Amazon announces HQ2 will be split between New York City, northern Virginia

Anna Jefferson
November 14, 2018

But splitting the second headquarters between Long Island City and Crystal City begs the question of whether the new locations will be headquarters at all.

Long Island City and Crystal City meet Amazon's other requirements: be near a metropolitan area with more than 1 million people; be within 45 minutes of an worldwide airport; have direct access to mass transit; and have room to expand.

However, at a press conference Tuesday, Mayor Bill Peduto said the city and county will release its Amazon bid, perhaps as soon as Thursday.

In setting off the flurry of interest, Amazon said it could spend more than $5 billion to build its second headquarters over the next 17 years. "Amazon may not be building its next headquarters here, but the company remains an excellent partner with multiple facilities in central OH".

Ultimately, Amazon made a decision to select two additional locations, and will now have three official headquarters in America, including the main headquarters in Seattle. Tuesday's much-anticipated announcement of the locations for Amazon's "HQ2" also included details-which had previously been kept from the public-about the economic incentives that successfully lured the Seattle-based firm to the east coast's political and economic hubs.

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State and city officials today announced a blockbuster deal to lure roughly half of Amazon's planned second headquarters to Long Island City, where the company will build a multimillion-square-foot, waterfront campus, invest almost $4 billion and hire as many as 40,000 employees, who will earn an average salary of $150,000 a year. Former New Jersey Governor Chris Christie publicly offered $7 billion in tax breaks and other benefits to bring Amazon to Newark.

Are these the cities that would have benefitted most?

Hiring is set to begin in 2019. Amazon is a frequent target of Trump's criticism. Amazon also wants to able to attract top technical talent and be able to expand the headquarters. "I think two made more sense". The Washington, D.C. area stood out with a large educated workforce of three million people and a transit system that has plenty of capacity. From the county, Amazon will get a portion of hotel taxes expected to be $23 million over the next 15 years.

At the outset of its search past year, Amazon said it was looking for a business-friendly environment. The state offered additional incentives. An affordable housing crisis there prompted the city council to adopt a head tax on businesses in May, which Amazon helped overturn in a subsequent city council vote.

That's the sort of thing a place like NY (home to one of the nation's worst business tax climates) could have used.

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"The state is still operating in the mindset of a New York City from 1980, where we're an economic basket case and we've lost our economic prestige and jobs", said James Parrott, director of the Economic and Fiscal Center at the New School.

Yes, the numbers are staggering-New York state's pledge of $1.52 billion for 25,000 jobs works out to more than $60,000 in taxpayer support per new job created-but Amazon appears to have selected NY and the D.C. area based on more than just how many zeroes local officials agreed to put on the giant cardboard check. Amazon will receive $1.5 billion if it meets its job-creation goals.

"At the end of the day, it suggests that even New York City and Virginia and Nashville didn't really need to offer those subsidies, because Amazon is chasing other factors", Michael Farren, a research fellow at the Mercatus Center, a free market think tank housed at George Mason University, tells Reason. It also pledged to invest in infrastructure improvements and new green spaces.

Officials in both Virginia and NY sought to point out that the tax benefits for Amazon were tied to job creation, and that they expected government coffers to see a positive return from Amazon's investments.

"I said we would build a new New York State - one that is fiscally responsible and fosters a business climate that is attractive to growing companies and the industries of tomorrow", New York Governor Andrew Cuomo said in the statement from Amazon.

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That includes a refundable tax credit worth $US48,000 per job for 25,000 jobs with an average wage of over $US150,000.

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