All Hugh Bailey wanted was a bit of a leg up.

Bailey, who also goes by “Jim” online, was spending a lot of time playing StarCraft II. To improve his odds, he was looking for ways to get a bigger version of the minimap, a small section of the game’s interface that gives players an overview of their territory and shows them if enemies are approaching. Bailey’s solution was a program that would take the map, scale up its size, and stream it to another screen.

“It wasn't really a cheat,” Bailey recently told Protocol. “It was more like a helper program.”

It also ended up being a very basic game-streaming app, as Bailey realized when he began researching the space. This was 10 years ago, and livestreaming was still in its infancy.

Twitch was still known as Justin.tv, and the most popular app to stream gameplay online was a paid product. Realizing that there was no open-source alternative, Bailey took it upon himself to build one based on his StarCraft tool. “It seemed like a fun and interesting problem to solve,” he said. “I thought it would just be a cool little niche that I can dig myself into.”

Bailey also hoped that the project, which he named Open Broadcaster Software, could help show off his programming skills, and perhaps even get a job — something he had been struggling with. Then, live video started to take off, and with it the usage of OBS. One thing led to another, and Bailey’s little StarCraft hack not only became his full-time job, but also a key growth engine for the fledgling game-streaming space, helping to turn Twitch into the juggernaut it is today.

“Livestreaming really boomed big-time,” Bailey said, “more than I ever expected.”

From a $50 donation to major corporate sponsorships

OBS officially got its start with a post Bailey authored on the StarCraft subreddit in August 2012, and it quickly attracted both users and open-source contributors. Bailey was happy about the response, but he was ecstatic when one of the program’s early supporters sent him $50 as a token of gratitude. “I can't believe I actually have $50 in my bank account,” he remembered himself thinking. “It was just a shocker to me.”

As livestreaming became more popular, so did Bailey’s app, leading to a rewrite and rebranding to OBS Studio in 2013. As OBS Studio’s popularity grew, so did its backing. The first $50 donation quickly grew into a couple hundred dollars of support from users wanting to give back. “I [thought], oh my God, I can't believe I have all this money,” Bailey said.

By 2014, Twitch accounted for 1.8% of all U.S. internet traffic, putting it ahead of major internet and media services like Amazon, Facebook, and Hulu. The same year, Google approached Twitch with an acquisition offer, only to lose out to a $970 million all-cash bid from Amazon. One year later, Google’s YouTube launched its own dedicated gaming destination. In 2016, Microsoft acquired its own game-focused livestreaming service called Mixer.

Not all of those platforms have survived — Microsoft shut Mixer down after just four years — but Twitch in particular has thrived. The platform streamed more than 21 billion hours in 2021 alone, according to data released by Amazon, and it’s become a major driver of the company’s video advertising business. More than 31 million people visit Twitch every day, and more than 8 million creators go live on the platform every month, according to Amazon. Bailey was hesitant to share too specific usage data for OBS, but he suggested the app has millions of users.

As these internet juggernauts began to grow their livestreaming businesses, more and more of them approached OBS to help the project, ensuring their users had a free option to go live on their platforms. These days, OBS counts Facebook, Twitch, and YouTube — as well as hardware manufacturers and chipmakers like Logitech, Nvidia, and AMD — among its sponsors.

At the same time, Bailey’s project is still taking in close to $4,000 a month in Patreon donations from OBS users. All of this has not only allowed Bailey to dedicate himself to the project full time, but also hire a few contributors as staffers. “It's kind of crazy to me, but it just turned my life around entirely,” he said about the financial support from sponsors and small-time donors alike.

‘It still hasn’t hit him yet.’

Livestreaming got a huge boost during the early days of the COVID pandemic, with Twitch’s concurrent viewer numbers nearly doubling from January to April of 2020. And while much of the service’s programming is still all about gaming, it’s also attracted comedians, DJs, and other creatives who were looking for an online outlet while stay-at-home orders were in effect. Even mainstream media organizations began experimenting with the platform, and Bailey said he heard anecdotally of two major broadcasters using OBS Studio for some of their live video efforts.

“It always takes me as a surprise,” he said. “And my team members are like: ‘It still hasn't hit him yet. He still hasn't realized just how popular it is.’”

The importance of listening to his team has been one of the biggest lessons Bailey has taken away from working on OBS for 10 years. “A lot of open-source projects [have] these monolithic leaderships, [with a] person on top [whose] word is the law,” he said. “For a healthy open-source project, you need to have a good team. You need to have good communication.”

That culture of communication has led the OBS team to implement features that aren’t game-specific, including a virtual camera that can be used in conjunction with teleconferencing apps like Zoom. It also resulted in the OBS team declining an eight-figure acquisition offer a few years back, according to Bailey. “We knew right away that we weren't going to do it,” he said. “They wanted to just make money off of it. And it's just not what we [are] about.”

How a small video game hack became a major life-changer

The OBS team and the extended community of users and supporters also helped Bailey through another business challenge in late 2021, when a company called Streamlabs was using the OBS brand name without permission to commercialize a forked version of OBS Studio. “There was some difficulty in communicating with the company for a very long time,” Bailey said.

After failing to come to an agreement with Streamlabs, OBS went public with its misgivings. The project quickly gained the support of major Twitch streamers, open-source advocates, and even other companies. The backlash grew so intense that Streamlabs eventually backed down and changed the name of its product.

Bailey took to Patreon and recorded a heartfelt thank-you video, telling viewers that the project could not be what it is without its community. Visibly struggling to contain his emotions, he professed: “I love you all so much; you’re all absolutely wonderful people.”

That kind of vulnerability was on display again when Bailey talked to Protocol about his journey from a lone StarCraft player to the leader of a tool that’s powering much of today’s livestreaming. “The project pretty much turned my life around,” he confessed. Not only did collaborating on OBS help Bailey become a better programmer, it also gave him a sense of purpose that he was lacking as a jobless geek without a college degree just 10 years ago.

“I was living with my dad,” Bailey recalled. “I was pretty much a shut-in. I didn't have anything, and was thinking that my life was just going to end up pretty terrible. But, you know, it goes to show that things can change.”

Good morning! Just days ago, FTX’s CEO tweeted that everything was fine at the crypto exchange. Things were ... definitely not fine. This morning, we're digging into what happened. Also, breaking just now is the news that Meta is laying off 11,000 people. More on that below.

Can you explain this, Sam?

Binance’s shock announcement yesterday of a plan to rescue archrival FTX by acquiring it — after days of open feuding by the companies’ CEOs on Twitter — has rattled an industry still reeling from a dramatic crash and growing regulatory scrutiny, Protocol’s Ben Pimentel writes.

How did FTX get here? The brouhaha began with a report that raised serious questions about FTX and Alameda Research, the trading house owned by FTX CEO Sam Bankman-Fried.

• A CoinDesk report based on a leaked balance sheet for Alameda found that much of its reserves were based on FTT, “FTX’s own centrally controlled and printed-out-of-thin-air token,” Swan Bitcoin CEO Cory Klippsten told CoinDesk.
• FTX uses FTT as a reward currency for trading discounts, but it’s thinly traded, and its price began to wobble Sunday after Binance CEO Changpeng “CZ” Zhao said his company planned to sell its FTT holdings, which dated back to an early investment by Binance in FTX. The price of FTT plummeted by another 75% yesterday after CZ revealed his takeover plan.
• It was a stunning turnabout for a company that seemed to be one of the winners of crypto winter.

This is bad news for crypto. Whether or not the Binance-FTX merger happens, the way the drama unfolded is bound to shake confidence in crypto as a whole.

• Coinbase, crypto’s second largest marketplace, saw its stock plunge 14% yesterday. Robinhood’s stock also tumbled 19%, likely due to worries about SBF’s nearly 8% stake in the online trading app, which has a strong crypto focus.
• Coinbase CEO Brian Armstrong said, “It's stressful any time there is potential for customer loss.”
• Outgoing Kraken CEO Jesse Powell said the deal is sure to draw “significant scrutiny” given the “allegations flying around” and the prospect of customer losses. The government might scrutinize a merger, he added.

The FTX crisis unfolded the way crypto meltdowns typically hit: suddenly and opaquely. And the drama is far from over. Cathy Yoon, chief legal officer at MPCH, is also “fearful of how U.S. policymakers and regulators will see this event” and its impact on the progress the industry has made “from a policy perspective.” “I’m afraid this will set us back a bit,” she told Ben.

A version of this story will appear in today’s Fintech newsletter. Sign up here to get it in your inbox every weekday.

Amazon's HQ2 is stuck in the past

Amazon’s HQ2 has become a test case for what happens when your timing just couldn’t be worse. The company planned for millions of square feet of office space before one incredible, unimaginable event made new offices the least convenient thing you could build, Protocol's Anna Kramer writes.

There was an allure to Amazon's narrative in 2017: When it launched the HQ2 contest, here was a tech company that could heal economic wounds and propel a city into the future. But the assumptions that underlie the financial incentive agreement between Amazon and the eventual winner Arlington illustrate the hubris of the time.

• The deal calls for Arlington to pay Amazon an estimated $23 million by 2035 in return for Amazon eventually occupying more than 6 million square feet of space. The approximate $23 million projection was based on anticipated hotel revenue resulting from the tech giant’s presence.

But the economic upside hasn't materialized. The hoped-for hotel visitors haven’t turned up, and so far, Arlington hasn’t had to pay Amazon any of that money. And despite Amazon meeting its commitments on hiring and office usage, neither has the rest of the vibrancy that Arlington envisioned.

• Budget planning documents and meetings for the 2022 and 2023 fiscal years describe ongoing constraints from unexpectedly low revenues and office vacancies.
• "There is a lot of uncertainty moving forward,” Katie Cristol, Arlington’s county board chair, said in her state of the county address in June 2022. “It's true that we are not the same Arlington that we were four years ago, and after all we have endured, there is no going back to the way we used to be.”

The plan of constructing beautiful office towers and filling them with highly paid tech workers in hopes that they alone can juice the tax base and energize the vibe of a place may no longer be a viable option, if it ever really was.

Read more: Amazon’s HQ2 project is stuck in the past

​How to make a climate plan

Way back in March, the Protocol Climate team offered some tips for writing a climate plan that doesn’t suck. And now the U.N. has, too, Protocol’s Brian Kahn reports.

• It’s well worth a read, whether you're a CSO looking to improve your company’s climate plan or a Big Tech watchdog who wants to make sure companies are doing the right thing. And a few of the 10 recommendations jump out.

One big recommendation is about the role of carbon credits and how they should play into a net zero plan.The suggestion is that they need to be high quality and show both additionality (cutting emissions that otherwise wouldn’t have happened) and permanence (storing said emissions for a long period of time).

• For the tech industry, which is increasingly turning to carbon credits and offsets to “prove” it’s serious about net zero, the recommendation — along with a slew of reporting on carbon markets’ failures — should be a wake-up call.

Another is about phasing out fossil fuels. While Big Tech isn’t directly drilling oil wells, it is actively aiding the industry.

• “All net zero pledges should include specific targets aimed at ending the use of and/or support for fossil fuels,” the report says. That’s a clear invitation for companies like Microsoft, Amazon, and others providing computing to sunset their support for Big Oil.

Big Tech is already doing some things right. The industry is better at setting climate goals than other sectors of the Fortune 500.

• Workers have pushed leadership to strengthen those plans. (A key recommendation is getting workers involved, so head-pat to some CEOs.)
• Yet the industry is also starting to hemorrhage talent for not turning net zero plans into action fast enough or setting interim targets (another key recommendation from the report).

The new report makes clear exactly what work tech companies still need to do if they want to get on track. Now it's time do it.

Read more: How Big Tech can deliver on its net zero plans

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People are talking

Microsoft President and vice chair Brad Smith told Protocol that businesses, governments, and nonprofits “need to come together” to make progress fighting climate change:

• “The market and companies cannot solve this problem by themselves. I also think it’s important to recognize that governments cannot solve it by themselves either.”

Jack Dorsey said Twitter’s verification program has been a problem “from day one”:

• “I'm happy it's getting a reboot and current plan will address a lot (and inform next moves most importantly).”

Making moves

Meta is laying off more than 11,000 people. Mark Zuckerberg said he wanted "to take accountability" for the situation the company finds itself in, explaining that his decision to significantly increase investments based on pandemic-related business successes was "wrong." Affected employees will receive at least four months of salary as severance, as well as restricted stock units that are due to vest Nov. 15.

Salesforce is preparing for a major round of layoffs that could affect as many as 2,500 workers across the software vendor.

Cloud software provider HungerRush made several senior-level promotions and hires: Olivier Thierry was promoted to chief revenue officer; Dean Thompson to chief sales officer; and Shannon Chirone to senior VP of marketing.

TSMC plans to build another new chip plant in Arizona, according to the WSJ, alongside another it committed to building in 2020.

In other news

Twilio is struggling. Its stock reached pre-pandemic lows last week. While it’s still a growing company and macroeconomic factors are partially to blame, the company told Protocol that it made a number of internal missteps.

TikTok slashed its revenue target for 2022 by $2 billion, the Financial Times reports. "Staff were blamed for not driving enough sales in both advertising and ecommerce," the newspaper added.

Elon Musk sold another $4 billion worth of Tesla shares. He's sold almost $20 billion worth since he launched his bid to acquire Twitter earlier this year.

A check mark fix for a check mark problem? The head of the Twitter Blue initiative, Esther Crawford, tweeted that “government accounts, commercial companies, business partners, major media outlets, publishers and some public figures” will receive an “official” label, complete with an official-looking gray check mark.

EU regulators launched a full-scale investigation into Microsoft’s acquisition of Activision Blizzard after a preliminary investigation found that the purchase could “significantly reduce competition.”

Tesla is recalling more than 40,000 Model S and Model X vehicles from 2017 to 2021 after firmware released in October caused some cars to lose power steering when going over potholes.

Netflix is considering offering live sports if it can do so affordably, according to the WSJ.

The EU is on a clean energy spending spree at COP 27. European Commission President Ursula von der Leyen has "struck deals to lock in supplies of rare and vital minerals or hydrogen" at the climate talks, POLITICO reporters.

@elonjet lives

The Twitter account tracking Elon Musk’s private jet around the world has been shadowbanned for months, @elonjet creator Jack Sweeny told Protocol’s Veronica Irwin. Though it’s hard to confirm whether that’s true, sites that track shadowbans back him up.

But even Musk himself says @elonjet isn’t going anywhere. “My commitment to free speech extends even to not banning the account following my plane, even though that is a direct personal safety risk,” Musk tweeted. Despite not mentioning the account directly, that tweet brought @elonjet between 4,000 and 5,000 more followers.

Sweeney says he supports Musk’s Twitter acquisition as well as the billionaire’s views on free speech. But if Musk ever changes his mind and accepts Sweeny’s terms to take down @elonjet — $50,000 and an internship at SpaceX — Sweeney says he’s still open to talking. “Or, if he wants to talk about an internship at Twitter — I also think that would be pretty cool,” he added.

Sponsored content from Meridian

New tech innovations like Web3, blockchain, and AI have massive potential to strengthen democracies and global economic security while decreasing the digital divide. However, these innovations come with significant risks. Political scientist Ian Bremmer underscores disruptive technology as one of three looming global crises for which we are largely unprepared.

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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Meta announced it was laying off more than 11,000 employees Wednesday morning, slashing jobs in its recruiting department and refocusing its remaining team on AI discovery, ads, and its investment in the metaverse.

"I want to take accountability for these decisions and for how we got here," Mark Zuckerberg wrote in a message to employees that was also posted online. "I know this is tough for everyone, and I’m especially sorry to those impacted."

The layoffs, which The Wall Street Journal had earlier reported were coming, affect some 13% of Meta's workforce as the company scrambles to recover from the catastrophic collapse of its stock price. Zuckerberg said the company is also shrinking its real estate footprint in order to contain costs, and extending its current hiring freeze through the first quarter of 2023.

Zuckerberg attributed the layoffs to the company's enormous growth at the start of the pandemic. "Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended," Zuckerberg wrote. "I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected."

The Meta layoffs come less than a week after Elon Musk cut a large portion of Twitter's employees overnight. But in stark contrast to Twitter's layoffs, during which employees found themselves suddenly locked out of work devices without any explanation that they'd been laid off, Zuckerberg detailed a number of the benefits laid-off Meta employees will have going forward, including 16 weeks of severance, six months of health insurance coverage, three months of career services, and immigration support. Employees will also receive their RSU vesting next week and be paid for uncompleted time off.

Zuckerberg acknowledged "this is a sad moment" in the company's history, but tried to sound an optimistic note about Meta's future. "I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing," he wrote. "I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever."

Tens of thousands of jobs. Billions of dollars on the table. From Las Vegas to Vancouver, Austin to Orlando, more than 200 cities set out to prove who was the fairest of them all.

Pre-pandemic, quite possibly the hottest news in urban planning was the pageantry of Amazon’s search for a second headquarters. Maybe the behemoth would opt to revitalize a Detroit, or breathe new life into a Philadelphia.

But the honorees were almost too predictable: In November 2018, Arlington, Virginia, just outside the nation’s capital, and New York City — Queens, specifically — were declared split winners.

It seemed like a boon for the city just across the Potomac River, caveated by the usual concerns over affordable housing and life in the shadow of a tech giant. Arlington had been battling high office vacancy rates for more than a decade. Residents were worried that their property taxes could increase to fund revitalization for struggling commercial areas. Amazon seemed to be the cure-all.

“Everybody thinks it’s going to be this magical elixir right away,” Arlington county manager Mark Schwartz said when Amazon announced the winners, sounding a note of caution that the economic miracle might take a while to materialize. But state and local leaders were anything but measured as they stood behind a podium emblazoned with an amended version of the state slogan: “Virginia is for Amazon lovers.”

“This is a great day for all of us,” a beaming Brian Ball, then the state’s secretary of commerce and trade, said to a cheering crowd.

Plans clicked into place. By January 2020, Clark Construction had broken ground on the first of two phases of building that would add more than 5 million square feet of towers to the city’s commercial real estate.

Then, of course, came COVID-19. Office workers went home. Hospitals filled and overflowed. The world’s attention turned elsewhere.

But in Arlington, development continued apace.

Today the rumble of construction trucks and the din of jackhammers are the soundtrack of life in Crystal City, the neighborhood where, theoretically, thousands of Amazon workers will report to new offices a year from now. The project is envisioned as a white-collar 21st-century paradise, complete with interlacing parks, child care centers, and even a facial spa.

It sounds so utopian, so ideal, so … 2019.

Amazon 's HQ2 Metropolitan Park construction is in progress; here, it's shown on Nov. 17, 2021. Photo: Matt McClain/The Washington Post via Getty Images

Amazon’s HQ2, with the first phase scheduled to finish in 2023 and a second phase green-lit in April, has become a test case for what happens when your timing just couldn’t be worse: planning for millions of square feet of office space before one incredible, unimaginable event made new offices the least convenient thing you could build.

In 2017, when Amazon launched the HQ2 contest, the narrative of the tech company that heals economic wounds and propels a city into the future had an allure for Arlington. There was no reckoning with the idea that maybe, one day, the way we value space would change so dramatically. Yet even if it’s not possible to plan physical spaces for an unimaginable future, urban design experts say it’s incumbent on big companies to commit to plans that allow for maximum flexibility.

“So much depends on the client’s willingness to imagine someone else inheriting or getting that building. It requires a kind of imagination,” Susan Piedmont-Palladino, the director of Virginia Tech’s Washington-Alexandria Architecture Center and curator at the National Building Museum, told Protocol.

The assumptions that underlie the financial incentive agreement between Arlington and Amazon illustrate the hubris of the time. The deal calls for Arlington to pay Amazon an estimated $23 million by 2035 in return for Amazon eventually occupying more than 6 million square feet of space. The approximate $23 million projection was based on anticipated hotel revenue resulting from the tech giant’s presence. It’s chump change for Amazon, with a market capitalization at more than $900 billion. It’s not even that much for Arlington, given the county’s $1.5 billion budget for the 2023 fiscal year. But beyond the money, it’s the additional wealth and vibrancy Arlington assumed would follow Amazon — increased Metro ridership, 25,000 highly paid full-time, in-office workers shopping and eating out — that made the deal seem like that magic elixir.

So far, Arlington hasn’t had to pay Amazon any of that money because the hoped-for hotel visitors haven’t materialized. Despite Amazon meeting its commitments on hiring and office usage, neither has the rest of the vibrancy Arlington envisioned.

Budget planning documents and meetings for the 2022 and 2023 fiscal years describe ongoing constraints from unexpectedly low revenues and office vacancies. “There is a lot of uncertainty moving forward,” Katie Cristol, Arlington’s county board chair, said in her state of the county address in June 2022. “It’s true that we are not the same Arlington that we were four years ago, and after all we have endured, there is no going back to the way we used to be.”

The plan of constructing beautiful office towers and filling them with highly paid tech workers in hopes that they alone can juice the tax base and energize the vibe of a place may no longer be a viable option, if it ever was.

‘Everybody is just kind of punting’

Amazon’s timing might be the most painful — the company received approval to begin construction three months before COVID-19 was declared a national health emergency in the U.S. — but it’s not the only tech company caught in the midst of planning massive campuses intended for a different era. Google has been working for nearly five years on Downtown West, a development project that will reshape San Jose, California; construction was due to begin before the end of this year. In 2021, Apple committed to building a $1 billion campus near Raleigh, North Carolina, and Microsoft announced it would develop another headquarters on a 90-acre parcel in Atlanta.

“I foresee some rocky times ahead,” Piedmont-Palladino said. “A lot of tech firms expanded the whole amenity culture with enormous amounts of square footage for lounge space, informal meeting space, roof terraces ... The big question for me as an architect and an urban designer is, what’s going to happen to that?”

These companies now have Amazon to look to as they consider adapting their plans for the new reality, but there’s no evidence Amazon is rethinking its ambitions. Met Park’s two 22-story towers are due to be completed in the third quarter of 2023; four more towers will go up by the time HQ2 is due to be completed three years from now. The company has not announced changes to its plans and, when asked by Protocol if it was rethinking the project, did not indicate it was considering any adjustments. A spokesperson said Amazon designs its offices to meet workers’ needs now and into the future. The architects — NBBJ, the same firm that designed most of Amazon’s Seattle buildings — and developer JBG Smith did not respond to requests for comment about whether plans have evolved for future reuse.

That leaves the people most directly affected by HQ2 in limbo, uncertain if the glass prism at Arlington’s heart could become more of a monument than a practical space.

“Everybody is still kind of confused about what to do and where to go,” said Eric Cassel, the president of the Crystal City Civic Association. “What’s plan A if everybody comes back and what’s plan B if everybody doesn’t? There’s a whole set of questions like that, and everybody is just kind of punting right now.”

County officials acknowledged that budgeting hasn’t been smooth, despite Amazon’s already large presence. “I know that we all would prefer to be in the situation of our peer jurisdictions who are less dependent on commercial revenue sources,” Cristol said at the April meeting announcing the FY 2023 budget. More than half of Arlington’s revenues come from a combination of private and commercial real estate taxes.

Before the pandemic began, the county anticipated that the cumulative effects of Amazon’s development (including business taxes, property taxes, sales and meals taxes, and hotel taxes) would generate about $174 million in revenues over the first 12 years, from 2019 to 2031. Because the buildings are still under construction and not yet appraised, the county hasn’t provided estimates for what Amazon will pay in property taxes, but the company will not get any kind of break on those.

Given the evidence from the county’s budget concerns and the decline in hotel tax revenues, it’s clear the $174 million expectation reflects a best-case scenario that has yet to materialize.

Everybody is still kind of confused about what to do and where to go.

Aside from the hotel tax incentive, Amazon will not receive any major tax benefits from the county. The state, however, could provide more than $550 million — still a relatively small tax incentive compared to the billions offered by the state of New York for the now-defunct Queens part of the project — if Amazon actually creates the 25,000 jobs it has promised in Virginia and pays those workers an average of at least $150,000 per year. Virginia’s business and commercial tax rates are much lower and more favorable for companies than New York’s notoriously high ones.

Amazon’s outward messaging is upbeat. “This past year, Amazon’s growth in the Commonwealth continued at pace … we continue to make significant progress on the construction of our new development at HQ2,” Holly Sullivan, Amazon’s vice president of worldwide economic development, wrote to the Virginia Economic Development Partnership on April 1.

If the executive director of the National Landing Business Improvement District (where the HQ2 will be located) is concerned, she’s not saying. “We have truly guaranteed job growth,” Tracy Sayegh Gabriel told Protocol. “We’re positioned to thrive in a post-pandemic economy.”

The hope — some might call it denial — is understandable, given Arlington’s history.

A gaping wound

They say it in hushed tones. “I’m assuming you know about the BRAC?”

It haunts Arlington, like a scandal or tragedy no one wants to acknowledge. “The BRAC” is shorthand for the Base Realignment and Closure commission of 2005, which required the Pentagon to move more than 17,000 jobs out of Crystal City. It created a gaping economic wound and a profound psychological one for Arlington.

Crystal City has struggled to fill its office buildings since, battling with vacancy rates between 17% and 24% for more than a decade. Today most people who live in Arlington reside there because it’s cheaper than Washington, D.C. The public schools are better funded and have higher graduation rates. There are more open spaces. It has countless objective merits as a place to live and work, and the housing market remains robust.

But it’s not beautiful, it’s not bustling, and it’s definitely not cool.

Sen. Kirsten Gillibrand once called Arlington “a soulless suburb.” It’s a barb that stuck.

“It’s one of the criticisms of my dear old Arlington that I can’t quibble with too much,” said Christian Dorsey, an Arlington County Board member who chaired the board in 2019 during the HQ2 approvals. Sitting across the street from the block that will one day house Amazon’s 350-foot-tall Helix, a twisting tower with spiraling walkways that in renderings bears an unfortunate resemblance to the poop emoji, Dorsey gestured at the street and admitted there’s little to draw the eye.

The Helix will change that, but it will only open to the public two days per month.

“It's true that we are not the same Arlington that we were four years ago, and after all we have endured, there is no going back to the way we used to be.”

The BRAC prepared the ground for an unusually warm Amazon welcome after the company, which had planned HQ2 to be split between New York City and Arlington, gave up on New York in the face of public opposition.

“Amazon, because it wasn’t envisioned that we would have a commercial tenant that would be in the business of building millions of square feet, kind of came as a wonderful bandage for that gaping wound,” Dorsey said.

With Amazon as an anchor, Arlington could sell itself as a tech corridor with access to Washington, D.C.’s, political power and Virginia’s educational resources. Virginia Tech has just broken ground on a campus that will abut the area, a project that helped lure Amazon. Eight different transit projects — being paid for with state and federal money — have had timelines accelerated in anticipation of Amazon’s growth.

If the rate of remote working remains where it is today, those travelers could be hard to find. Pre-pandemic, the Pentagon City Metro station averaged 12,500 riders each weekday; that dropped to under 4,000 daily in 2020. Today about 4,200 people enter that Metro station each weekday on average. This is despite Amazon’s progress, on paper at least, of fulfilling occupancy requirements of the HQ2 deal penned in 2019, which by mid-2023 requires it to occupy 797,280 square feet of office space. The company is already using more than 1 million square feet spread among six different addresses in Crystal City, according to public records obtained by Protocol.

Additionally, Amazon says it had created 3,922 new jobs in Virginia by the end of 2021 and had more than 5,000 workers assigned to HQ2 as of April 2022, although none of those workers is required to be in-office five days a week.

The city expected annual hotel tax revenues to quickly exceed pre-pandemic averages of $25 million annually as Amazon’s presence grew. Instead, as in cities nationwide, hotel tax revenue has plummeted. In FY 2020, which included several pre-pandemic months, the total was $16,553,257. In FY 2021, it was $5,668,799. FY 2022 amounted to $15,070,995.

The big hits from WFH

At the heart of Crystal City’s corporate landscape sits a large bar inside the local Whole Foods. It used to be hopping after 5 p.m., packed with people in suits and bartenders rushing to pour after-work drinks.

Now, the bartender on duty is lucky to serve a couple of beers, even on a hot weekday prime for happy hour. Many bars across the country have recovered from the economic devastation of the pandemic, but not this one, which once counted on business from commuters working in nearby offices.

Nick Bloom, an economics professor at Stanford who has dedicated the last two years to studying work-from-home practices, doesn’t expect that to change. “I am very convinced work-from-home is here to stay in the U.S.,” Bloom told Protocol. In the United States, the average number of work-from-home days is hovering at around three out of every 10 business days, a number that encompasses service-sector employees and others that require in-person work. The offices at National Landing will cater mostly to workers whose jobs allow full-time remote work.

“We don’t have a plan to require people to come back,” Amazon CEO Andy Jassy said Sept. 7. “We don't right now.”

The company, citing the pandemic’s effect on work habits, has paused construction on at least six office buildings in the United States, including at least five towers with more than 3 million square feet of space in Bellevue, Washington, and another tower in Nashville. Amazon this year has also slowed, paused, or killed the construction and opening of more than 60 U.S. warehousing and fulfillment facilities totaling over 50 million square feet of space, according to MWPVL data. Those closures are related to separate headwinds for Amazon: Unprecedented consumer demand for delivery services early in the pandemic has faded more than anticipated.

What’s more, Amazon significantly slowed hiring in the second quarter of 2022, including in its music and device businesses. And in November 2022, Amazon froze new incremental corporate hires across the company for at least the next few months and declined to estimate when hiring would resume. "We’re facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy," wrote Beth Galetti, the senior vice president of people experience and technology, in the announcement.

‘A very logical next question’

Arlington’s office vacancy rates illustrate the size of its problem. More than a million square feet of office space was emptied and returned to the market in Northern Virginia between January and July 2022, according to Colliers, a real estate management company. The vacancy rate for National Landing (the official name for Amazon's Arlington business neighborhood) in the second quarter of 2022 was 24%, the second highest of every office market in Northern Virginia. That will probably worsen when HQ2 construction finishes and Amazon likely returns to the market the 1 million square feet of office space it’s currently using.

“There’s just a very logical next question: Office users aren’t going to use that space, what other users could use that space?” asked Uwe Brandes, Georgetown University’s faculty director of the Urban and Regional Planning Program and the Georgetown Global Cities Initiative. “The most important obvious next part of that is a question around retrofitting office buildings into residences. A very logical, almost kind of a substitution conversation.”

The practice is called adaptive reuse, and it’s not a new idea: 18th- and 19th-century buildings have been converted into hotels, and old warehouses have been reborn as residential complexes. But modern office buildings are harder to convert because their open floor plans don’t allow for the carving out of smaller spaces with sufficient windows for air flow and natural light.

Additionally, the companies that built them are clinging to their investments. Doing otherwise would be the equivalent of admitting they’d lit mounds of cash on fire. Imagine if Apple allowed a permanently remote workforce. Cupertino’s Apple Park — which opened in 2017, cost $5 billion, and includes dining areas to seat thousands — would become an absurd boondoggle to investors, an impression Apple avoids by claiming that it needs workers in the office at least three days a week.

Before 2020, the biggest criticisms of HQ2 took two slants, both of which now seem prescient. The first was that the structures in the development parcels were too large. Some members of Arlington’s planning committee pushed for the complex to feature smaller structures connected and interrupted by more roads and sidewalks, which would make them easier to adapt for future uses. The second was that the zoning reforms that allowed Amazon to do almost whatever it wanted architecturally were unfair — if Arlington was going to give Amazon that kind of leeway, it should do the same for other businesses to enable them to adapt to changing circumstances.

Shannon Flanagan-Watson, the deputy county manager and interim director of Arlington Economic Development, warned in a September 2022 update that Arlington will continue to face “unprecedented” office vacancy rates as employees continue to work from home. “[Amazon’s] new state-of-the-art office space will not drastically reduce the County’s vacancy rate,” she wrote.

From his position as county board member, Dorsey told Protocol that he has no idea what, if anything, Amazon plans to do differently with its space. But creative, permanent changes to zoning rules have suddenly become popular political talking points. At the first county board candidate debate in September, all three candidates said they supported changes to zoning rules in favor of adaptive reuse.

"I believe that we should have office-to-residential conversion in order to deal with the vacancy rate and our housing crisis at the same time," said Audrey Clement, an independent board candidate. Matt de Ferranti, a current county board member, agreed, calling the way spaces need to be adjusted and used today “a complete paradigm shift.” Flanagan-Watson’s Economic Development agency has urged the board to consider a number of zoning adaptations at upcoming meetings for the rest of the year.

Members don’t say it, but the 2019 vision of an Arlington literally centered around Amazon’s aesthetic has become an outdated one.

The 2030 Arlington envisioned in 2019 would be one flooded with daily office workers, commuting on the Metro and turning Arlington into a tech-centered haven for the affluent. Now, the Arlington of 2030 could be one where the people who need to work in-person jobs can actually live near them. Work usually shoved outside of cities to cheap, rural spaces could become more central to the community. Empty towers could be renovated to house wet labs and public schools. A warehouse could become a fulfillment center, and a mostly vacant office could become housing affordable to the delivery truck drivers staffing that center. If people won’t travel for Amazon-related business conferences, maybe they’ll travel for microbreweries and top-tier surgical centers, which could use the ample available space if zoning rules changed.

Flanagan-Watson wrote that the county is committed to pushing for such changes, citing the prospect of vacant office buildings someday housing colleges and universities, animal boarding facilities, urban agriculture centers, and distilleries.

“In Arlington, we would love to be able to have … public education capacity, in either increased numbers or in different locations. Can commercial space be a solution there?” Dorsey suggested. “Or maybe we have the opportunity to give nonprofit spaces a new home and security.”

There’s no question that Amazon will catalyze some form of growth in Arlington. But exactly how much, and what shape that will take, may depend on Amazon’s own willingness to embrace a future it never planned for.

Al Gore has one mission this week at COP27, and that’s to give climate negotiators what he hopes will be a critical tool to address the crisis at hand: an independent, global inventory of greenhouse gas emissions, down to the individual facility.

The Climate TRACE coalition just released the world’s most detailed inventory of global greenhouse gas emissions, which Gore, a founding member, is unveiling on Wednesday at the United Nations climate summit in Egypt.

“Of course, the world has long known what the overall amount of greenhouse gas pollution in the atmosphere is. What’s different about this [database] is the accurate apportioning of who’s responsible for what and the granularity that allows us a focus on specific emissions sources,” Gore told Protocol, adding that he has “no doubt” that the database “will be put to a lot of use in negotiations for sure.”

The inventory shows facility-level emissions, which will allow negotiators to home in on the most polluting sites in individual countries, helping them target where emissions reductions should come from. Putting a solar farm in one place might displace significantly more emissions than locating it somewhere else, and the inventory allows negotiators to identify exactly where they would get “the biggest bang for their buck.”

The inventory, published on Wednesday on Climate TRACE’s website and free for anyone to access, includes emissions data for 72,612 individual sources, including power plants, steel mills, and oil and gas fields. It also includes sources that can move between countries, such as cargo ships.

That granularity will be critical for countries to have an accurate accounting of their emissions and where they come from, particularly countries that don’t have the resources to gather that data themselves. It will also help corporations looking for the most cost-effective, impactful way to cut emissions, said Gavin McCormick, another founding member of the coalition.

“One of the exciting parts for us has been to move the conversation from countries arguing in some vague sense about accountability to, ‘Hey, we’re talking about these few facilities here,” McCormick said.

Using AI and satellite data, Climate TRACE was able to determine that a significant share of carbon pollution comes from a small number of facilities. The database shows that one steel mill in Korea, for example, emits more greenhouse gas pollution in a year than all of Bosnia. “The politics of how you would transition a few facilities is strikingly different than when you’re saying, ‘Who could know where it’s coming from?’” McCormick said.

Many countries lack accurate, granular, and up-to-date emissions data. That’s in part due to resource constraints, particularly in smaller or poorer countries. Egypt, for example, released a partial inventory of its 2015 emissions for the first time this year. Some of the data is self-reported by polluters, collected via surveys of key facilities and then extrapolated to create a country-level estimate. In India, “I know they’re literally out there counting cows for a few farms and then assuming these farms are representative for the whole country,” McCormick said.

Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE

One key insight that came out of this inventory was that oil and gas emissions are “massively undercounted” in official estimates, he said. Through satellite data, the coalition found that oil and gas leaks were a significant source of “super-emitting” sites.

When asked if he thinks the undercounting of emissions from the oil and gas sector was deliberate or not, Gore said, “There are several specific examples that are hard to interpret in any way other than the fact that there has been an intentional effort to hide emissions and to deceive the world community about how large the emissions are. It’s just almost impossible to believe that it’s an accidental oversight, and all the accidents go in exactly the same direction.”

Gore, however, is not interested in Climate TRACE being the “climate cops.” He views the coalition as more of a “neighborhood watch,” which is often contacted by law enforcement for local information. “I will not be at all surprised if some — maybe many — governments use the information to make sure that their laws and regulations are complied with,” he said.

It’s not just governments who can benefit from the inventory release, but private companies as well.

The cleanest steel mills aren’t being used at full capacity. Yet shifting business to these mills could reduce emissions from the steel sector by 50%, McCormick said.

Companies that want to decarbonize their supply chains — which includes a number of major tech companies from Salesforce to Apple — can simply use the information to purchase products from the cleanest facilities. The coalition has already started having conversations with multinational corporations about switching suppliers, which can happen in a matter of months rather than years, if they’re armed with independent data.

By next year, Climate TRACE hopes to update the inventory to include every source of emissions and, eventually, get it closer to updating in real time. Right now, the data as a whole is at least annual up until 2021, with some sectors updated monthly.

“My belief is that if we can demonstrate to the world that it’s actually easier than they thought to make progress and we can actually track that progress, this is going to be the year that a lot of countries start tasting some serious progress,” McCormick said.