Amazon names locations for new US HQs

Daniel Fowler
November 15, 2018

This morning, Amazon announced a split HQ2, with 25,000 jobs in Northern Virginia and New York City.

Here's how it all played out.

Some critics had pushed for more transparency from cities and states in the bidding process, warning that the benefits of hosting a massive Amazon office may not offset the taxpayer-funded incentives and other costs.

However, not everyone was swept up in the excitement.

On Nov. 13, the company announced it is splitting its second headquarters between Arlington, Virginia and Long Island City, New York. Advocates of the move have pointed out the benefits of such a deal, with tens of thousands of jobs and billions in investments.

It confirmed performance-based incentives of $1.5bn from the state of NY and $573m if it meets targets of the 25,000 people hired for the Arlington site netting an average wage of over $150,000.

In addition, Amazon will receive $23 million cash from the local Arlington County authorities based on an expected increase in hotel taxes, which needs to be approved by the County Board.

The site in Arlington is just across the Potomac River from downtown Washington DC, which could give Amazon greater political influence in the capital.

What do the cities get in return for these payouts? Now it will watch one of the world's most important companies focus its growth in two rival cities to the south.

- More than 25,000 full-time jobs. Amazon is planning to invest $230 million in the the Operations Center, which is expected to create about 5,000 jobs.

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Amazon could receive more than $2 billion in tax incentives in NY and Virginia, the company said in its HQ2 announcement. Company spokesman Adam Sedo declined to provide details about whether Amazon plans to take advantage of them.

Are these the cities that would have benefitted most?

The state, the city, and Amazon pledged to kick in $5 million each for workforce development initiatives, such as technology training programs targeted at local public housing residents and high school students - which, of course, also furthers Amazon's goal of staffing up in a tight labor market. And Arlington is among the wealthiest counties in the United States (in 2016, the median income there was $US108,706). "Long Island City doesn't strike me as high on the list for needing extensive tax incentives to stimulate economic development".

"My heart is broken today", Dallas Mayor Mike Rawlings said. Housing in Amazon's two new hubs are well more than twice the median home price nationwide of $255,000, according to ATTOM Data Solutions. Both of the winning cities are seen as desirable living locations, but that's also what makes living there so expensive. "We're well past that, and there's zero public justification for a package as rich as this".

"It's exciting because it will bring more people to fill all those highrises they are building", she said while walking her dog.

A coalition of nonprofit groups warned that Amazon's arrival will likely worsen housing affordability for many lower-income workers in the two cities.

As well, they think it's no surprise that the candidates that were most obvious all along won (and it's also been noted that Mr Bezos owns homes in both locations). For example, Amazon's Anable Basin site is just a mile from the census tract containing Queensbridge Houses, the nation's largest public housing complex, where the median household income is $14,000 and the poverty rate is almost 50 percent.

The company got $148 million worth of media attention across the English-language press in the two months following the launch of its search last September, according to media measurement and analytics firm MediaQuant Inc.

What happens to the headquarters in Seattle?

Meanwhile, Amazon has announced that Nashville, Tennessee, will become Amazon's fourth-biggest USA office outside Seattle, with more than 5,000 corporate jobs focused on technology and management for its retail operations unit.

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