Seattle’s biggest gorilla wants to expand. Is Vancouver a possible site?
Thanks to Tyler Orton in Business In Vancouver.
Amazon’s RFP Overview Excerpt: The Project is a second corporate headquarters (HQ2), at which Amazon will hire as many as fifty thousand (50,000) new full-time employees with an average annual total compensation exceeding one hundred thousand dollars ($100,000) over the next ten to fifteen years, following commencement of operations. The Project is expected to have over $5 billion in capital expenditures as described in more detail in this RFP.
Says BIV:
“It would be a game-changer to have their second office here,” said Glenn Gardner, a principal at Avison Young Commercial Real Estate’s Vancouver office.
Gardner said it’s clear the city is already a good fit from a livability and talent perspective.
“You’re literally a two-hour drive down, you’re a 30-minute flight. Amazon clearly already likes Vancouver, they have a presence here already,” he said . . .
“Amazon HQ2 will be a complete headquarters for Amazon — not a satellite office,” Amazon said in its announcement.
It’s a major understatement to say that this is a large opportunity. And to my thinking, it strains Vancouver’s ability to deliver. And it dwarfs bridge and dam construction, from a jobs and overall economic point of view, since many of the jobs will be sourced locally. The selection criteria are tuned well to the values held in many quarters in Vancouver.
From the RFP:
Capital Investment: The Project could be over $5 billion in capital investment over the initial 15-17 years of the Project. Please note the capital investment required to acquire and retrofit an existing building is dependent upon the condition and nature of that building. As such, the following capital investment estimates will vary depending upon site requirements and actual construction costs, particularly with respect to an existing building.
Building Phase & Estimated Capital Investment
- Phase I Building (500,000-1,000,000 sf) $300,000,000-$600,000,000
- Phase II Building (1,000,000-2,000,000 sf) $600,000,000-$1,260,000,000
- Phase III Building (2,000,000-3,000,000 sf) $1,260,000,000-$1,985,000,000
It’s hard to believe that Vancouver would be in the top 5 cities they’re considering. We’re close enough to Seattle that people can easily get wooed to the mother ship, and we have a local office to pull in talent. And frankly, even if there was an office, I’m not sure if they could staff it adequately given the size of the talent pool here.
I doubt downtown Vancouver would have the space to build 8 million sq ft of new office space for Amazon.
Remember that most of the sites east of Seymour St. are limited by 300ft view cones.
Most of Amazons new buildings in Seattle are much taller than that – 520-530 ft tall (37-38 storeys) – which are all taller than the tallest office towers in Vancouver.
http://skyrisecities.com/database/projects/amazon-towers
That said, if the Lower Mainland remains a candidate despite proximity to Seattle, downtown Surrey could be a candidate for a new highrise campus.
No need to be downtown. Plenty of land near border. There are already to many jobs i downtown which is why there is congestion on both the roads & skytrain . The C O V needs more housing & The suburbs need more jobs .so residents don”t need to travel long distances to there jobs.
The MSA “Vancouver” might imply cities further south or east, closer to the border such as Surrey, Abbotsford or Langley.
Amazon generally pays very poorly. I’d be very surprised if the average HQ salary is $100,000.
It is really fishing for lots of incentives such as low low rent for 2 decades.
In the US many locales come to mind: TX, AZ, GA, SC .. lower wages and cheaper land, thus lower real estate prices and/or rents. In canada, Calgary and Edmonton is probably better too in terms of office availability and prices per sq ft.
I can’t imagine a lot of potential employees would be thrilled when they investigated Vancouver’s outrageous housing prices. Oh well, at least our Lamborghini dealers are happy.
By the time they finish playing the politicians for economic incentives, the city that wins will lose.
Be careful what you wish for. You got 50k unemployed skilled workers over there? Either these are new workers or will cannibal-ize existing new economy firms. Your neighbourhoods are up in arms (almost literally) over population and economic growth as it is. Analyze the range of consequences (unintended and knowable now) and don’t offer incentives before you do.
Amazon have put out there a very ambitious idea of the amount of job space they want to establish. Whether Toronto, Vancouver or another city, that is challenging to accommodate in a downtown or somewhere in the suburbs. I also know that the IT firms that have moved or grown their workforce into downtown Vancouver, including Amazon, Sony, Microsoft, Telus, they chose downtown, rather than suburban locations because their employees wanted to be in the centre of our city where there are shops, restaurants, people walking, nightlife, places, transit, neighbourhoods etc that their employees want to be close to.
So wherever Amazon wants to locate 50k employees and 8 million sq ft of office space, it’s a very challenging idea to locate that and also it be a place their employees want to be, live and enjoy day to day. In any case, whether Downtown Vancouver, Mt Pleasant, Surrey City Centre or other places, it’s an we may be pondering here. It’s just a lot of job space and has impacts and opportunities….let’s see where it goes either here, there or somewhere else. No doubt many should weigh in on this.
In order to meet the lifestyle goals of IT workers (with the required proximity to rapid transit), I think that they’d be looking for a city with a district that’s in an earlier stage of revitalization that any within the City of Vancouver.
i.e. a district with a sea of parking lots or underutilized light industrial buildings ripe for redevelopment.
Vancouver’s downtown south would have fit the bill in the early 1990s (as Seattle’s South Lake Union did for its Seattle campus) – but we are too late in downtown Vancouver’s development cycle to accommodate such a behemoth.
The only large remaining greenfield/brownfield(!) location within downtown Vancouver would be NEFC, which would require a reversal of current plans.
Seems that every city in Canada and US is being shopped for best real estate deals and tax breaks, for example Edmonton. In Edmonton Journal http://edmontonjournal.com/business/local-business/edmonton-to-bid-on-tasty-morsel-5-billon-amazon-headquarters
When you start ticking down the checklist in the RFP it’s clear that Vancouver offers a lot that will put it on the shortlist. I think the city could cobble together a very attractive proposal. In fact, with the massive economic benefits of such a large employer, the city would be bereft not consider partnering up with the province, Metro and the business community to land this opportunity.
There is nothing that dictates this must be a high-rise campus. A mid-rise campus would in several respects open up the field of well-connected sites. I believe a cluster of three to five blocks in the Mount Pleasant light industrial zone would work very well, depending on the results of negotiated density and height. Half of Amazon’s requirements are about the campus’s place in the community and its connectivity.
All the transportation needs listed can be met with the Canada Line, the forthcoming Broadway Subway and the arterial grid. The rapid transit lines place the entire Burrard Peninsula and Richmond within a 30-minute commute. The hub station planned at Broadway and Cambie along with a new Main & Kingsway station and the existing Olympic Village Station are within a 5-minute walk. There is no reason tech workers and office staff could not live in the cheaper condos of Brentwood, Lougheed, Metrotown, New Westminster, Coquitlam Centre or even Surrey and the North Shore’s Lonsdale. The Broadway Corridor is already the region’s second downtown with respect to job and office space numbers.
The Greenest City Action Plan (warts and all), the bike infrastructure, the proximity to the SE False Creek district heating network, café culture, the city’s orientation to fostering energy conservation and promoting green buildings and other initiatives seem to dovetail well with the RFP and the Amazon staff culture. The city’s engineering services already exist in every block, which would tend to counter suburban highway-oriented greenfield locations very well. Universities abound. Downtown and YVR are minutes away.
Finding 50,000 workers will be a challenge, but with 2.5 million people in the region, 14 million in Western Canada and another 17 million in Central Canada, plus healthy immigration, skilled workers and training programs could be sought with assistance from the feds. Canadian single-payer public healthcare is one of the largest economic attractors because employer’s private health benefit packages are smaller and cheaper than the U.S. and usually focused on extended benefits while skipping basic coverage. Hiring Canadians is therein profitable.
I suggest that the geometry of Mount Pleasant also works, even eventually for 744,000 m2 (8 million ft2) of office space. Looking at basic building envelops, each half block offers approximately 4,400 m2 of land, or 8,800 m2 per block, excluding the lanes. Deducting the inevitable internal open spaces, setbacks and so forth, a block with 5-storey buildings could offer over 35,000 m2 of floor area. A block with a mix of building heights averaging 12 storeys could offer about 85,000 m2. There aren’t many heritage buildings in this low-rise industrial and retail zone, or large existing buildings, so creating a land assembly from cheaper and smaller warehouse and showroom buildings shouldn’t present an insurmountable hurdle. Protecting the few Edwardian heritage houses may be a stumbling block, but in a larger planning process they could be clustered together as part of the campus. I suggest an Amazon campus would be best suited for frontage on Broadway east of Cambie with building heights stepped down to the north. One of the hurdles will no doubt be the debate over rezoning the land for higher buildings.
Amazon is clearly looking for incentives, and Vancouver offers almost everything except cheap land. However, in a weighted evaluation process the other advantages of Mount Pleasant, notably its connectivity and central location, will tend to counterbalance land prices. The land price issue is even more prevalent in places like San Francisco and NYC, so Vancouver will compete well on the price front with several other proposals, but of course not all. One advantage Vancouver has is its own land bank, and it shouldn’t be considered unreasonable that it could build publicly-owned and stabilized market rental housing for all, including Amazon employees. Another advantage the city has would be to encourage Amazon to build some of its own employee rental housing through bonus density. There was a time when access to company housing came with company employment in many communities.
Lastly, the proposal should clearly outline what the city expects from Amazon. This would be a two-way relationship and the city needn’t be afraid to speak up respectfully. There should be some creative thought placed on corporate-supplied social and community benefits from the city’s perspective. Some cities will subsidize large corporations extensively to attract their presence and economic gravity. I think Vancouver is mature enough to outline its expectations for mutual accommodation and public responsibility along with a reasonable incentive package.
This is not some boom and bust resource scheme, like LNG and raw resource exports, but a potential long-term opportunity to expand our modern economy which will be increasingly urban. These jobs and corporate presence will create a measureable return on large public expenditures such as the Broadway Subway and help lift the city’s functioning efficacy.