It's Official: Long Island City, Northern VA Will Split Amazon HQ2
After narrowing down proposals from 238 North American cities to 20 finalists, months of secret negotiations, and endless reality show-esque drama, Amazon has finally announced the locations for its second headquarters, or HQ2.
As reports have speculated for the past week, Amazon ultimately decided to split its new headquarters between Long Island City, just across the river from Manhattan, and Crystal City, a suburb of Washington, D.C. in Arlington, Virginia. Amazon's two new headquarters will each house more than 25,000 employees.
A third new operations center in Nashville, Tennessee, will create more than 5,000 additional jobs. This "Operations Center of Excellence" in downtown Nashville will consist of one million square feet of office space and an estimated incremental tax revenue of more than $1 billion over the next 10 years, according to Amazon.
The company will receive performance-based direct incentives of up to $102 million based on the company creating 5,000 jobs with an average wage of over $150,000 in Nashville, plus additional cash grants and job tax credits from the state of Tennessee.
Hiring for all three new locations will begin in 2019.
Arlington, Virginia
Crystal City is an Arlington neighborhood located on a several-mile stretch of land east of Reagan National Airport and south of the Pentagon. It appears Amazon is trying to rebrand the area as "National Landing," but we'll have to see if that actually sticks.
The area will see an influx of 25,000 full-time jobs in 4 million square feet of office space, with the opportunity to expand to 8 million square feet. Amazon estimates an incremental tax revenue of $3.2 billion over the next 20 years.
Naturally, Amazon also gets a lot out of the deal. The company will receive performance-based direct incentives of $573 million, including a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted jobs.
The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.
In terms of infrastructure, Amazon will invest $195 million in infrastructure improvements to the Crystal City and the Potomac Yards Metro stations. The tech giant will also build a pedestrian bridge connecting Crystal City and Reagan National Airport.
The city of Arlington will put aside an estimated $28 million in future property tax revenue from Amazon to build more onsite infrastructure and public open spaces in the area.
"The majority of Virginia's partnership proposal consists of investments in our education and transportation infrastructure," said Virginia Governor Ralph Northam.
In looking for an HQ2 location, Amazon wanted to be near a major metro area with international airports and easy direct flights to Amazon's mothership in Seattle. While Reagan National flights are limited, Dulles International and Baltimore-Washington International are nearby(ish).
Long Island City
The Long Island City HQ will receive approximately $2.5 billion in investment from Amazon. As with the Virginia HQ, it will occupy 4 million square feet of "energy-efficient office space" with an opportunity to expand to 8 million square feet.
Amazon estimates the investment and jobs will create an incremental tax revenue of more than $10 billion over the next 20 years, but the tech giant is also receiving "performance-based direct incentives" of $1.525 billion from New York State as part of the deal.
The incentives, according to Amazon, equate to $48,000 per job calculated based on the average salary of the 25,000 new employees. The company estimates each new employee's average salary will be a whopping $150,000. This also includes a refundable tax credit through New York State's Excelsior Program of up to $1.2 billion, and a cash grant from Empire State Development of $325 million based on the building square footage of the new headquarters.
Amazon will also donate campus space for a tech startup incubator, a mixed-use space for artists and industrial businesses, and a site for a new public school.
New York Governor Amazon Cuomo called the LIC HQ2 "one of the largest, most competitive economic development investments in US history" and talked up the local talent pool from which Amazon will recruit. One part of this talent pipeline may be Cornell Tech, the new campus opened last year on Roosevelt Island, a stone's throw from the new Amazon HQ.
NYC Mayor Bill de Blasio said the state and local governments are working closely on urban planning, mentioning transportation, schools, and infrastructure but offering no specifics as of yet on how to deal with the massive influx of residents and commuters to the already overpopulated area. Not to mention the broken subways.
The announcement does note that a portion of Amazon's property taxes will be used to fund community infrastructure improvements.
"New Yorkers will get tens of thousands of new, good-paying jobs, and Amazon will get the best talent anywhere in the world," said Mayor de Blasio. "We're going to use this opportunity to open up good careers in tech to thousands of people looking for their foothold in the new economy, including those in city colleges and public housing."
However, there is also plenty of skepticism as to how this massive infrastructure project will impact the surrounding community and affordable nearby neighborhoods for middle-income families, including Astoria, Greenpoint, Jackson Heights, Sunnyside, and Woodside. New York State Senator Michael Gianaris and City Council Member Jimmy Van Bramer released a joint statement expressing reservations about the news and the tax breaks the company will receive.
"The burden should not be on the 99 percent to prove we are worthy of the 1 percent's presence in our communities, but rather Amazon to prove it would be a responsible corporate neighbor," they said. "We were not elected to serve as Amazon drones."
Newly elected Congresswoman Alexandria Ocasio-Cortez, whose district includes areas of northern Queens near Long Island City, expressed similar sentiments in a Twitter thread on the hew Amazon HQ.
This article originally appeared on PCMag.com.
