The second phase of construction at Amazon’s second headquarters in Arlington will be put on hold.
“We’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” Amazon Vice President of Global Real Estate John Schoettler said in a statement released to media organizations.
“Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”
Amazon has hired more than 8,000 employees for its Metropolitan Park, or Met Park, campus in Arlington that it plans to open in June.
But the plan for the second phase, called PenPlace, is on hold indefinitely, The Washington Post and other media organizations report. PenPlace would have been 3 million square feet of development just blocks from Met Park.
Schoettler said the company is “always evaluating space plans to make sure they fit our business needs,” and that the space at Met Park will accommodate more than 14,000 employees.
JBG Smith, the developer for both phases of the HQ2 site, said in a news release Friday that the first phase, the 2.1-million-square-foot Met Park, remains on schedule for a summer 2023 opening.
“This project continues to serve as a major catalyst for National Landing’s transformation into a global hub of innovation and a vibrant mixed-use urban community,” said JBG Smith CEO Matt Kelly in a statement. “In addition to welcoming Amazon employees to its new 2.1-million-square-foot headquarters this summer, we are moving eagerly ahead on Virginia Tech’s $1 billion Innovation Campus.”
Kelly said his firm “remains on track to deliver 1,500 new apartments currently under construction in National Landing and expects to welcome 55 new retailers to the neighborhood over the next 18 months alone.”
He credits Amazon’s commitment to the area for the “billions of dollars in infrastructure improvements” that have been made.
Arlington County also released the following statement: “We’re confident Amazon remains committed to the second phase of the project — PenPlace — and its benefits to the community, including affordable housing and the exciting partnership with Arlington Public Schools for the Community High School. We remain committed to working with Amazon in the years ahead, and look forward to the opening of phase one — Met Park — later this year.”
The decision to put PenPlace on hold comes after the biggest round of layoffs in the company’s history. Amazon in January said it would cut 18,000 jobs. An Amazon spokesman tells the Post the decision to delay PenPlace was not related to any job cuts in Northern Virginia. When it came to Arlington, Amazon said it would create 25,000 jobs.
Arlington County Board Chairman Christian Dorsey followed up the county’s statement with a Friday afternoon news briefing. He said that while Amazon has not shared any of its internal plans with the county, the “general uncertainty” of the economy is something all businesses and local governments are looking at.
“If you look at the world, there is a lot of uncertainty about what is ahead. And as we all negotiate the post-pandemic reality, everyone from every sector is thinking about its long-term plans in a new light. And sadly, we don’t all have all of the answers, so it’s not incredibly surprising that Amazon is taking a pause before beginning the second phase,” Dorsey said.
He said it is not disappointing that the second phase is being delayed. In a news briefing Friday, he said the project was already ahead of where Amazon thought it would be. He said the complete buildout is not expected to be completed until 2035.
Dorsey said Amazon has not give a specific time frame for when it will resume the work, but said that Amazon said it would continue to seek county permits this year.
Amazon, according to Dorsey, has given no indication that it would reconsider its terms of the deal, including its commitment to affordable housing.
“There is no retreat from Amazon in terms of fulfilling them because the affordable housing contribution is due with certain phases of permitting with the Phase Two site. There will be further conversation about when they’ll deliver that benefit, but I have heard in unequivocal terms from them that they intend to fully realize their $30 million affordable housing commitment,” Dorsey said.
Feature photo courtesy NBBJ
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