If Irvine Builds Amazon's HQ2, The Company Will Only Have To Pay The Rent
In the competition to woo Amazon's HQ2, Irvine Co. has stretched beyond the promises of many other cities to make Irvine, California, a contender, offering up a turnkey solution for the new headquarters without any upfront capital from Amazon.
The company's strategy could save Amazon the $5B it would cost the tech giant to buy and entitle land and design and build its new campus.
If Amazon chooses Orange County for its second headquarters, the e-commerce leader could walk into the fully financed and fully approved Irvine Spectrum district. Irvine Co. is offering the full 8M SF Amazon has requested from cities vying for HQ2. Amazon would just pay rent.
The City of Irvine, County of Orange and Irvine Co., the company behind the master planned city, are major players in the proposal. Irvine Co. Chairman and sole owner Donald Bren wrote a letter to Amazon CEO Jeff Bezos pitching the proposal.
"With the Irvine Company proposal, Amazon will not be required to invest capital for land acquisition, buildings or entitlements to build your new business campus," Bren wrote. "Our company has the long-term real estate assets, capital resources and flexibility to deliver all your required workspace with lease durations of Amazon’s choosing. In essence, you would have a one-click shopping opportunity and be able to capitalize on our in-place property development rights, thus avoiding potential delays..."
Bren said the first phase is ready for immediate occupancy and the rest can be delivered as Amazon needs it.
Irvine Spectrum is the city center, Bren wrote, and has become Orange County's downtown with 24M SF of office, 9,000 apartments and a major lifestyle center with 2M SF of shopping, restaurants and entertainment. Irvine is already home to 900 technology companies, including Amazon's existing Irvine office.
"No other city in North America can offer Amazon this level of certainty," Irvine Mayor Donald Wagner wrote in the Amazon proposal. "Assembling that much space elsewhere could very likely require working with dozens and dozens of owners in other cities, creating unknown costs and requiring uncertain, and expensive, government approvals. Irvine avoids all of that."
The city's Class-A office rents compare favorably to other gateway markets and are 15% lower than downtown Seattle, according to the proposal. It also boasts connectivity as one of Google Fiber's 10 initial cities in the U.S.
Other draws for Irvine include Southern California's nearly 415,000 science, technology, engineering and math workers, which is the largest pool in North America, and education, including the University of California, Irvine, Wagner said.
After extolling the virtues of Irvine, from a great transportation system to excellent schools, Bren ends his letter to Bezos with one more benefit: "P.S., It’s 74 degrees on this beautiful October day, the sun is out and the surf’s up at our spectacular beaches. Please come join us! The water, like the place, is the perfect temperature."
