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Amazon closes $198M PenPlace purchase from JBG Smith

Amazon.com Inc. has acquired the 11-acre PenPlace development site,  part of its HQ2, its East Coast headquarters, from Bethesda, Maryland-based JBG Smith Properties for $198 million, JBG Smith announced Monday.

Arlington County in April approved the 3.3 million square feet of office space spread across three 22-story buildings and Amazon’s planned spiral “Helix” building, including 100,000 square feet of retail and 2.5 acres of open space. It is bordered by Army Navy Drive, South Eads Street, 12th Street and South Fern Street. PenPlace is the second phase of Amazon’s HQ2 East Coast headquarters, following the first phase, Metropolitan Park. PenPlace will also have a 20,000-square-foot Arlington County High School and a daycare.

“As we saw with the sale of Metropolitan Park to Amazon in 2020, finalizing this deal allows us to move forward with our partners, realize Amazon’s vision and complete its second home here in the region,” JBG Smith CEO Matt Kelly said in a statement. Metropolitan Park and PenPlace will bring exciting new amenities to the broader neighborhood including public parks, dynamic retail, and infrastructure improvements.”

Metropolitan Park has two 22-story office buildings, 50,000 square feet of retail space, a roughly 2-acre park space and a 700-meeting center that community groups will be able to use for free.

Amazon and JBG Smith also “topped out” the 22nd and final level of Metropolitan Park, JBG Smith announced Monday. The two buildings are scheduled to be completed next year. Amazon’s HQ2 already has 5,000 workers. Amazon’s more than $2.5 billion investment in HQ2 will result in 25,000 jobs over the next decade.

Amazon HQ2 budget, square footage are growing

Nearly three years after Amazon.com Inc. tapped Arlington as the home for its multibillion-dollar East Coast headquarters, construction is well underway, with the global e-tailer already hiring more than 3,000 Amazon HQ2 employees.

Since the project was announced, three numbers have stood out: 25,000 jobs, 4 million square feet of office space and a price tag of $2.5 billion.

However, the latter two figures have grown recently.

An Amazon spokesperson says the company now expects to invest more than $2.5 billion on the massive project, and the campus will include 4.9 million square feet if HQ2’s second phase is approved as-is by the Arlington County Board.

Known as PenPlace, the East Coast headquarters’ second phase is planned to include 2.8 million square feet. HQ2’s first phase — now under construction and nicknamed Metropolitan Park — includes 2.1 million square feet.

Amazon won’t divulge specifics of HQ2’s budget increase, but Telly Tucker, director of Arlington Economic Development, says, “If they’re building more square footage, I would say, naturally, they’re going to have a higher price tag than what they initially anticipated.”

Set to be completed by 2023, HQ2’s first phase will include two 22-story towers, 65,000 square feet of ground-floor retail space, and an expansion of an adjacent park. By early October, concrete crews working for Bethesda, Maryland-based Clark Construction Group LLC had finished the 12th floor of the two office buildings, according to Jeff King, the company’s vice president. Clark Construction expects to complete the concrete work on both Metropolitan Park office towers by spring 2022.

For the PenPlace development, Amazon proposes constructing three 22-story buildings, along with a much-discussed signature spiral structure called the Helix. Aaron Shriber, planning manager for Arlington County, expects that the county board will vote on Amazon’s plan for PenPlace during the first quarter of 2022.

In September, Amazon officials announced they’d already hired 3,000 employees, or 12% of the 25,000-employee minimum the company pledged to sign on by 2030. They hope to soon hire an additional 2,500 employees for HQ2. Not all of those jobs require doctorates in robotics, points out Brian Kenner, Amazon’s head of HQ2 policy.

“We’re one of those sort-of-unique companies that has a variety of different jobs along the educational spectrum,” he says. “I feel like we’ve got job opportunities for everybody.”