August 1, 2016

Expedia scales back its plans and budget for new campus

Image courtesy Bohlin Cywinski Jackson [enlarge]

The white structures show the existing and future buildings Expedia had initially planned for the 40-acre former Amgen campus on Elliott Bay.

Expedia Inc. is scaling back plans for a new campus on Seattle's waterfront, potentially saving the online travel firm as much as $600 million in construction costs, Bloomberg reported.

Expedia's Chief Financial Officer Mark Okerstrom said in an interview with Bloomberg that the Bellevue-based company has decided to take a “modular approach” and build space on the new campus as needed in the coming years, rather than build excess space.

In a second quarter earnings call last week, Okerstrom said Expedia has looked at the campus design “with a focus on budget and phasing” and believes it can have the property ready for use in 2019 for “closer to half” of the previous estimated cost of $1 billion to $1.2 billion.

“One of the things that concerned us about the design that we were looking at was the need to build out more than we needed up front,” said Okerstrom in the Bloomberg interview.

He told Bloomberg that the decision doesn't mean Expedia is curtailing its growth plans. “We do expect that ultimately we will grow into a campus of the size that we had originally anticipated,” he said.

Okerstrom said in the earnings call that Expedia expects to share more details as the new plans are finalized.

Expedia previously said it expects about 4,500 people to work at the 40-acre Seattle campus.

Bohlin Cywinski Jackson is designing the new campus, which was previously occupied by Amgen. GLY Construction is the contractor and Unico Properties will provide property management.

PWP Landscape Architecture of Berkeley, California, is designing the landscape and Studios Architecture of San Francisco is designing the interiors.

Expedia acquired the waterfront site in May 2015 for $228.9 million.

In March, Expedia said the first phase of work on the campus would involve renovating four existing buildings, expanding three and constructing a new four-story, circular structure with 600,000 square feet just north of the existing buildings.

Expedia said at the time that these structures would give it 1.2 million square feet of office space, and that future phases could expand the campus to 1.9 million square feet.

When Expedia began looking for a place to move, officials were open to either a high-rise tower or a low-rise campus. They said Amgen's site was the best of both worlds: a campus that's near downtown Seattle.

Commuting could be a challenge for Expedia's workforce, many of whom live on the Eastside. Expedia has leased space in a nearby office building at 645 Elliott Ave. W. to try out some solutions to that problem. The firm wants see if private shuttles, public transportation or some combination of modes are the best option for getting people to and from work.