Wednesday , October 27 2021

Amazon announces the winners of HQ2 – WSJ


Amazon said it would invest $ 5 billion in two new offices, each of which will have over 25,000 employees in Long Island City in New York and Arlington, Virginia, in the National Landing area that includes Crystal City and is located in Washington , DC, urban area.

The company also stated that it will create a new operations center in Nashville with over 5,000 jobs.

Amazon divided HQ2 in half between New York and North Virginia, partly because he wanted to hire a sufficient number of the best technicians. This decision effectively gives Amazon from Seattle a strong position in three coastal resorts that are left politically, at a time when technology companies are under surveillance because of their perceived elitism and liberal social views.

Government officials in both New York and North Virginia expected them to organize events for announcements on Tuesday.

A long search for Amazon in the new headquarters – called HQ2 – could be better called HQ squared. With 50,000 jobs and $ 5 billion in investments, look at how big cities went to buy a technological giant and why Amazon eventually settled in two locations.

The mayor of New York, Bill de Blasio, spoke on Monday morning in his weekly TV show, although he did not confirm that the city was officially selected. He hoped that HQ2 would come to New York. "We are talking about the single largest contract for economic development in the history of New York," he said.

Amazon's move to New York is bouncing off the rival Google & # 39; who is preparing for his own expansion in the city. The Wall Street Journal noted last week that


The unit will add office space to more than 12,000 new employees, which is almost double the number of current search engine employees in the city, as people who know the case say. On Monday evening at the scientific conference D.Live daily, Google's finance chief, Ruth Porat, confirmed that the company is planning to double the number of employees in New York by 7,000 in a decade.

The District of Columbia, which had three locations among the finalists, including Crystal City, was considered the leading candidate in part because the president of Amazon, Jeff Bezos, has a second home there and owns the Washington Post.

Crystal City, an office building from the 1960s and a residential building near the Pentagon have seen a decline in value over the past decade, as the main employers, including the Department of Defense and tenants from the private sector, have raised the bar.

Lure the Amazon: a look at encouragement


From the state: 1.525 billion dollars total, including:

  • $ 1.2 billion reimbursement of tax benefits from the Excelsior government program for 10 years, based on the creation of 25,000 jobs, which average USD 150,000
  • USD 325 million from Empire State Development based on the amount of space occupied by Amazon in the next decade

From city:

  • Amazon claims that he will apply for a subsidy program in New York that will provide him with a property tax reduction of up to 25 years
  • It will also look for incentives that could provide USD 3,000 tax benefits to any eligible employee in 12 years, which means a benefit of USD 900 million if all 25,000 employees are eligible for assistance. Amazon may also qualify for other tax breaks.


From the state:

  • $ 550 million in cash subsidies over 12 years based on Amazon, creating 25,000 jobs at an average of $ 150,000 in Arlington

From Arlington:

  • $ 23 million in cash over 15 years based on the increase in the municipal hotel tax


From the state:

  • $ 65 million in cash subsidies based on a company that creates 5,000 jobs in seven years
  • $ 21.7 million of state-owned tax relief based on job creation

From Nashville:

  • 15 million USD cash payments based on job creation

Its size and proximity to Washington, the airport Ronald Reagan in Washington, a subway station and other means of transport made it an attractive prospect for the ambitious plan of Amazon's second headquarters, as claimed by people who participated in the discussions. Adding to the appeal, it is also largely in the hands of one developer.

A potential downside is the notoriously bad traffic in the region, which would probably require significant new investments, according to people who know the matter. Amazon's influence on housing can be significant.

Virginia could fit Amazon politically as an important purple swing state that promises political influence regardless of which party is in power. While the D.C. area does not have the innovative culture of New York, is large, very diverse and can only be fashionable enough.

Long Island City, Queens, was a long-standing industrial estate that is experiencing a housing boom, and since 2006, more than 16,000 new apartments have been built. It is the fastest growing community in New York.

The area is located along the East River and is accessible to many subway lines, Long Island Rail Road and two ferry stops. It is also close to the airports of La Guardia and John F. Kennedy International.

While the city included four districts in its original offer, officials resisted Long Island City from the beginning, according to people familiar with the process.

Amazon began exploring in North America in September 2017, aiming to create a second, equal headquarters headquarters in Seattle. He said that the new location will have around 50,000 jobs and billions in investments.

Amazon narrowed down the competition to 20 finalist cities in January, then asked for data scattering and conducted two-day field visits, during which the cities tried to impress the company's economic development team.

Then came a big surprise a week ago when the Journal announced that Amazon was planning to split its second quarters equally between two locations, instead of choosing one city. The change of plans followed the Amazon executives' conclusion that they could employ more of the best technicians if they developed the office in two locations. By halving the size of Amazon, it would help solve potential problems related to housing, transit and other areas where the addition of tens of thousands of employees could cause problems.

The decision to divide what was considered one of the largest economic development projects in recent history has triggered an avalanche of criticism about Amazon's original intentions, but also new hopes. Some city officials say they have tailored their proposals to meet this need, while others say they think it has increased their chances.

The questions were also divided on how two new locations would be equal to the current Seattle base in Seattle, which employs over 45,000 people.

Amazon has many qualifications to select new headquarters headquarters, including access to public transport, proximity to the airport with direct flights to and from Seattle, and – perhaps most importantly – a pool of available technical talents nearby. The company also considered whether it is one of the largest companies in the city, something that can make it attract the same investigation it receives in Seattle due to social problems. In addition, Amazon hoped to show the real economic impact through investments in the new field, underlining its job creation opportunities.

Some economic development experts have scratched at Amazon's decision to publicize the process, which resulted in complications, including a longer than usual shortlist and speculative purchases of properties around the proposed facilities.

It also brought an additional analysis of the potential incentives that Amazon may receive to locate them in specific areas.

Nonetheless, this process resulted in a year of positive publicity, emphasizing Amazon's ability to create jobs and investments, even when the company met with critics, from President Trump to Vermont Sena. Bernie Sanders, who called the company on issues such as wages.

"It was a real platform for Amazon that introduced the transition from traditional e-commerce" into a major technology company that creates jobs in various industries, "said John Boyd, chief location consultant at Boyd Co. "It was also a platform for cities to promote in the global audience."

The choice of new office sites follows Amazon's September statement that it will raise the minimum wage for warehouse employees to USD 15 per hour. Last year, Amazon also announced large employment plans because it is building new warehouses and expanding its workforce in the United States.

Amazon's decision leaves the group of cities that spent months of resources and time without a clear reward. Some cities claimed that this process raised awareness of other potential proposals for economic development.

write to Laura Stevens on [email protected] and Keiko Morris on [email protected]

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