Sunday , March 7 2021

Amazon Announces Winners of HQ2 – WSJ



Amazon said it would evenly split the second base between Long Island City in New York and the Crystal City neighborhood in Arlington County, both of which are located directly opposite the main city center. The company plans to divide operations with as many as 25,000 employees in each location.

Amazon also announced Nashville would be home to a "center of excellence operations" with more than 5,000 jobs.

The decision effectively gave Amazon a large presence on three beach hubs that were politically lean left, as technology companies were under scrutiny for perceptions of elitism and their social liberal views.

Government officials in New York and Northern Virginia plan to hold an event for the announcement on Tuesday.

New York City Mayor Bill de Blasio discussed the Amazon deal late Monday during his weekly television appearance, although he did not confirm that the city had been officially chosen. He hopes that HQ2 will come to New York City. "We are talking about the biggest economic development agreement in the history of New York City," he said.

Amazon's move to New York complains with rival Google, which is preparing for its own expansion in the city. The Wall Street Journal reported last week that

Alphabet
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the unit will increase office space for more than 12,000 new workers, almost double the current giant search staff in the city, people familiar with the matter said. On Monday evening at the D.Live technology conference in the Journal, Google finance chief Ruth Porat stressed the company's plan to double its 7,000 New York City staff for a decade.

The District of Columbia, which has three locations among the finalists including Crystal City, has long been considered a prime candidate in part because Amazon Chief Executive Jeff Bezos has a second home there and he owns the Washington Post.

Crystal City, a 1960s office and housing development near the Pentagon, has seen its wealth diminish over the past decade, because large companies, including the Department of Defense and private sector tenants, have withdrawn shares.

Its thin size and proximity to Washington, Reagan National Airport, Metro stops and other transportation, makes it an attractive prospect for the ambitious plans for the second Amazon headquarters, according to people who have been involved in the discussion. Adding to its appeal, it is also mostly in the hands of one developer.

A potential disadvantage is that traffic is very bad in the region, which is likely to require significant new investments, according to people familiar with the matter. The impact of Amazon on housing can be enormous.

Virginia could be suitable for the Amazon politically, as an important purple swing country that promises political influence no matter which party is in power. While the D.C area has no up-to-date New York culture, it's very big, very diverse and maybe quite hip.

Long Island City, in Queens, is an old industrial area that is experiencing a boom in residential housing, with more than 16,000 new apartments built since 2006. This is the fastest growing community in New York City.

The neighborhood is along the East River and is accessible by several subway lines, Long Island Rail Road, and two ferries stop. Also close to La Guardia International Airport and John F. Kennedy.

While the city included four neighborhoods in its original offer, officials leaned on Long Island City from the start, according to people familiar with the process.

Amazon began its search in North America in September 2017, with the aim of creating a second headquarters that is equivalent to its headquarters in Seattle. It said the new location would accommodate around 50,000 jobs and represent billions in investment.

Amazon narrowed the contest to 20 finalist cities in January, then asked for reams of data and made a two-day visit to the site, where the city tried to impress the company's economic development team.

Then came a big surprise a week ago when the Journal reported that Amazon planned to divide the second headquarters evenly between the two locations rather than choosing one city. Changes to the plan came after Amazon executives concluded that they could recruit more of the best technology talent if deploying offices in two locations. And by halving the size, Amazon will help alleviate potential problems with housing, transit and other areas where adding tens of thousands of workers can cause problems.

The decision to divide what is considered one of the biggest economic development projects in history has recently sparked confusion about critics of Amazon's initial intentions, but also new hopes. City officials said they would adjust their proposals to match those needs, while others said they thought it would increase their city's chances.

The split also raises questions about how equal the two new locations are with the current Seattle base in the Amazon, which employs more than 45,000 people.

Amazon factored in a number of qualifications for the selection of its new headquarters location, including access to mass transportation, proximity to the airport with direct flights to and from Seattle and – perhaps most important – a group of technology talents available nearby. The company also weighs whether it will be one of the biggest companies in the city, something that might make it a magnet for the same type of supervision that it receives in Seattle over social problems. Plus, Amazon hopes to show the real economic impact through investment in new areas, highlighting the ability to create jobs.

Some economic development experts scratched their heads at Amazon's decision to make the process public, resulting in complicated factors including longer-than-usual short lists and speculative real-estate purchases around the proposed location.

This has also brought additional oversight of the potential incentives that Amazon might receive to be placed in certain areas.

However, the process has resulted in a positive year of publicity, highlighting Amazon's ability to create jobs and investment, even when companies have faced criticism ranging from President Trump to Vermont Senator Bernie Sanders, who has called the company on issues such as wages.

"This is truly a platform for Amazon to market the transition from traditional e-commerce" to a large technology company that creates jobs across industries, said John Boyd, principal at Boyd Co.'s site selection consultant. "It's also a platform for cities to promote themselves to a global audience."

The choice of his new office site follows the September Amazon announcement that it would raise its minimum wage for warehouse workers to $ 15 per hour. Amazon has also announced a large recruitment plan over the past year because it is building more warehouses and expanding its workforce in the US.

Amazon's decision left a group of cities that spent months of resources and time without clear rewards. Several cities said the process raised awareness for other potential economic development agreements.

Write to Laura Stevens at [email protected] and Keiko Morris at [email protected]


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