officials to celebrate Arlington winning HQ2 more than a year ago.

The project will span 2.1 million square feet in all, including more than 69,500 square feet of ground-floor retail and an underground parking garage for both buildings that will house roughly 1,900 spaces. Amazon will formally purchase the Met Park site from JBG Smith Properties (NYSE: JBGS) now that the entitlement process is wrapped up, and the Bethesda company will serve as Amazon’s development partner on the project.

When it’s completed, the development will become one of the largest in all of South Arlington. Accordingly, Amazon offered up a variety of community benefits in exchange for being able to move ahead with such dense construction, including the single largest contribution any developer has ever made to Arlington’s affordable housing loan fund: $20 million. The company could send that money to the county’s Affordable Housing Investment Fund gradually, or provide it as a lump sum to fund a specific project, according to county staff.

While that offer, in particular, won plaudits from the County Board and other community leaders Saturday, some opponents called on Arlington officials to press for more from the company, given the potential effects of thousands of the company’ workers on the neighborhood’s already challenging housing market.

“We now have the pleasure of paying millions of dollars to a trillion-dollar company owned by the world’s richest person,” said Tim Dempsey, an organizer with the progressive group Our Revolution Arlington. “Please advocate for us, not for Amazon.”

Dozens of local union members also attended the meeting to highlight a recent report by the Eastern Atlantic States Regional Council of Carpenters. That report alleged a variety of labor law violations by contractors at Amazon’s office space in Crystal City and three other locations in Northern Virginia. The union members warned that similar practices could emerge as Met Park is constructed.

JBG Smith executives told The Washington Post that the company has yet to review those allegations. John Schoettler, Amazon’s chief real estate executive, assured the board Saturday that Amazon responded swiftly to those claims, suspending all of its business nationwide with the labor broker and the subcontractors involved.

He said the company hopes to meet with the workers who have documented abuses on the job site and has hired a third-party firm to monitor its subcontractors for any potential violations at all of its properties moving forward, including Met Park. Schoettler added that Amazon will rely on that firm to ferret out any issues, rather than striking a project-labor agreement with local unions, as some labor organizers had hoped the company would.

“Issues such as wage theft and payroll misclassification are still new to me, as we’ve never experienced those issues in Seattle,” Schoettler said. “But we are firmly committed to getting this right. … I want to put the construction industry on notice that this is super important to us.”

Those issues aside, the board advanced the Met Park project without much in the way of controversy, arguing that the company would help the county achieve many of its goals for improving the Pentagon City neighborhood.

Perhaps most notably, Amazon is planning to invest close to $14 million in expanding the park that lends its name to the development, adding about 36,000 square feet of open space to Met Park. That will include two new plazas — one at each building. Brian Earle, a principal at ZGF Architects working on the project, added that the company would be open to including space for a playground and dog park as well, two amenities long desired by the community.

Amazon said it also hopes to include a 12,000-square-foot child care center as part of its retail offerings, and will now work to find a private operator for it. As for the rest of the retail, to be located along South Eads Street, company officials have pledged to work with local businesses and perhaps offer reduced rents to lure small companies.

When it comes to transportation improvements, Amazon is promising to build three new bus islands and shelters, some new protected bike lanes on adjacent streets and even some entirely new streets cutting through the property. In general, the company has pledged to push its workers to use public transit given the area’s traffic challenges, in part by offering transit subsidies and by charging employees for parking.

The company has made other environmental concessions when it comes to energy efficiency. It’s now committed to reaching LEED Platinum status at Met Park, even though it initially planned only for LEED Gold — discussions about achieving “net zero” energy at the buildings, however, have not yet borne fruit, though the company does hope to rely on 100% renewable energy at Met Park by 2030 in alignment with CEO Jeff Bezos‘ climate goals for the company. The board also convinced the company to agree to report on its progress toward that goal as a condition of winning the site plan approval for Met Park.

If all goes as planned, Amazon hopes to have the Met Park buildings finished by the first quarter of 2023. Simultaneously, the company will pursue its other major construction project in Pentagon City: office space at Pen Place, a 10-acre site just north of Met Park and closer to Army Navy Drive that will serve as the beating heart of HQ2.

Amazon has yet to submit plans for that site, though company officials have previously pegged a delivery date between 2025 and 2027.