Amazon Makes It Official: Selects New York City, Arlington For New Headquarters


Alexandria Ocasio-Cortez, a newly elected member of Congress who represents Long Island City, the NY neighbourhood Amazon has chosen, said her office had received numerous calls from constituents expressing "outrage" about the tax benefits the firm is due to receive. The total tax credit for Amazon is estimated at $102 million with $86 million coming from the state of Tennessee for job creation and excise tax over the next 7 years, and $15 million from the city of Nashville for job creation over the next years as well. Hiring at both the new facilities will begin in 2019.

In each case, the deal is largely the same - Amazon has reached performance-based direct incentive agreements with each city. Others slammed the company for settling on obvious cities after a lengthy search that drew 238 bids, including many from smaller cities in need of the "transformation" Amazon promised.

Amazon's search for a second headquarters captured the attention of almost every economic development agency in the country, with more than 200 submitting bids to land what had originally been described as 50,000 jobs and billions in investment.

Amazon hopes to invest $230 million United States dollars (roughly $304 million CAD) to create approximately 5,000 jobs in the region.

What do the cities themselves get for all that effort?

"Were they going to get that kind of money here?"

It expects an average wage of more than $150,000 for employees in each new office.

The two areas already have relatively low unemployment rates, and Fitch Ratings has noted that even a full HQ2 only represented 1.5% of the Washington area and 0.5% of the NY area's labor force.

- 1 million square feet of energy-efficient office space. Both are waterfront communities away from overcrowded business districts, giving Amazon space to grow.

More news: Google Night Sight debuts for all Pixel phones
More news: California wildfires deadliest in state's history
More news: 9 killed as California wildfires spread

The Wall Street Journal reported about a week ago that Amazon was in late-stage negotiations with several locations including New York, Crystal City as well as Dallas.

"Amazon is making enormous investments in warehousing, regional hubs and in retail stores". Among its 20 finalists, the company had selected two locations in the NY metro area and three in the D.C. area.

Are these the cities that would have benefitted most?

Chief executive Jeff Bezos said: "These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come". Nonprofit groups like Per Scholas, a Bronx-based job-training program, and Pursuit (formerly C4Q), a Queens technology training center, were involved in the pitch to woo Amazon. That works out to $61,000 in incentives provided to Amazon for each job in Long Island City and roughly $23,000 for each job in Arlington. Virginia's is the 26th, just above the $750 million deal Solar City secured to build a factory in Buffalo in 2014.

The awarding of Amazon's second headquarters to two affluent localities has fanned intense speculation around a key question: For the winning cities, will the economic payoff prove to be worth the cost?

Amazon has done well, here, from the perspective of its shareholders.

The combined offer from New York State and New York City is considerably richer than the one offered by Virginia, and does not require approval by any local or state legislative body. But I don't know that I'd be sighing with relief upon hearing the news.

In a tweet thread from Queens newly minted Congresswoman Alexandria Ocasio-Cortez, she called the Amazon announcement "extremely concerning". Here are four areas to watch, according to economists and economic development experts. "The idea is that, above and beyond tax credits and tax exemptions, investing in things like bridges, connecting to Reagan Airport [near Arlington], improving roads - that serves the public good, and it helps to create entrepreneurship as well".