What to Know
- The retailer's headquarters in the D.C. metro area will be located in an area called National Landing.
- National Landing includes Crystal City, Pentagon City and Potomac Yard.
- The new headquarters will bring 25,000 jobs to Northern Virginia, with an average wage of over $150,000.
It's official: Amazon has announced that its new headquarters will be split between Northern Virginia and New York City.
The company announced Tuesday that Arlington, Virginia, and New York City were its picks, after more than a year of unprecedented competition among governments across North America trying to woo the tech giant.
"We are excited to build new headquarters in New York City and Northern Virginia," Jeff Bezos, founder and CEO of Amazon, said in a statement.
The retailer's headquarters in the D.C. metro area will be located in an area that Amazon and Virginia officials are calling National Landing. This is a newly branded neighborhood that includes Crystal City and Pentagon City in Arlington and Potomac Yard in Alexandria, Gov. Ralph Northam said in a statement.
Amazon's initial growth is expected to focus on the Crystal City and Pentagon City portions of National Landing, Northam said.
The company will start hiring for the National Landing location next year, said Brian Huseman, Amazon's vice president of public policy, during a press conference Monday afternoon.
The retailer's New York City location will be in Long Island City, on the west end of Queens.
Both locations are riverfront stretches of major metropolitan areas with ample transportation and space for workers.
"These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities," Bezos said.
That excitement isn't universal. Some see the billions in tax breaks as corporate welfare while others are worried about home values and school overcrowding in areas where it's already a problem for many residents.
Virginia state representative Lee Carter warned that thousands will be priced out of their homes with the influx of high-paid tech workers. He also raised the issue of overcrowded schools and traffic.
One woman asked News4, "Where will we park?"
The two East Coast locations will split the 50,000 jobs Amazon had promised HQ2 would initially bring to just one city. The average wage for these jobs will be over $150,000, Amazon says.
Virginia taxpayers will subsidize each of those high-salary jobs with a $22,000 incentive, up to $550 million. It could be higher if the workforce expands.
In addition to the 25,000 jobs Amazon will create in the commonwealth, Northam's office estimates the new headquarters will also create more than 22,000 permanent, direct and indirect jobs in Virginia.
Amazon says that as a part of the new headquarters, Arlington will also benefit from $2.5 billion in Amazon investment, 4 million square feet of energy-efficient office space with the opportunity to expand to 8 million square feet and an estimated incremental tax revenue of $3.2 billion over the next 20 years.
The retailer says it will also help improve its new neighborhood, promising an investment of $195 million in infrastructure for National Landing.
Amazon says the infrastructure plan includes improving the Crystal City Metro station and the yet-to-be-built Potomac Yard station. Also, a pedestrian bridge will connect National Landing and Reagan National Airport, and work will be done to improve the pedestrian experience along Route 1 over the next 10 years.
The retailer selected property management and development company JBG Smith as its partner for the National Landing project.
JBG Smith has been working since early 2017 to revitalize the area with a plan that includes new retail space, apartments and office space totaling more than seven million square feet, JBG Smith CEO Matt Kelly said.
"Amazon's selection of National Landing will enable us to accelerate these plans, and to deliver on the promise of a more walkable, amenity-rich, mixed-use environment with abundant green space and local retail," Kelly said.
JBG Smith will also work to address the need for affordable workforce housing in the region, he said.
In May, the company launched the Washington Housing Initiative, which will work to preserve or create 3,000 affordable housing units across the most rapidly developing neighborhoods in D.C., Maryland and Northern Virginia.
Families earning about $60,000 to $70,000 — roughly 60 percent of the D.C. area's median income — are the targeted beneficiaries.
"This is a big win for Virginia — I'm proud Amazon recognizes the tremendous assets the Commonwealth has to offer and plans to deepen its roots here," Northam said.
During Monday afternoon's press conference, Northam said Virginia's proposal to Amazon includes investments to double Virginia's tech talent pipeline, with a goal of 25,000 to 35,000 new graduates in computer science and related fields within two decades.
Virginia is expected to funnel $375 million into developing master's degrees programs to bolster the state's technical workforce, and a new Virginia Tech campus for graduate students in Arlington is expected to attract more tech talent right to the doorstep of the corporate campus.
But Northam said the effort would start with a STEM and computer science curriculum for every student in the K-12 public school system, and will provide investments in professional development for teachers, support for summer and after-school programs, the expansion of internship opportunities for students studying computer science and related fields, and more.
Both Maryland Gov. Larry Hogan and D.C. Mayor Muriel Bowser expressed happiness for Virginia despite losing their own bids for the new headquarters.
"Amazon's decision to locate one of its new headquarters facilities in Northern Virginia is a tremendous win for the entire Capital region. Collectively, we will not only gain 25,000 corporate-level jobs, but also many businesses that are part of Amazon’s supply chain," Hogan said.
Bowser added, "We have always said that we would put our region and its people up against any other in the world. And as the federal government slows its growth, today's announcement demonstrates that the technology sector will continue to flourish in our region as our economy diversifies."
In addition to the headquarters in Northern Virginia and New York City, Amazon will also open an Operations Center of Excellence in Nashville, Tennessee.
News organizations reported last week that Amazon planned to build offices in two cities instead of one, in a surprise move. At the time, Amazon declined to comment on the anonymous comments of people familiar with the discussions between the company and officials in New York and Virginia.
When kicking off its hunt for a second home base in September 2017, the company promised 50,000 new jobs and construction spending of more than $5 billion. The retail behemoth made clear that tax breaks and grants would be a big factor in its decision.
In addition to looking for financial incentives, Amazon stipulated that it wanted to be near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport; have direct access to mass transit and be able to expand that headquarters to as much as 8 million square feet in the next decade.
The online retailer received 238 proposals from cities and regions in the U.S, Canada and Mexico.
HQ2 Contenders Pitched Financial Incentives
In January 2018, Amazon whittled down the list to 20 contenders. Washington, D.C.; Montgomery County, Maryland; and Northern Virginia made the cut. Other cities still in the running included Atlanta, Boston, Miami, New York City and Toronto.
Many cities were tight-lipped about the proposals they made to woo the online retailer.
Washington, D.C. offered Amazon a number of incentives, according to a Freedom of Information Act request filed by WAMU and obtained by the Washington Business Journal.
The incentives included relocation reimbursements for workers who move to the District, a five-year corporate franchise tax exemption and a five-year corporate franchise tax exemption.
Economic development officials in Virginia refused requests from several media organizations to see the proposal the state pitched. The Virginia Economic Development Partnership's general counsel argued that releasing the proposal could jeopardize future attempts to attract companies to Virginia.
The incentive package for creating new jobs alone could cost as much as $550 million, on top of other commitments. But Gov. Northam says the taxpayer money will benefit the community.
"Over 70 percent of those commitments go to education, workforce development, infrastructure, transportation or affordable housing," Northam said.
Montgomery County's proposal highlighted the area's highly educated workforce, diverse population and transportation system. Hogan offered a $5 billion package of tax incentives and transportation upgrades.
As governments wooed Amazon, some leaders and residents told Amazon to stay out. They said governments should not have offered billions in incentives without telling the public the details. Also, they said an HQ2 in the D.C. area would turn housing costs and availability, as well as traffic, upside down.
"This entire process has been conducted in remarkable opacity, which creates a race to the bottom between municipalities to offer the biggest package of tax and subsidy deals to Amazon that they can cobble together," Colin Downes, a spokesman for the Metro DC Chapter of the Democratic Socialists of America previously told News4.
Amazon will remain in its sprawling Seattle headquarters, and the second center would be "a full equal" to it, Bezos previously said.