SEATTLE- Amazon.com has inked a 1.6-million-sf headquarters deal with Vulcan Inc. and Schnitzer West. The deal calls for the online retailer to occupy 11 new buildings to be built on six blocks located immediately north of the Seattle CBD in the South Lake Union area.

Amazon.com expects to begin moving into its new office space in mid-2010, with full occupancy in 2011. The company said in an SEC filing that it will pay as much as $1.5 billion over 16 years to occupy the full 1.6 million sf, and that is also has options for additional space. An Amazon executive was not immediately available Thursday morning for further comment.

The developers are billionaire Paul Allen’s real estate investment arm Vulcan Inc., which controls some 60 blocks in the South lake Union area, and Schnitzer West, a partnership Schnitzer Investment Corp. of Portland, OR, and Dan Ivanoff of Seattle. To help seal the deal, the City of Seattle approved increased building heights in the immediate area and the developers agreed to contribute $6.4 million for affordable housing in the area.

Amazon.com’s new headquarters will be anchored by three 12-story, 160-foot high buildings on one-and-a-half blocks bounded by Terry and Boren avenues and John and Harrison streets. The buildings are known as Interurban Exchange II, IV and V.

Vulcan and Schnitzer West will jointly develop the buildings to a LEED Silver or Gold standard as the project’s first phase. The other eight buildings are slated to be developed exclusively by Vulcan. In addition to the office space, the buildings will hold about 100,000 sf of street-level space for restaurants and shops.

The company’s headquarters complex will be on the city’s new Streetcar line, which will connect to the city’s bus and light rail systems. Tim Halladay, vice president of real estate and finance operations at Amazon.com says proximity to public transit was an important factor in the selecting the location, as was the opportunity to enhance employee collaboration and productivity by consolidating employees on larger floor plates in fewer, adjacent buildings.

Amazon’s current headquarters is located in a 16-story former hospital southeast of the Downtown core in the Beacon Hill neighborhood. It would vacate the hospital and several other leased locations around the city when it consolidates operations in the South Lake Union area. In total, the company reportedly occupies approximately 650,000 sf in the city.

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