Amazon’s “second headquarters” is being split between New York City and the Washington suburbs, the US tech giant announced Tuesday, capping a yearlong contest that saw dozens of cities fight it out for a promised $5 billion investment and 50,000 expected jobs.
The chosen locations are Long Island City neighborhood in the New York borough of Queens, across the East River from Manhattan, and the Crystal City section of Arlington, Virginia, across the Potomac from the US capital.
Both districts offered a variety of tax and infrastructure incentives to lure the huge corporate prize, but Amazon said one important element was access to a qualified workforce.
|A man enters the Crystal City transit station in Arlington, Virginia, where Amazon will base one of its two new headquarters under a plan to invest $5 billion (AFP)|
“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come,” said Amazon chief executive Jeff Bezos, who last year called for proposals for an “HQ2” with equivalent status to Seattle, in the northwestern US state of Washington.
“We believe Virginia has a tremendous amount to offer to Amazon,” Virginia Governor Ralph Northam told a gathering in Arlington after the announcement.
Northam said the region has “one of the strongest pools of tech talent in the nation” and that even with the incentives, the deal will result in “net positive revenues” for the state.
– Walk to airport, university –
Virginia will offer $550 million in incentives over 12 years based on a similar number of job creations, contingent on adding the forecasted number of “high-paying jobs,” and Amazon will get another $23 million from Arlington, where the company intends to create an entire new neighborhood called National Landing.
Amazon said it expected its investment would boost tax revenue for Virginia by some $3.2 billion over the next 20 years.
The plan calls for Amazon to create four million square feet (370,000 square meters) of office space in New York, with an option to double that, in a district with a large number of office buildings with high vacancy rates.
The state will also spend some $200 million in infrastructure improvements including in mass transit, and a pedestrian bridge to the adjacent Reagan National Airport, and create a new campus of Virginia Polytechnic Institute on the site, offering masters degrees in computer science and related fields, Northam said.
|Amazon said it expected its investment in Crystal City would boost tax revenue for the state of Virginia by some $3.2 billion over the next 20 years (AFP)|
“Our investments are in our people and our infrastructure,” the governor said.
The US capital area — where Maryland and the city of Washington were also finalists — was long seen as a front-runner, in part because Bezos already has a residence in the city and owns The Washington Post newspaper.
In New York, the company will receive “performance-based direct incentives of $1.525 billion” over the next decade based on creating 25,000 jobs in Long Island City.
Mayor Bill de Blasio called New York’s selection “a giant step” in the city’s development.
“New Yorkers will get tens of thousands of new, good-paying jobs, and Amazon will get the best talent anywhere in the world,” he said.
|The waterfront of Long Island City in the Queens borough of New York, was one of two sites selected by Amazon for its new headquarters (AFP)|
The competition had been derided in some quarters as a “Hunger Games” contest pitting cities against each other, with rival bidders piling up offers of incentives for one of the largest and most successful global corporations.
Alexandria Ocasio-Cortez, elected to Congress from a district that includes part of Queens, said it was unclear if the community would benefit from the massive corporate move.
“Amazon is a billion-dollar company. The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here,” Ocasio-Cortez tweeted on Monday.
Amazon’s statement said its plan would boost tax revenue by some $10 billion over 20 years.
– ‘Sheer size and scale’ –
Neil Saunders of the research firm GlobalData said the new locations make sense for Amazon as it seeks proximity to political power, fashion and technology talent.
Saunders said that “the sheer size and scale of Amazon and its interest across many areas of technology, retail, and various consumer services” suggests a need for multiple locations.
The analyst added that the split helps Amazon avoid a problem of too much growth or congestion in one location, noting that that had caused problems in Seattle.
“Being able to balance growth across numerous cities will help alleviate such issues,” he said.
Started in the 1990s, Amazon has seen spectacular growth and earlier this year saw its valuation briefly hit $1 trillion before falling back.
In addition to its online retail operations in dozens of countries, Amazon is a major cloud computing firm and offers streaming video and music, hardware using its Alexa digital assistant and owns the Whole Foods grocery chain.