Amazon Picks Northern Virginia, New York City to Split New HQ

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Amazon will divide its much-anticipated new headquarters between Crystal City in Northern Virginia and Long Island City in Queens, New York, a source with knowledge of the plan confirmed to POLITICO on Monday night.

The move follows a search that spanned more than a year and prompted local governments across North America to scramble to offer tax breaks and other incentives to win the company’s favor.

Amazon’s split decision means the selected locations can expect to share as many as 50,000 jobs and roughly $5 billion in investment.

The news was first reported by The Wall Street Journal.

State and local officials are expected to make an official announcement on Tuesday, the source said. Amazon declined to comment.

By distributing the “HQ2” across the two communities, the e-commerce giant may be trying to ease the expected strain on housing and traffic that will accompany such a large project — and avoid the kind of civic tensions the company has sparked in its original home base of Seattle.

But by picking multiple winners, Amazon is opening itself to criticism that it’s simply launching satellite offices after a much-hyped national search that allowed it to extract taxpayer-funded incentives and other concessions from eager local officials, as well as detailed information about the hundreds of communities that submitted bids.

Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.) tweeted Monday night that her future constituents in Queens are expressing “outrage” at all the largesse being lavished on Amazon.

“Amazon is a billion-dollar company,“ she wrote. “The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here.“

The choice of Crystal City, just a stone’s throw from Washington, will boost the D.C. power base of Amazon CEO Jeff Bezos, who already owns The Washington Post and was recently declared the world’s richest man, with an estimated net worth of $136 billion.

The move, though, could exacerbate tensions with President Donald Trump, who has called Washington “a swamp,” frequently denounces the Post for its coverage of him and accuses Amazon of avoiding taxes and ripping off the U.S. Postal Service.

Northern Virginia and Queens beat out a mix of known technology centers like Boston and Austin, as well as up-and-coming hubs like Denver, Atlanta and Pittsburgh.

The Washington metropolitan area has long been considered a frontrunner, fueled by Bezos’ ties to the region. In addition to owning The Post, the Amazon CEO bought D.C.’s biggest house in 2016. Amazon sees the federal government as a huge customer for its cloud computing services, and the company maintains a large lobbying operation in the capital to push its agenda on everything from delivery drones to online privacy.

New York also checks many of the boxes for Amazon, including a large population rich in technically skilled talent. Gov. Andrew Cuomo told reporters last week that “I am doing everything I can” to lure the company, adding, “I’ll change my name to Amazon Cuomo if that’s what it takes.”

Amazon kicked off the “Hunger Games”-like headquarters search in September 2017, making an open call for bids from local and regional governments in North America. The company’s wish list included an area with more than one million residents as well as easy access to public transit and an international airport. Cultural fit — described as a diverse population and business-friendly government — was also a criterion.

That promise was enough to garner bids from 238 economic development offices across the U.S., Mexico and Canada, a list the company then winnowed to 20 finalists in January.

The national search sparked hope that Amazon might choose a promising mid-size city, perhaps in the American heartland, that would be transformed by an influx of high-paying, high-skilled jobs. That choice would have countered the narrative that the tech industry’s economic growth has mainly benefited coastal urban centers. Instead, the company has chosen East Coast hubs where it already has sizable operations.

The process attracted criticism from some who questioned the economic prudence of offering billions of dollars in tax incentives to one of the world’s wealthiest companies.

The bid of Newark, N.J., for example, included tax incentives that would climb to $5 billion or more depending on the number of people Amazon hired. Maryland’s appeal for Montgomery County totaled $3 billion in tax breaks and grants and $2 billion in transportation investments.

Such incentives present a gamble for officials who are banking on long-term economic growth to recoup massive corporate handouts. Wisconsin is grappling with those risks now after offering a multibillion-dollar financial package to Taiwanese electronics maker Foxconn to build a manufacturing plant in the state, only to see the company scale back its promises — a possible factor in Republican Gov. Scott Walker’s electoral defeat last week.

Much of Amazon’s selection process was kept hidden from the public as finalists signed non-disclosure agreements that precluded them from sharing details. Amazon visited each of the finalists this spring and, according to media reports, organized follow-up visits with top contenders this fall.


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