The city of Irvine is pulling out all the stops to land Amazon’s second headquarters, including an offer from Irvine Co. to fully finance the development of the 8-million-square-foot project, which would be largely built on its Spectrum-area land.
City and Irvine Co. officials last week unveiled their collaborative pitch to land Amazon’s coveted HQ2 project, a second headquarters for the Seattle e-commerce giant that could potentially bring 50,000 jobs to the area that wins the bid.
More than 100 responses from across North America were expected by the Oct. 19 deadline to Amazon’s RFP, with local bids also planned by a Mike Harrah-led group in Central Orange County and by Huntington Beach in concert with Long Beach in Los Angeles County.
Amazon’s selection is anticipated to come next year.
Irvine likes its chances, despite getting little attention thus far from the national press, which has played up locations like Atlanta, Boston, Washington, D.C., and Austin, Texas, as the most likely landing spots.
A nearly 60-page response to the RFP touts Irvine’s high marks in public safety, education, prospective employees, and a growing base of large companies, among other highlights, and makes the claim that “no other large city in America is as equipped to meet Amazon’s needs.”
Having the backing of the Irvine Co., the largest office owner in the state and the largest privately held real estate developer, operating and investment company in the U.S., doesn’t hurt, either.
“None of them can compete with the unique properties we have,” said Dan Young, project executive for Irvine Co.’s bid and the former president of the Newport Beach-based developer.
Irvine Co. has proposed to build and finance the entirety of the project and provide a “long-term, staggered lease” to the company.
The developer “would be analogous to a long-term bondholder in Amazon,” freeing up for other uses the potential $5 billion in construction costs that Amazon would have to spend elsewhere, the bid said.
While larger in scale than any other project it’s built, HQ2 wouldn’t be out of Irvine Co.’s wheelhouse, Young said.
“It’s what we do for a living.”
In-place property and development rights and existing infrastructure in and around the Spectrum area would also eliminate uncertainty over any future development, a problem likely to affect other bidders, the Irvine bid notes.
Irvine Co. is looking to present itself as “the reliable, responsible partner” in its response to the RFP, Young said.
With entitlements already in place and a well-financed developer ready to offer the bulk of the offices, “no other city in North America can offer Amazon this level of certainty,” said Irvine Mayor Don Wagner in a letter included in the city’s RFP response.
“Our other property owners in the Irvine Spectrum stand ready to help, as well,” said Wagner, noting land owned by FivePoint Communities Inc. at Great Park Neighborhoods that could also be used.
Young said Irvine Co. has been in constant contact with FivePoint and that FivePoint is “enthusiastic” about the city’s bid.
Relatively Cheap
Ongoing affordability issues facing much of Southern California aren’t as pronounced in Irvine compared to other coastal areas, particularly in terms of office space, the city’s bid argues.
Monthly class A office rents there are about $3.10 per square foot, nearly 15% below downtown Seattle, where Amazon occupies about 8 million square feet.
Irvine’s rents are also well below those in Boston, New York, Silicon Valley and other cities likely to make a run for HQ2, the city’s data-heavy bid says.
Irvine Co. and the city’s “one-click HQ2” proposal offers plenty of flexibility for Amazon in terms of office space across the Spectrum area with its mix of midrise and high-rise and existing and new buildings.
The buildings “would be built into the fabric of the city, not pushed to the perimeter like in other major metropolitan areas,” the city’s bid says.
Potential sites for office development include land just off the San Diego (405) and Santa Ana (5) freeways already earmarked for Irvine Co. development.
A few more area high-rise offices are possible if Amazon wants to take that direction, according to the city’s bid and mock-ups of the potential campus.
Existing buildings in University Research Park near the University of California-Irvine also could be used.
Irvine Co. isn’t pushing one product type or Spectrum-area location, Young said. The whole bid “is based on flexibility.”
Bren’s Backing
Amazon has indicated it would likely need about 500,000 square feet of space off the bat. That’s not a problem, Irvine Co. Chairman Donald Bren said in a letter to Amazon’s Jeff Bezos that’s part of the city’s bid.
“If you are ready for immediate occupancy, the first phase is available with the balance of space to be delivered in increments when Amazon needs it,” Bren said.
Irvine’s proposal offers an “HQ2 that is fast, flexible and friction-free, and a long-term decision that will reward you and your employees with countless benefits,” Bren wrote.
Amazon already employs an estimated 1,200 in the Spectrum area; Irvine Co. officials hope their experiences are passed on to decision makers in Seattle as bids are considered.
Young said the best story “will be told by their own office here.”
