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Amazon Picks New York and Arlington, Va. for HQ2

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Amazon.com Inc. officially announced on Nov. 13 that New York City and Northern Virginia will be the sites of its new headquarters, after more than a year of speculation and a frenzied race among dozens of municipalities to offer the best incentive packages to the tech giant.

In the Washington D.C. metro area, the new headquarters will be located at National Landing, Arlington, Va. The Queens neighborhood of Long Island City will be Amazon’s New York City headquarters site. Both cities are major metropolises with international airports and have top labor forces—plus CEO Jeff Bezos already has homes in both places.

“We are excited to build new headquarters in New York City and Northern Virginia,” Bezos said in the press release announcing the decision. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

National Landing is a rebranded name for Crystal City, a neighborhood near Virginia’s Reagan National Airport, according to NPR. Crystal City, an office campus south of Washington, D.C. with access to public transit, had long been rumored to be among Amazon’s top selections. Office REIT JBG Smith owns more than 20 properties in the region and is at the forefront of revitalizing the outdated buildings at Crystal City—and analysts have previously said the REIT could benefit tremendously should Amazon select that site.

In its announcement, Amazon said it will invest $5 billion and create more than 50,000 jobs across the two locations. The company also chose Nashville, Tenn. for its new Center of Excellence for its operations business, creating more than 5,000 jobs. The center will be responsible for Amazon’s customer fulfillment, transportation and supply chain activities.

Both Arlington and New York City offered the online retailer big tax incentives. Amazon will receive nearly $1.5 billion should the company create 25,000 jobs in Long Island City and $573 million in Arlington should the company create 25,000 jobs, with an average wage of over $150,000 there.

In turn, Long Island City and Arlington will benefit not just from the creation of jobs, according to Amazon. Amazon will also bring in about $2.5 billion in investment to each market, with 4 million sq. ft. of energy-efficient office space and an opportunity to expand to 8 million sq. ft. at each site. In New York, this should translate to an estimated tax revenue of more than $10 billion over the next 20 years because of the investment and job creation and $3.2 billion in Virginia. Amazon also agreed to donate space on its campus for a tech start-up incubator that could be used by artists and industrial businesses, to donate a site for a new public school and invest in infrastructure improvements and green spaces.

“Amazon understands that New York has everything the company needs to continue its growth. The State’s more than $100 billion transportation infrastructure program—the most ambitious in our history—combined with our education initiatives like K-12 tech education and the first-in-the-nation Excelsior Scholarship program, will help ensure long-term success and an unrivaled talent pool for Amazon,” said New York Governor Andrew Cuomo in the press release.

In Arlington, Amazon will invest $195 million in local infrastructure, including improvements to the Crystal City and the Potomac Yards Metro stations.

“Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century, and I’m excited to say that our innovative approach was successful. The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure that will bolster the features that make Virginia so attractive: a strong and talented workforce, a stable and competitive business climate, and a world-class higher education system,” said Virginia Governor Ralph Northam in the release.

Amazon announced more than a year ago that it was on the hunt for a location for its second U.S. headquarters. The search led to 20 finalist cities and months of rumors and private negotiations of what the chosen municipalities could offer the company. Amazon eventually settled on two sites to make it easier for the regions to absorb an influx of tens of thousands of workers.

Some have questioned the big packages offered to Amazon, triggering scrutiny of the entire process.

Margaret O’Mara, a history professor at the University of Washington, told The New York Times that Amazon was always going to pick locations with the best labor markets; but the competition let the firm to get even more incentives. “This has been a hallmark of Amazon and other tech companies since the very beginning,” she told the outlet. “They have been unwilling to pay any tax unless they absolutely have to, and they have leveraged their market power and the psychic place they hold to get away with it.”

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