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The top property owner in the so-called National Landing area (Crystal City, Pentagon City and Potomac Yard) just revealed plans for a new office building, just down the street from Amazon’s planned HQ2.
The building at 101 12th Street S. will replace a sparsely-used open green space the company owns near Long Bridge Park, on the northern end of Crystal City. The development is expected to include a nine-story “trophy” office building with 5,000 square feet of street-level retail, underground parking and a new “expansive park space.”
In a press release, below, JBG says the plans are part of its “ongoing collaboration with Arlington County and private sector partners to deliver a mix of new housing, retail, office, and public spaces to National Landing – the site of Amazon’s new headquarters.”
The developer envisions the area as a gleaming “18-hour” neighborhood, counter to its former image as a dull concrete canyon of aging offices and apartment buildings, with little nightlife to speak of.
More from the press release:
JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today announced that it has submitted plans to Arlington County for the development of approximately 235,000 square feet of trophy office space and approximately 5,000 square feet of street-level retail at 101 12th Street, the proposed new address for the building. The current plan calls for a nine-story building, underground parking, and expansive park space on vacant land that JBG SMITH owns.
The submission is part of JBG SMITH’s ongoing collaboration with Arlington County and private sector partners to deliver a mix of new housing, retail, office, and public spaces to National Landing – the site of Amazon’s new headquarters.
101 12th Street is anticipated to follow 1900 Crystal Drive and RiverHouse Apartments, which are already moving through the entitlement process, and approximately 2.6 million square feet of development, which was submitted last month. In the aggregate, these projects constitute over half of JBG SMITH’s 6.9 million square foot Future Development Pipeline in National Landing. Based on current plans, JBG SMITH expects the 6.9 million square feet to comprise approximately 2.2 million square feet of office and 4.7 million square feet of multifamily, totaling approximately 4,000 to 5,000 units, which will all have ground floor retail.
In addition, 1770 Crystal Drive and Central District Retail are both currently under construction. JBG SMITH is also serving as the fee developer for Amazon’s new headquarters and the master developer for the Virginia Tech Innovation Campus, all located in National Landing.
Designed to serve as a gateway between Long Bridge Park and the north-end of National Landing, 101 12th Street’s prominent eastern façade and ninth-floor terrace are expected to provide dramatic views of the DC skyline, the National Mall and monumental core, and Reagan National Airport.
JBG SMITH’s submission contains several community benefits including open space, a new expansive park, and street-level retail. A fitness center, first floor terrace, and the ninth-floor terrace will serve as amenities for the future tenants of the planned office. Keeping with JBG SMITH’s plan to foster a vibrant, architecturally distinct environment in National Landing, 101 12th will be layered with gleaming stainless-steel shingles on the 12th and 10th Street frontages to present a complementary variation against the design of surrounding buildings.
“The various development opportunities that JBG SMITH has submitted to Arlington County over the last year will work in tandem to create a more robust, 18-hour environment in National Landing,” said Bryan Moll, Executive Vice President at JBG SMITH. “The building at 101 12th Street is an important piece of the larger transformation, and we look forward to working with the County to review and refine our proposal.”
Renderings courtesy JBG SMITH/TMRW Studios, photo via Google Maps
Amazon and JBG Smith could one day brush off the dust on Arlington’s long-underused dark fiber network.
The Arlington County Board was scheduled to vote on issuing a non-disclosure agreement (NDA) for the tech giant and developer to discuss the “ConnectArtlington” network during its meeting this Saturday, November 16.
The network currently provides internet service to many county buildings, but was once promised to be a way for local businesses and organizations to also access access high-speed internet at faster speeds and cheaper rates than available from larger commercial providers like Verizon.
“The purpose of this item is to discuss the County’s Fiber Optic Network ‘ConnectArlington’,” said Jack Belcher, the county’s chief information officer, when asked for more information about the County Board item.
“An NDA is necessary as the fiber network and its location is considered critical infrastructure of the County,” he added.
Arlington previously spent $4.1 million building the 10-mile underground cable network. But in February, an ARLnow investigation revealed that almost no businesses were able to license the network due to “flawed” legal requirements.
A spokeswoman for Amazon told ARLnow that the county had included the dark fiber network in its pitch for the company’s second headquarters, and that the upcoming County Board vote was “just part of exploring everything that Arlington had included in the original proposal.”
— Chris Slatt (@alongthepike) November 9, 2019
“We don’t have specifics to share about our ongoing discussions but look forward to learning more about the program,” the company spokeswoman told ARLnow, adding that the NDA will allow the county to “fully brief” Amazon about the capabilities of the network.
However, the exact details for how Amazon and JBG Smith could use the network are murky.
“Agenda Item #18 was removed because the County wasn’t able to get feedback yet from the company,” said county spokeswoman Jennifer Smith.
JBG Smith declined to comment when asked for more information about the company’s interest in the network.
And as of today (Wednesday) at 12:30 p.m., the agenda included no staff reports to the Board with more information about the items. Smith said the documents had not been uploaded due to a “technical issue” and were due to be published later today.
As for other organizations looking to “light” the dark fiber network?
“Parties are able to use the fiber network and we are in negotiations with several entities today to also use it,” Belcher said.
Nearby, Alexandria is putting out a bid to build its own dark fiber network as well.
(Updated at 11:45 a.m.) As the development plans stack up for Crystal City and Pentagon City, the need for a new school could be growing.
As plans progress for Amazon’s second headquarters, developer JBG Smith has submitted its own plans to the county proposing to build thousands of additional apartments (and potentially condos) in the area, to help house the tens of thousands expected to one day work at HQ2.
JBG Smith’s plans for Crystal City and the Pentagon City area so far include adding:
- About 1,000 new housing units at the RiverHouse development
- 790 units in two new structures at 1900 Crystal Drive
- 762 units in its towers planned on S. Bell Street
- 752 units at its two connected, V-shaped towers planned for 2525 Crystal Drive
- 645 units along 23rd Street S.
While apartment buildings catering to younger workers are unlikely to generate an abundance of students — in 2015 it was reported that the entire 1,670-unit Riverhouse complex in Pentagon City only housed 30 Oakridge students — the redevelopment plans are still raising an eyebrow among those monitoring school capacity issues.
Local officials tell ARLnow that there are no specific plans in the works for building a new school to accommodate new students in the area. There has been past discussion, however, of Vornado (now JBG Smith) providing a site for a new school.
“As of this moment, [Arlington’s planning department] has not had any discussions with JBG Smith about any of their pending applications regarding providing a school site,” a county spokeswoman when asked whether there are current school-related discussions with the developer.
In an interview with the Washington Business Journal, Arlington County Board Chair Christian Dorsey said that in exchange for approving the massive developments, the county could ask JBG Smith for a package of “truly transformative community benefit improvements.”
Dorsey did not immediately respond to a request by ARLnow to clarify what might be included in such a package.
“APS has discussed an elementary school in that area in the past,” said school spokesman Frank Bellavia, when asked if Arlington Public Schools was considering adding a new school to the area.
“Specifically, the South Arlington Working Group had identified the Aurora Highlands neighborhood,” which is adjacent to Pentagon City and Crystal City, as a potential site, Bellavia said Thursday. “We are in the process of working through our future seat needs and will most likely need elementary seats in that neighborhood.”
Prior to its merger with JBG Smith, Vornado had given APS a tour of vacant office space it owned nearby which could be converted into a school.
APS will be updating its facilities plan in early 2020 as part of the county’s 2021-30 Capital Improvement Plan (CIP), according to Bellavia.
A spokeswoman for JBG Smith said the developer is “working with the County but it’s too early to discuss the community benefits package.”
Two new, towering buildings have been proposed for the northwest corner of the intersection of Crystal Drive and 23rd Street S.
The pair are part of JBG Smith’s massive mixed-use development in Crystal City, which includes thousands of new apartments across five new buildings, along with a new office building. With Amazon’s HQ2 staffing up, the large-scale redevelopment could help house thousands as new workers flock to the area.
The new plans call for a pair of towers on 2000 and 2001 S. Bell Street with 762 housing units and 54,215 square feet of retail space. And on 2525 Crystal Drive, JBG Smith is planning two connected, V-shaped towers with 752 housing units and 59,000 square feet of retail — an unusual design rolled out months after critics called designs for Amazon’s nearby permanent HQ2 “unambitious.”
Two towers on 23rd Street S.
It calls for JBG Smith to demolish the existing 11-story “Crystal Plaza 5” office building at 223 23rd Street S. and the one-story retail building that currently houses celebrity Chef José Andrés’ award-winning Jaleo restaurant.
One part of the site is reserved for the “West” tower at 223 23rd Street S., which will stand 31 stories tall and house 645 apartment units as well as 20,000 square feet of retail space on the ground floor. The majority of units in the building are slated to be smaller-sized one bedroom apartments (215) but plans indicate the West tower will also include 75 two-bedrooms.
On the roof, the development will feature a swimming pool with lounge chairs, some artificial turf, and greenery.
The ground floor will include 1,850 square feet of bike storage with room for 276 bikes.
An office tower along Crystal Drive
A second building on the same site — the “East” office tower at 2300 Crystal Drive — will be 24 stories tall, plus a penthouse space. Instead of residential space, the East tower will feature 520,000 square feet of office space and 15,000 square feet of retail space.
Renderings reviewed by ARLnow indicate the office tower will have floor-to-ceiling glass panels installed from top to bottom, framed with burnished bronze.
The ground floor will include four retail spaces totaling 15,071 square feet, as well as 1,000-square-foot bicycling parking area. In total, the bike facility is slated to include 88 bike parking spaces. Building tenants, including cyclists, can expect to have access to 176 lockers and 12 showers.
The building is also expected to include lounge space on its narrow, step-style roof, with terraces featuring furniture and greenery.
Some Added Green Space
While JBG Smith’s plans paint the picture of a thoroughly urban Crystal City, looking more like the downtown of a major city than a suburban enclave, it also includes at least a bit of extra green space near the 23rd Street towers.
To the west of the 223 23rd Street S. residential tower is a new, tiny strip of parkland, replacing at least a portion of what’s currently a driveway and a planter wall next to the WeWork building at 2221 S. Clark Street.
Diagrams show new trees planted along the green strip, with a walkway down the middle.
Image 9 via Google Maps
A preliminary site plan filing reviewed by ARLnow includes a 688,223 square-foot residential development in Crystal City — a pair of towers at 2000 and 2001 S. Bell Street — replacing an existing building at 2001 Richmond Highway and an adjacent parking lot.
That’s in addition to four other new, planned buildings — at 223 23rd Street S., 2300 Crystal Drive, and two towers at 2525 Crystal Drive — that were announced late Tuesday afternoon. In all, JBG Smith announced five new residential buildings and one office building — “all within a half mile of the Metro and Amazon’s new headquarters.”
The two S. Bell Street towers will be located across the street from one another on a new, re-aligned portion of Clark-Bell Street, bounded by 20th Street to the north and the newly renamed Richmond Highway to the west. The proposed buildings include a combined 762 housing units and 54,215 square feet of retail space.
Attorney Kedrick Whitmore of Venable LLC submitted JBG Smith’s site plans. In a letter, Whitmore wrote that the new development will bring an “infusion of new residents and mixed uses” that will “activate the existing fabric of Crystal City.”
Whitmore also noted new residents will create a stronger market for the retail spaces, which are struggling countywide to attract tenants.
The West tower’s units are a mix of one bedrooms (105), two bedrooms (69), and three bedrooms (39) with the majority being a smaller-sized one bedroom unit (145.)
Next door at 2001 S. Bell Street, JGB Smith is planning a 26-story tower with 403 units and 34,243 square feet of retail. This east tower will feature studio apartments (65), smaller-sized one bedrooms (155), regular one bedroom units (84), and two-bedroom units (99.)
Together the buildings will be served by a two-story underground parking garage with 314 spaces for cars.
JBG Smith’s attorney noted that the developer would be demolishing 185 existing parking spaces on the lot and adding 444 for an overall increase of 259 spaces — and resulting in a final parking ratio for cars of 0.34. The garage is also slated to include 330 bicycle parking spaces.
Coming between the two towers would be a new, merged S. Clark and S. Bell street, which is part of the Crystal City Sector Plan’s goal “to form a new north-south street between Jefferson Davis Boulevard and Crystal Drive.”
Arlington began demolishing the the S. Clark Street bridge over 18th Street S. in June as part of a larger $6 million project to bring Clark Street down to ground level and re-align the two streets together.
JBG Smith is proposing a new pedestrian walkway to the new street which wraps around the east tower.
The developer also submitted plans for an additional pair of buildings on the northwest corner of 23rd Street S. and Crystal Drive.
JBG Smith’s attorney wrote that the plan for the buildings will “include significant site improvements, including (but not limited to) partial implementation of realigned Clark-Bell Street, improved onsite circulation, street and sidewalk improvements along segments of 23rd Street and Crystal Drive, new interim public open space, and new infrastructure.”
Whitmore noted that the developments align with the Sector Plan‘s overall goals of transforming the area into an an “18-hour” neighborhood where people can work, live, and go out.
Also included in the new development plan are two towers at a listed address of 2525 Crystal Drive, which seemingly corresponds to the location of the JBG Smith-owned Crystal City sand volleyball courts and workout park, next to an off-ramp from Reagan National Airport.
Additional details on the new developments, however, including renderings and maps, were not immediately available due to confusion at the permit office caused by the county’s new digital permit submission system.
According to two permit staffers, JBG Smith did not correctly submit the site plans to the online system, resulting in the need for re-submission this (Wednesday) afternoon. Renderings of the new buildings and landscaping maps were also not publicly available by Tuesday afternoon.
JBG Smith’s latest slew of projects are in addition to its other plans in Crystal City and Pentagon City — which include redoing an office building (1770 Crystal Drive), adding new apartments to the Riverhouse complex, and building twin apartment towers at 1900 Crystal Drive.
Street View photo and map via Google Maps. Renderings via JBG Smith.
Property owner JBG Smith announced late Tuesday afternoon a major new redevelopment push in Crystal City in the wake of Amazon’s arrival.
The developer says it is planning to redevelop “approximately 2.6 million square feet of space across five multifamily buildings and one office building.”
“The buildings include 2000 and 2001 South Bell Street (formerly 2001 Richmond Highway), 223 23rd Street, 2300 Crystal Drive, and 2525 Crystal Drive, which are all within a half mile of the Metro and Amazon’s new headquarters,” the company said in a press release.
That’s addition to JBG’s existing plans to renovate an office building at 1770 Crystal Drive, add new apartments to the Riverhouse complex in Pentagon City, and build twin apartment towers at 1900 Crystal Drive.
“The submissions are part of JBG SMITH’s ongoing collaboration with Arlington County and private sector partners to deliver a mix of new housing, retail, office, and public spaces to National Landing,” says the press release. “This is an important step toward delivering additional housing units and retail amenities in National Landing, which will help meet anticipated new housing demand and mitigate upward pressure on rents.”
JBG said it plans to offer a community benefit package to include new open space and infrastructure upgrades as part of the redevelopment.
“While the final benefits will be determined through a collaborative process with Arlington County, the package is anticipated to include the creation of new public open spaces, improved pedestrian circulation, and transportation upgrades,” the press release said.
A map of the redevelopment (above) released by JBG Smith also references planned upgrades to Route 1, which may include removal of overpasses near the Crystal City Metro station.
Reached by phone, a spokeswoman declined to comment further, referring ARLnow to the press release.
The full release is below.
JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today announced that it has submitted plans to Arlington County for the redevelopment of approximately 2.6 million square feet of space across five multifamily buildings and one office building. The buildings include 2000 and 2001 South Bell Street (formerly 2001 Richmond Highway), 223 23rd Street, 2300 Crystal Drive, and 2525 Crystal Drive, which are all within a ½ mile of the Metro and Amazon’s new headquarters.
The submissions are part of JBG SMITH’s ongoing collaboration with Arlington County and private sector partners to deliver a mix of new housing, retail, office, and public spaces to National Landing. These projects are anticipated to follow 1900 Crystal Drive and RiverHouse Apartments, which are already moving through the entitlement process. Taken together, these projects constitute over half of JBG SMITH’s 6.9 million square foot Future Development Pipeline in National Landing. Based on current plans, JBG SMITH expects the 6.9 million square feet to comprise approximately 2.2 million square feet of office and 4.7 million square feet of multifamily, totaling approximately 4,000 to 5,000 units, which will all have ground floor retail. This is an important step toward delivering additional housing units and retail amenities in National Landing, which will help meet anticipated new housing demand and mitigate upward pressure on rents.
In addition, JBG SMITH has broken ground on 1770 Crystal Drive and Central District Retail, which are both currently under construction. JBG SMITH is also serving as the fee developer for Amazon’s new headquarters and the master developer for the Virginia Tech Innovation Campus.
JBG SMITH’s submission includes a robust set of community benefits that will achieve several key Sector Plan objectives, including the dedication of open space, upgrades to the streetscape, and infrastructure enhancements. While the final benefits will be determined through a collaborative process with Arlington County, the package is anticipated to include the creation of new public open spaces, improved pedestrian circulation, and transportation upgrades.
“In reimagining this vital stretch along Crystal Drive and 23rd Street, we are focused on the goals of Arlington County’s Sector Plan, as well as our collective desire to foster a vibrant, architecturally distinct 18-hour environment throughout National Landing,” said Bryan Moll, Executive Vice President at JBG SMITH. “We look forward to working with the County to review and refine our proposals, which will significantly enhance the public’s experience at the street level and add a host of new housing and amenities for the community.”
JBG SMITH expects to commence construction on these developments after receipt of final entitlements, subject to preleasing and market conditions.
JBG SMITH and National Landing
National Landing is the newly defined interconnected and walkable neighborhood that encompasses Crystal City, the eastern portion of Pentagon City and the northern portion of Potomac Yard. Situated across the Potomac River from Washington, DC, National Landing is a well-located urban community known for its adjacency to Reagan National Airport and walkable environment featuring offices, apartments and hotels. JBG SMITH currently owns 6.2 million square feet of existing office space, 2,850 units of existing multifamily space, and controls 6.9 million square feet of additional development opportunities in National Landing, excluding Amazon’s land purchase.
In addition to the Amazon project, JBG SMITH has broken ground on Central District Retail, a 109,000 square foot entertainment and shopping destination that will serve as the retail heart of National Landing. JBG SMITH also expects to start construction on 1900 Crystal Drive next year, which currently comprises two residential towers with shops and green spaces at the base. The retail components of these two projects are expected to deliver almost 150,000 square feet of street-level retail featuring an Alamo Drafthouse Cinema, specialty grocer, restaurants, bars, and other experiential offerings.
About JBG SMITH
JBG SMITH is an S&P 400 company that owns, operates, invests in, and develops a dynamic portfolio of high-quality mixed-use properties in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Capital region, including National Landing where it now serves as the exclusive developer for Amazon’s new headquarters. JBG SMITH’s portfolio currently comprises 20.6 million square feet of high-quality office, multifamily and retail assets, 98% at our share of which are Metro-served. It also maintains a robust future pipeline encompassing 18.7 million square feet of mixed-use development opportunities. For more information on JBG SMITH please visit www.jbgsmith.com.
Developer JBG Smith says it has submitted new plans for a major redevelopment of its RiverHouse apartment property in Pentagon City, four blocks from Amazon’s new HQ2.
The developer announced today (Monday) that it submitted a site plan application to Arlington County to build about 1,000 new housing units along S. Joyce Street. The units will be in two, six-story apartment buildings, as well as traditional townhouses and maisonettes, per the press release, and about 260 of the units will be available for purchase.
The six-story buildings will have mix of units, including studios and three-bedroom units, for a combined total of 750 units. These two buildings will be constructed on the parkings lots in the northern end of the site and will feature central courtyards, and 30,000 square feet of “community-oriented street-level retail, including a potential daycare center and medical office, at the base of the two new buildings.”
The townhouses will be built on “underutilized” surface parking lots in the southern end of the site, facing the Aurora Highlands neighborhood and its single-family homes, JBG said
The extensive, 36-acre RiverHouse property is on a long lot bordered by Army Navy Drive, S. Joyce Street, 16th Street S., S. Arlington Ridge Road, and S. Lynn Street, at the edge of what’s being called “National Landing” — the recently-created term for the Pentagon City, Crystal City and Potomac Yard neighborhoods.
Currently, RiverHouse has three apartment towers built in the 1950s and 1960s, with a combined 1,670 apartment units. JBG Smith intends to keep the three towers, per the press release, and will instead construct the new buildings around the existing towers.
JBG Smith Executive Vice President Andy Van Horn said in a statement that the developer aimed to design a plan that “respects and complements the scale and character of the surrounding neighborhoods while creating a more cohesive sense of community.”
“We also focused on providing a wide range of rental and for-sale housing opportunities that meet the differing needs of Arlington’s diverse and growing residential population,” he said. “It is our goal to deliver additional housing units concurrent with Amazon’s occupancy of its new headquarters to help meet anticipated new housing demand and mitigate upward pressure on rents in National Landing.”
Vornado — which was later acquired by JBG Smith — had planned to redevelop RiverHouse with more than 1,000 rental apartments in three, mid-rise towers. The new submission, which JBG Smith says is “consistent with the Crystal City/Pentagon City Sector Plan which calls for 7,500 additional housing units by 2040,” supersedes the previous, pre-HQ2 plan.
A virtual tour is now online of the room developer JBG Smith used to pitch Crystal City and Pentagon City properties to Amazon.
Shirlington-based real estate marketing firm Lyons & Sucher designed the space, calling it “the room where it happened” and posted a virtual 360-degree tour on their website earlier this week.
“Typically people in a brokerage situation might hand you a powerpoint or a book or something. But this was super life size,” Jane Lyons of Lyons & Sucher told ARLnow. “And it created a very quick impression of how much we wanted the Amazon account and what we could do in a very short time and also how it could be kept up.”
Lyons said Amazon executives visited the room three times over the course of 2018, and before each visit JBG Smith directed her marketing firm to update the room to reflect the latest negotiations.
The third and final version of the room is the one shown on the firm’s website. It starts with a “Welcome to National Landing” mat and leads viewers around a series of freestanding, 10-foot-high walls with information about:
- The history of Crystal City
- Profiles of Northern Virginia and D.C. neighborhoods
- Information on the D.C. area’s millennial workforce and comparisons to other cities
- Connections to public transit and airports
- Renderings of properties Amazon was considering leasing or buying
The space also features a 120-foot-long floor map of Crystal City that designers marked up to show different features depending on what JBG Smith wanted to highlight.
“It was fabricated to allow it to be updated,” said Lyons. “It was a huge print job.”
One of the other changes to the room was that the marketing firm was asked to switch out the individual building renderings along the main 64-foot wall with a 64-foot aerial image of Crystal City and its connections to Alexandria, the Potomac, and D.C.
“That one stayed up for the third visit,” she noted.
Lyons said she was not able to share the all details of the changes her firm made to the room or any still pictures, due to a non-disclosure agreement.
However, the space shown on the website offers some clues as to what Amazon found important. The floor map, for instance, notes the location of Metro stations, walking distances between certain buildings, a place for outdoor dining, and the site of a potential school.
A spokesman for JBG Smith declined to comment for the story.
Earlier this month, the developer inked its deal with Amazon to lease three office buildings in Crystal City — 241 18th Street S., 1800 S. Bell Street, and 1770 Crystal Drive — and to sell a pair of large Pentagon City development sites to the company.
In March, the County Board cleared the way for Amazon to begin developing its second headquarters in earnest by unanimously approving a controversial package granting $23 million in incentives to the company if it meets certain hiring and occupancy benchmarks.
The Virginia General Assembly approved a $750 million state incentive package for the company this winter.
Arlington also pledged to fund $28 million in transportation upgrades near the planned headquarters, and to forward public records requests concerning Amazon to the company.
An Amazon spokesperson did not respond to requests for comment.
Lyons’ firm was asked to replace an aerial image showing connections to transit networks with a video showing building renderings along Crystal Drive; otherwise, the presentation to one of the world’s biggest technology companies was an analog one.
“When you are working to impress somebody who has the best tech ever they’re not going to be impressed by tech,” Lyons said, adding that that being able to physically interact with the space was “part of the magic.”
As for the room itself?
“It’s gone now,” said Lyons, explaining that the building is now being renovated. “It doesn’t exist anymore.”
Screenshots via Lyons & Sucher’s website
(Updated at 9:30 a.m.) JBG Smith has made it official with Amazon, announcing this morning the signing of lease and development agreements with the tech and retail giant.
Construction has already started on Amazon’s three temporary leased office buildings in Crystal City, with the company expecting to move into two of the buildings — 241 18th Street S. and 1800 S. Bell Street — later this year.
Amazon is also buying a pair of large development sites in Pentagon City from JBG Smith — sites that JBG will help develop into a permanent second headquarters campus for the company. The sale price of the vacant Metropolitan Park and PenPlace properties, each two blocks from the Pentagon City Metro station: just under $300 million.
“We are pleased to report that our partnership with Amazon at National Landing is moving full steam ahead,” JBG SMITH CEO Matt Kelly said in a press release, below. “With the execution of these agreements and recently legislated state and local government commitments to invest approximately $2 billion in the region’s transportation, education and housing infrastructure, we are ready to welcome Amazon’s first National Landing employees in the coming months.”
More from the press release:
JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today announced that it has executed three leases and two Purchase and Sale Agreements with affiliates of Amazon.com, Inc. in conjunction with the creation of Amazon’s HQ2 at National Landing in Northern Virginia.
These agreements are the result of Amazon’s announcement in November 2018 that it had selected JBG SMITH as its partner to house and develop its HQ2 locations after a comprehensive, year-long search that included proposals from 238 cities across North America.
Amazon has executed three initial leases totaling 537,000 square feet at three existing JBG SMITH office buildings in National Landing. The leases encompass 88,000 square feet at 241 18th Street South, 191,000 square feet at 1800 South Bell Street, and 258,000 square feet at 1770 Crystal Drive. JBG SMITH expects Amazon to begin moving into 241 18th Street South and 1800 South Bell in 2019, and 1770 Crystal Drive by the end of 2020.
JBG SMITH and Amazon have also executed Purchase and Sale Agreements for two of JBG SMITH’s National Landing development sites, Pen Place and Met 6, 7, and 8, which will serve as the initial phase of new construction associated with Amazon’s HQ2. Subject to customary closing conditions, Amazon will pay $294 million for the sites, or $72 per square foot based on their combined development potential of 4.1 million square feet. JBG SMITH, which has flexibility on the timing of closing to facilitate 1031 exchange opportunities, expects to close on the Mets land sales as early as 2019 and on Pen Place as early as 2020. JBG SMITH will also serve as Amazon’s developer, property manager, and retail leasing agent for these assets.
“We are pleased to report that our partnership with Amazon at National Landing is moving full steam ahead,” said JBG SMITH CEO, Matt Kelly. “With the execution of these agreements and recently legislated state and local government commitments to invest approximately $2 billion in the region’s transportation, education and housing infrastructure, we are ready to welcome Amazon’s first National Landing employees in the coming months.”
In January 2019, the Virginia General Assembly overwhelmingly approved incentive legislation associated with HQ2 to fund $195 million toward critical infrastructure improvements, including second entrances to the Crystal City and to-be-constructed Potomac Yard Metro stations, a pedestrian connection linking National Landing to Reagan National Airport, an expanded VRE station and substantial improvements to Route 1. These investments are in addition to $570 million of regional government commitments for transportation infrastructure and transit improvements, and they follow the regional compact from mid-2018 to invest $500 million annually in Metro system improvements.
In March 2019, the Arlington County Board also unanimously approved a $23 million performance agreement with Amazon. Both packages provide post-performance incentives for Amazon to create up to 37,850 jobs with an average annual salary of $150,000 and occupy at least six million square feet of office space in Arlington County.
The General Assembly also recently approved a major education investment package that includes funding of $250 million toward Virginia Tech’s planned $1 billion Innovation Campus to be located in National Landing and $125 million planned for new Master’s degree programs in computer science and related fields at George Mason’s Arlington campus.
In addition, the County of Arlington, the City of Alexandria and the Commonwealth of Virginia have collectively dedicated $225 million to fund a range of low-income and workforce housing initiatives over the next decade.
JBG Smith is gearing up to invest hundreds of millions of dollars in Crystal City, Pentagon City and Potomac Yard, arguing that Amazon’s impending arrival could make the “National Landing” area nearly as in-demand as D.C. itself.
In documents delivered to investors last week, the developer revealed its most detailed plans yet for how it expects to work with the tech giant as it moves its 25,000 workers to the county.
Perhaps most notably, JBG revealed for the first time that Amazon will fork over $294 million to buy the company’s “PenPlace” and Metropolitan Park properties in Pentagon City, where it will eventually build new offices. As work on those buildings continue, the company will sign “short-to-medium term” leases at JBG’s buildings at 241 18th Street S. and 1800 S. Bell Street in Crystal City, where JBG is also planning to spend another $15 million to spruce up the properties.
JBG also told its shareholders that Amazon will lease the entirety of a new building planned for 1770 Crystal Drive, which sits at the heart of the developer’s just-approved “Central District” redevelopment project for the entire block. The company expects to spend $80 million redeveloping the building, with the eventual goal of opening it in time for 2020 and making it a more permanent home for Amazon employees.
But those changes represent only the work the developer is planning that’s tied directly to Amazon. By its own estimate, JBG already owns about 71 percent of office buildings in the neighborhood, and it hopes “redeploy the proceeds” of its Amazon windfall “into either new development or income-producing multifamily assets.”
Per the documents, potential projects could include the redevelopment of 1800 S. Bell Street property once Amazon leaves, or the overhaul of some of its other existing Crystal City and Pentagon City properties; 2001 Jefferson Davis Highway, 223 23rd Street S., 101 12th Street S., and the RiverHouse Apartments (1400 S. Joyce Street) are all listed as possibilities.
Essentially, the company is betting that Amazon’s arrival will be a “powerful economic catalyst” and “kick-start the development of a technology ecosystem that has long searched for its footing in the D.C.,” CEO Matt Kelly wrote to shareholders.
“As vacancy in National Landing burns off and technology job growth gains momentum, we expect National Landing to [surpass] Rosslyn as the most valuable Northern Virginia submarket, and approach convergence with Washington, D.C.,” Kelly wrote in a letter to investors.
Those forecasts represent quite the radical change from Crystal City’s previous woes attracting any companies to the area. The departure of federal and military tenants left the neighborhood with a persistently high vacancy rate, shrinking a key tax revenue stream for the county, but officials have long touted Amazon’s impending arrival as a way to solve that problem virtually overnight.
JBG is so bullish on the impending demand in the area that it could very well convert one of its planned apartment redevelopments into more office space instead.
The developer recently began demolition work on a building at 1900 Crystal Drive, space it eventually hoped to transform into two apartment towers with a total of 750 homes between them. JBG plans to start construction by “early 2020,” but notes for investors that “this project could switch to office in the event of a substantial or full building pre-lease.”
The company plans to eventually spend $550 million on that construction and work its other Amazon-related properties, though it expects it will have little trouble affording such expense. Kelly noted in his letter that JBG saw increased demand in the area even before Amazon made its Arlington move official, and has been able to raise rents and property asking prices accordingly.
“We have also seen a dramatic increase in demand from retailers looking to locate in our initial phases of placemaking development,” Kelly wrote. “Since the announcement, we have had a further wave of increased inquiries. We believe that this increase in demand for our holdings in National Landing will continue, and likely amplify, as Amazon grows in the submarket.”
(Updated at 1 p.m.) Amazon’s arrival in Crystal City and Pentagon City seems set to completely transform developments already planned for the area.
The company’s big announcement today (Tuesday) that it would split its planned second headquarters between Arlington and New York City represents a major windfall for JBG Smith, the largest property owner across the newly dubbed “National Landing” — an area including Crystal City, Pentagon City and Potomac Yard. The developer had long sought to fill thousands of square feet of vacant office space in the neighborhoods, much of which will now presumably be occupied by Amazon’s 25,000 workers attached to the project.
But renderings posted online suggest that JBG will also tweak developments already in progress to suit the tech giant’s needs. The new “NationalLanding.com” offers a virtual tour of the area, and promises that the developer “intends to accelerate the planning, entitlement, and development of several projects” to meet Amazon’s arrival in the area — the company expects to occupy anywhere from 4 million to 8 million square feet in office space over the life of the new headquarters.
JBG Smith writes on the site that it currently controls 6.2 million square feet of existing office space in the area, with another 7.4 million of “additional development opportunities in National Landing, excluding Amazon’s proposed land purchase.” In all, the company is planning the following moves in the area, from a press release:
- Lease approximately 500,000 square feet of existing office space at 241 18th Street S., 1800 S. Bell Street, and 1770 Crystal Drive.
- Purchase Pen Place and Met 6, 7, 8 land in JBG SMITH’s Future Development Pipeline with Estimated Potential Development Density of up to 4.1 million square feet. JBG SMITH has the right to time the expected closings of the land parcel sales to facilitate 1,031 exchange opportunities.
- Engage JBG SMITH as its development partner, property manager, and retail leasing agent.
- Commence predevelopment and planning of the first office building in 2018, with construction expected to begin in 2019.
The new renderings include a “multimodal transit hub” located near the pedestrian bridge linking Crystal City to Reagan National Airport, which Amazon has volunteered to help build as part of the project. It’s unclear where exactly the hub will be located.
The renderings also center around a second entrance for the Crystal City Metro station, an amenity long sought by the county but once seemed out of reach due to funding constraints. JBG Smith is currently working on a redevelopment of the area dubbed “Central District,” and those plans included a controversial proposal to build retail space over the new Metro entrance. New sketches suggest that the developer may push ahead with those plans, now that the construction of the second entrance is assured.
“The public and private sectors are currently investing billions of dollars in the National Landing area to improve infrastructure, expand on entertainment and retail options, enhance public spaces and introduce new/repositioned buildings,” Tracy Gabriel, president and executive director of the Crystal City Business Improvement District, wrote in a statement. “We believe that Amazon will help accelerate the transformation underway in Virginia’s largest walkable downtown, further growing and diversifying Crystal City’s economy, bolstering our already strong tech presence and attracting additional companies and investment.”
Also on the way for the area is a helipad, according to the county’s memorandum of understanding with the company.
“Arlington County staff will assist Amazon in its efforts to obtain required County Board, commonwealth and federal approvals for the development, construction, and operation (at the company’s expense)” of the project, according to the memo.