Capping a 14-month, hype-filled search, Amazon.com officially announced that its “HQ2” plans for a second base of operations in North America would actually be divvied up between New York City and Arlington, Va.
The company said it will establish dual East Coast headquarters located in Long Island City, in the New York City borough of Queens, and the Crystal City neighborhood in Arlington just south of Washington, D.C.
The HQ2 sweepstakes had pitted more than 200 cities, which was narrowed down to a shortlist of 20 in January, looking to woo Amazon with tax breaks and other amenities. Critics have speculated that Amazon all along wanted to open up large facilities in New York and/or the D.C. area, and that the HQ2 process was designed purely to extract more favorable economic terms.
All told, Amazon — one of the world’s most valuable corporations — will receive nearly $2.1 billion in tax incentives and cash grants to build the two East Coast headquarters. That includes $1.525 billion in New York based on the company creating 25,000 jobs in Long Island City; and $573 million in Virginia based on the same estimated job-creation target.
For NYC, Amazon projected it will deliver incremental tax revenue of more than $10 billion over the next 20 years. The company pegged tax revenue generated by the Arlington, Va., HQ location of $3.2 billion over the next two decades.
“Amazon demanded subsidies and terms from cities all over the country, demanded those terms be kept secret, then reneged on its promise to locate thousands of jobs,” Barry Lynn, executive director of liberal think tank Open Markets Institute, which has lobbied for the breakup of the internet giant. “Amazon is now treating even the biggest of American cities with the same disrespect it shows for the suppliers and the merchants who depend on its website to reach customers.”
Also Tuesday, Amazon announced that it has selected Nashville, Tenn., for a new business hub responsible for customer fulfillment, transportation, supply chain, and other similar activities. The Operations Center of Excellence in Nashville will create more than 5,000 jobs, the company said. Amazon is receiving $102 million in tax incentives in Nashville.
Amazon expects to begin hiring in 2019 for the Long Island City and Arlington headquarters locations as well as the Nashville hub.
“We are excited to build new headquarters in New York City and Northern Virginia,” Jeff Bezos, Amazon’s founder and CEO, said in a statement. “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.”
The ecommerce giant said it expects to invest some $5 billion and create up to 50,000 jobs for the New York and Northern Virginia campuses. After launching the HQ2 search in September 2017, Amazon received 238 proposals from cities in the U.S., Canada and Mexico.
Amazon’s two new satellite headquarters will help it recruit talent on the East Coast to support the ongoing growth of the massive company, whose 2017 sales of $178 billion were up 31% from the year prior. The company needed to expand after maxing out its footprint in Seattle, where it has over 45,000 employees.
With Amazon’s move into the Big Apple, “New York can proudly say that we have attracted one of the largest, most competitive economic development investments in U.S. history,” New York Gov. Andrew M. Cuomo said in a statement. He touted Amazon’s estimated average annual salary of $150,000 the new jobs in Queens.
While some politicos have embraced Amazon and the economic kick its new outposts promise to deliver, others have slammed the massive tax breaks the corporation is set to receive.
Queens residents have responded to Amazon’s planned move into Long Island City with “outrage,” Alexandria Ocasio-Cortez, the newly elected Democratic U.S. representative from New York, wrote in a series of tweets Monday evening.
“The idea that [Amazon] 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, after the Wall Street Journal reported NYC and Arlington were the final HQ2 selections.
Pictured above: Amazon founder and CEO Jeff Bezos