Wednesday, 16 May 2018

The Washington Post/Jonathan O'Connell : It’s not just Amazon: Apple quietly explores Northern Virginia for 20,000 workers

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It’s not just Amazon: Apple quietly explores Northern Virginia for 20,000 workers

Apple CEO Tim Cook, discusses the new Apple campus in Cupertino, Calif. The company is now looking for another headquarters for about 20,000 workers. (AP Photo/Marcio Jose Sanchez)
by Jonathan O'Connell May 16 at 12:02 PM Email the author

Apple has quietly explored the idea of opening a campus for 20,000 employees in Northern Virginia, further advancing the possibility that the Washington area could evolve into an East Coast outpost for Silicon Valley.

Apple’s consideration of the region comes eight months after Amazon selected three local jurisdictions there as part of its high-profile search for a North American headquarters outside of Seattle.

Economic development officials under Virginia Governor Ralph Northam (D) proposed several sites for the project after Apple representatives said the company was seeking 4 million square feet of office space to accommodate 20,000 jobs, according to officials and real estate executives familiar with the discussions.

That amount of space is nearly two-thirds the size of the Pentagon and about half what Amazon is seeking for its second headquarters, potentially setting up a competition between the two tech giants for locations where they can attract top workers.

The sites proposed by Northam’s staff for Apple include office buildings and development sites in Crystal City, privately owned Loudoun County land near the Center for Innovative Technology and the Scotts Run development in Tysons.

Two of those locations, Crystal City and the Loudoun land, are part of sites Northam also pitched to Amazon. Both companies plan to make a decision this year.

When Amazon narrowed its search to 20 finalist jurisdictions, it included the District, Northern Virginia and Montgomery County, giving the Washington region more entrants than any other. The project attracted subsidy offers of as much as $7 billion from some states, a frenzy of national media attention, and protests from residents worried about the implications of tech’s growth on housing prices, traffic and inequality.

By conducting its search in relative secrecy Apple has taken a different tact in seeking its new space, something Apple chief executive Tim Cook highlighted in a recent interview when he said “we’re not doing a beauty contest kind of thing.”

Amazon posted its initial search materials online and asked any qualified jurisdictions to apply. It received 238 proposals from around the country and explained to locations that did not make the final list what about their proposals came up short.

[Activists urge Bezos to choose LGBT-friendly state for new headquarters]

“From our point of view, we didn’t want to create this contest, because I think what comes out of that is you wind up putting people through a ton of work to select one, so that is a case where you have a winner and a lot of losers. I don’t like that,” Cook said.

In a subsequent conference call with investors, Cook said the company had begun to focus its search.

“We’ve narrowed the list a lot,” Cook he said of potential locations. “We wanted to narrow it so we prevent this auction kind of process that we want to stay out of.”

Valued at $920 billion, Apple is currently the most profitable company in the world. It completed its new $5 billion headquarters in Cupertino, Calif., nicknamed “the spaceship” for its circular design, last spring. More than 12,000 employees work there, part of 84,000 people who work in the U.S., including at least one in every state and D.C.

Apple said in January that it planned to spend $30 billion on new facilities and hire 20,000 employees in U.S. over the next five years, and company officials said much of that growth will come at a new location outside of California and Texas, home to its two largest hubs.

Apple spokespersons declined to comment on whether Northern Virginia was being considered as a location for the campus. Its representatives have also provided scant information beyond its basic criteria to officials and developers.

“They are much more secretive about their process,” one real estate executive said. Another executive said there was the chance for both research and development jobs as well as call center positions.

There are some indications that Apple may prefer a more suburban setting than Amazon. The newly completed Apple Park, in Cupertino, is built on 175 acres outside of San Jose. Amazon’s headquarters, by contrast, is integrated into Seattle’s downtown. “It’s safe to say they are more of a suburban company,” one official said of Apple.

[After Amazon opposition, Seattle passes compromise tax to fund homeless services]

There are also some connections to the company that could help Northern Virginia’s chances. The Loudoun County land, consisting of 85 acres outside the Innovation Center Metro station currently under construction, is owned by a partnership managed by Mark Masinter, a Dallas retail expert whom Steve Jobs hired in 2000 to help Apple open its first stores.

Masinter’s firm, Open Realty, owns the land in tandem with Dallas-based Rebees, and envisions a 5.5 million-square-foot mixed-use development. Masinter did not respond to requests for comment.

It’s unknown whether Apple has engaged Maryland or D.C. officials in its search but the District mostly lacks space for a large, suburban campus, and two city officials, speaking on the condition of anonymity because they were not authorized to discuss the project, said they weren’t aware of an effort by the District to pursue Apple.

Few other public officials have discussed the project. After Apple made its announcement, Chicago Mayor Rahm Emanuel (D) said “we’re going to compete.” Economic development officials from Fairfax, Loudoun and Arlington counties declined to comment. Spokespersons for Northam also declined to comment.
Jonathan O'Connell covers economic development with a focus on commercial real estate and the Trump Organization. He has written extensively about Donald Trump's business, including how his D.C. hotel has affected Washington and what Trump hotels will mean to the Mississippi Delta. He joined The Washington Post in 2010.
Follow @OConnellPostBiz
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