Amazon picks New York City, Virginia for US$5b new headquarters

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SAN FRANCISCO (Nov 13): Amazon.com Inc said on Tuesday it will build offices for up to 25,000 people in New York City's Queens borough and in Northern Virginia, near Washington, D.C., ending a year-long bidding war for a US$5 billion second headquarters that will now be split in two.

In addition, Nashville, Tennessee, will be home to Amazon's new East Coast hub of operations, adding 5,000 corporate jobs.

The move boosts Amazon's presence around New York City and the nation's capital while also giving it more of a foothold in the center of the country as it seeks to gain a recruiting edge over Silicon Valley tech companies.

The new Washington headquarters will be located in National Landing, in Arlington, Virginia, and the New York City headquarters will be located in the Long Island City neighborhood in Queens.

"These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," said Jeff Bezos, founder and CEO of Amazon.

Amazon had received more than 200 proposals from across North America vying for a home base in addition to its Seattle headquarters.

New York and Virginia beat out 18 others, including Los Angeles and Chicago, on a short list Amazon released in January.

Cities and states promised billions of dollars of tax breaks and other inducements in exchange for Amazon's so-called HQ2. They also handed over infrastructure, labor and other data that could prove useful in other ways to the world's largest online retailer.

It was not immediately clear how negotiations unfolded once Amazon settled on the plan for two offices. The company had originally said it would spend more than US$5 billion and add up to 50,000 workers at one location.

Amazon said the split gave it more geographic diversity for recruiting and could also help lessen congestion and cost-of-living increases that would have accompanied one bigger office.

The company has already had to navigate similar issues at its more than 45,000-person urban campus in Seattle. 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.

The headquarters split also means the economic benefits for the hosts will be muted relative to expectations, especially given the selected cities' size verses some of the other shortlist contenders.

The two areas already have relatively low unemployment rates, and Fitch Ratings has noted that even a full HQ2 only represented 1.5% of the Washington area and 0.5% of the New York area's labor force. The particular neighborhoods Amazon chose offer lower rents and more attractive zoning than central business districts nearby, a Brookings Institution report said.

Some critics had pushed for more transparency from cities and states in the bidding process, warning that the benefits of hosting a massive Amazon office may not offset the tax-payer funded incentives and other costs.

The company has said it helped boost Seattle's economy indirectly by US$38 billion between 2010 and 2016. Construction and service work has increased, catering to Amazon, and the company said it also helped attract other Fortune 500 businesses to Seattle.

Amazon has already been awarded more than US$1.6 billion of state and local public subsidies across the United States since 2000, with most of that after 2012, according to a database from the Washington-based government watchdog Good Jobs First.

Amazon did not comment on the Good Jobs First numbers but said it has invested US$160 billion in the United States since 2010, including in warehouses, data centers and employee compensation.