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Amazon picks New York, Virginia for new campuses

November 30, 2018

Arlington County, Virginia, and New York City on Tuesday won the sweepstakes for Amazon’s second “headquarters,” which promises to bring 25,000 jobs to each city over the next decade.

The Seattle-based online retail giant is expected to begin moving employees next year into Crystal City, which sits across the Potomac River from the District of Columbia, and Long Island City, a former manufacturing hub in Queens.

The potential for the sites’ economies is huge. Amazon said Tuesday that it plans to invest $5 billion between the cities.

Arlington will receive $2.5 billion for construction and operation of a new 4 million-square-foot office space, with the capacity to double in size over the next 20 years.

In exchange, Virginia offered Amazon performance-based incentives of $573 million based on the company’s creation of tens of thousands of jobs with wages averaging $150,000 a year. The incentives include a workforce cash grant of $550 million based on $22,000 for each job created over the next 12 years. Amazon will receive the grant only if it creates the promised jobs.

The company also will receive from Arlington County a cash grant of $23 million over 15 years, funded by an increase in the county’s hotel tax.

New York is ponying up $1.5 billion in incentives.

“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 CEO Jeff Bezos said Tuesday. “The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

Gov. Ralph Northam said the decision is a “big win for Virginia,” which bested 18 other jurisdictions that were narrowed down from nearly 238 proposals across the U.S., Canada and Mexico.

New York Gov. Andrew Cuomo said the selection is a reflection of his administration’s mission to be fiscally responsible and attractive to new business.

“We’ve delivered on those promises and more, and today, with Amazon committing to expand its headquarters in Long Island City, New York can proudly say that we have attracted one of the largest, most competitive economic development investments in U.S. history,” Mr. Cuomo said.

Amazon estimates that it directly contributed $38 billion to Seattle’s economy from 2010 to 2017. About 40,000 employees work in Seattle and receive total annual compensation of $25.7 billion.

The Seattle headquarters, established in 2010, counts 33 buildings and more than 8.1 million square feet. That includes 24 restaurants and eight other businesses for employees to use on campus.

The company estimates that its presence increased personal income of non-Amazon employees by $17 billion from 2010 to 2016. The number of Fortune 400 companies with engineering research and development centers in the Seattle area rose from seven in 2010 to 31 in 2017.

Amazon is renaming Crystal City and the area around it, including Pentagon City, Potomac Yards and the area around Ronald Reagan Washington National Airport “National Landing.”

“That’s the kind of wider footprint that I think they want to be associated with the Amazon site,” said Alan Berube, a senior fellow at the Brookings Institution and deputy director of the Metropolitan Policy Program. “Such that it is served by the airport, served by four different Metro stations they indicated they’re going to be building new pedestrian bridges to make it an easier place to get around by foot and by bike. There could be a lot of wider public benefits associated with this decision from these infrastructure investments.”

Arlington will donate $28 million for on-site infrastructure and open space, Amazon said. The company will invest in upgrading the Crystal City and Potomac Yards Metro stations, building a pedestrian bridge to connect Crystal City with the airport and improving the safety and accessibility of “the pedestrian experiment crossing Route 1 over the next 10 years.”

Amazon also announced an Operations Center of Excellence in Nashville, Tennessee, that it said will create 5,000 full-time, high-paying jobs.

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