Amazon ends year-long bidding contest as it splits new $5bn HQ between two cities
New York and Virginia beat out 18 others, including Los Angeles and Chicago
Amazon picked America’s financial and political capitals for its $5bn new headquarters, saying it will build offices for up to 25,000 people in New York City and close by Washington, D.C.
Its move ends a frenzied year-long bidding war among cities across North America, splitting the location among two finalists. In addition, Nashville, Tennessee, will be home to Amazon’s new East Coast hub of operations, adding 5,000 corporate jobs.
Amazon will boost its presence around New York City and the nation’s capital while also giving it more of a foothold in the center of the country as it seeks to gain a recruiting edge over Silicon Valley tech companies. Hiring at both the new facilities will begin in 2019.
The new Washington metro region headquarters will be located in National Landing, in Arlington, Virginia, and the New York City headquarters will be located in the Long Island City neighborhood in Queens, across the East River from Midtown Manhattan and the United Nations.
The area now includes some high-rise apartment blocks, a narrow canal, and manufacturing and warehouse buildings. Its attractions include a large, landmarked Pepsi-Cola advertising sign and a clock counting down the hours until the end of U.S. President Donald Trump’s first presidential term.
“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 founder and Chief Executive Jeff Bezos.
Amazon had received more than 200 proposals from across North America vying for a home base in addition to its Seattle headquarters.
It said on Tuesday it will receive performance-based direct incentives of $1.525 billion from the state of New York, based on the company creating 25,000 jobs in Long Island City.
Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington.
The world’s largest online retailer has already been awarded more than $1.6 billion of state and local public subsidies across the United States since 2000, with most of that after 2012, according to a database from the Washington-based government watchdog Good Jobs First.
Amazon did not comment on the Good Jobs First numbers but said it has invested $160 billion in the United States since 2010, including in warehouses, data centers and employee compensation.
New York and Virginia beat out 18 others, including Los Angeles and Chicago, on a short list Amazon released in January.
Cities and states promised billions of dollars of tax breaks and other inducements in exchange for Amazon’s so-called HQ2. They also handed over infrastructure, labor and other data that could prove useful in other ways to Amazon.
It was not immediately clear how negotiations unfolded once Amazon settled on the plan for two offices. The company had originally said it would spend more than $5 billion and add up to 50,000 workers at one location.
Amazon said the split would give it more geographic diversity for recruiting and could also help lessen congestion and cost-of-living increases that would have accompanied one bigger office.
The company has already had to navigate similar issues at its more than 45,000-person urban campus in Seattle. An affordable housing crisis there prompted the city council to adopt a head tax on businesses in May, which Amazon helped overturn in a subsequent city council vote.
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 tax-payer funded incentives and other costs.
The company has said it helped boost Seattle’s economy indirectly by $38 billion between 2010 and 2016. Construction and service work has increased, catering to Amazon, and the company said it also helped attract other Fortune 500 businesses to Seattle.