More than a year after kicking off a public search, Amazon announced today that it has officially decided on two locations for its “second headquarters”: the Long Island City neighborhood in Queens, New York, and Arlington, Virginia, just outside of Washington, D.C.
Amazon will split the projected 50,000 jobs it had planned to add to its second headquarters location between the two cities — so each area will get about 25,000 jobs. In a blog post, Amazon said that it will receive “performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City.” Part of this tax credit will come through New York State’s Excelsior tax incentive program. Another portion of it will come in the form of $325 million from Empire State Development, “based on the square footage of buildings occupied in the next 10 years.” Amazon said it will also apply for other tax incentive programs offered by the state of New York.
In Arlington, Amazon will receive “performance-based direct incentives of $573 million,” which includes a workforce cash grant from the state that’s dependent upon how many jobs Amazon will create over the next 12 years. That cash grant could reach up to $550 million if Amazon hits all of its goals. Amazon is also eligible to get a $23 million cash grant from Arlington over the next 15 years.
According to the incentive packages from both New York City and Arlington, Amazon has to create 25,000 jobs with an average wage of over $150,000 to receive all incentives.
Lastly, Amazon announced that at least one of the other 20 cities in contention for HQ2 will also get some new jobs. Amazon will open a new operations center in Nashville, which the company says will employ 5,000 full-time workers who will deal with customer fulfillment, customer service, transportation, and supply chain-related tasks. For this, Amazon will receive incentives of up to $102 million, “based on the company creating 5,000 jobs with an average wage of over $150,000 in Nashville.”
In choosing a New York City neighborhood and a Washington, D.C. suburb, Amazon selected locations with more established tech scenes than some of the other cities being considered. Outlets including the New York Times and the Wall Street Journal reported that Amazon decided to open offices in two cities instead of one because it was worried that one city couldn’t attract enough of the tech talent it was looking for.
In a blog post, Amazon answered questions about the HQ2 process — perhaps in response to some of the criticism it received for splitting the HQ2 into two cities. Amazon wrote: “We can recruit more top talent by being in two locations” and added that it had decided on New York City and Arlington because “we were looking for a location with strong local and regional talent — particularly in software development and related fields — to continue hiring and innovating on behalf of our customers.”
When Amazon announced in September 2017 that it was looking for a home for a planned second headquarters — dubbed “HQ2” — it said that it was open to considering any metropolitan area in North America with a population of more than 1 million people and a business friendly environment, educated talent pool, and direct flights to Seattle and other major cities. Amazon received 238 bids and then whittled that list down to 20 finalists in January. Finalists included the Northern Virginia area — where Arlington is located — and New York City.
The HQ2 bidding process drew criticism from some civic groups and even other mayors over the amount of money some locales were willing to give Amazon. Newark, New Jersey, for example, was willing to offer Amazon up to $7 billion in tax breaks between the state and local government to open its HQ2 there.
In New York, Governor Andrew Cuomo has been enthusiastic about landing Amazon, joking that he’ll change his name to “Amazon Cuomo” if that’s what it takes. However, a Long Island City council member and a state senator have expressed reservations about the Amazon deal, setting up a forthcoming battle about how much oversight Amazon will get once it lands in Long Island City.
Amazon will start hiring for jobs in the new New York City, Arlington, and Nashville offices in 2019.