(Bloomberg)—Amazon.com Inc. will build new offices in New York City and Arlington, Virginia, ending months of jockeying between potential locations across the country vying for a $5 billion investment that promises 50,000 high-paying jobs over almost two decades.
Amazon also said it will create more than 5,000 jobs in Nashville, Tennessee, at a new operations center.
The anti-climatic ending to a more than year’s-long search—multiple office projects rather than a single second headquarters—shows Amazon thinks it’s better to tap multiple labor markets for future growth rather than try to house everyone in one city.
The sites in Long Island City, Queens, and in National Landing in Arlington, will be a boon for the New York and Washington D.C. metro areas and highlights Amazon’s willingness to target big talent pools with pricey payroll over smaller markets offering lower costs of living. It’s a disappointment for the 18 other cities, including Toronto and Chicago, many of which offered billions of dollars in tax breaks to lure the world’s largest internet retailer.
Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City. “We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come.”
Amazon captured North America’s attention in 2017, when it announced plans to build a second headquarters, prompting gushing overtures from politicians and publicity stunts from hopefuls eager to stand out. A group from Tucson sent a 21-foot-tall cactus to Seattle, which the company donated. A Georgia town offered to name a new city “Amazon.” Beyond hype, cities dangled generous tax incentives. Former New Jersey Governor Chris Christie publicly offered $7 billion in tax breaks and other benefits to bring Amazon to Newark. Most cities and states kept their offers private.
Since Amazon pared the list to 20 cities in January, speculation has been rampant, with lists handicapping supposed front-runners. Amazon had a broad list of criteria, including a population of 1 million, proximity to a major airport and a strong university system, without clearly identifying which factors were most important. Many guessed Amazon wanted to be close to Washington, because three of the finalist sites were clustered around the nation’s capital. Another theory was that Toronto—the only Canadian city on the list—might be chosen to serve as a hedge against U.S. President Donald Trump’s policies limiting immigration. Amazon is a frequent target of Trump’s criticism.
The search was also a not-so-subtle message to the city of Seattle, where some political leaders have blamed Amazon for skyrocketing property values, gridlocked highways and a growing homeless crisis. Tension between Amazon and the city spilled into the public spotlight earlier this year, when the city council approved and then overturned a payroll tax on big employers to pay for affordable housing and programs to fight homelessness. Amazon, the city’s dominant employer, threatened to push growth elsewhere if it was approved.
Now, New York and Virginia face the challenge of balancing the benefits of Amazon’s investment with the growing pains that can come with fast expansion and an influx of wealth. The company has helped fuel a tech boom in Seattle, where cranes building new office towers, apartment buildings and hotels dot the skyline.
And while New York’s top politicians enthusiastically wooed Amazon, some local lawmakers said the $808 billion company shouldn’t receive “ massive corporate welfare” in order to invest in the city and instead should use its resources to help solve public problems such as aging subways.
Amazon is No. 1 in the Internet Retailer 2018 Top 1000.