Published: Thu, November 15, 2018
Money | By Wilma Wheeler

Amazon picks New York City, Washington DC area for new HQs

Amazon picks New York City, Washington DC area for new HQs

The city proposed to build an "Amazon U" behind Dallas City Hall.

Amazon wanted even greater subsidies to come to Long Island City but the city and state turned them down, Mayor Bill de Blasio said Wednesday. Watch their remarks in the player above.

Separately, Amazon is tapping NY state for grants and tax breaks worth more than $1.5 billion, the richest in state history and more than triple those offered by Virginia.

Kim warned that NY is "literally sleepwalking into a supernova, catastrophic, financial meltdown" by subsidizing Amazon's campus-which will reportedly include a helipad for billionaire CEO Jeff Bezos to land and take off from during visits.

The combined offer from New York State and New York City is considerably richer than the one offered by Virginia, and does not require approval by any local or state legislative body. Amazon can also apply for separate incentives through New York City economic development programs.

That makes the area too wealthy to qualify for tax breaks on its own, but the tax law allows such areas to piggyback on nearby ones that do qualify.

But it's basically the same idea O'Brien launched before Amazon unveiled its search for a second headquarters: a mixed-use neighborhood with housing, large blocks of office space, and retail. In theory at least, the NY and Washington subway systems can ease housing price pressures by enabling workers to spread out.

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 buildings along the Potomac River, with a total of 450 apartments, opened in September. Large government contractors have offices and lobbying operations there. The area is trying to revive itself after thousands of federal jobs moved elsewhere. Being near the nation's capital could help Amazon with lobbying efforts as the company faces rising scrutiny from politicians.

The new outposts won't appear overnight.

In an effort to attract Amazon, cities and states promised billions of dollars of tax breaks and other inducements.

Amazon's requested perks include not just money, but a helipad at its planned new locations in Long Island City and National Landing - a tall order, given that Crystal City now falls within a flight restricted zone where the only allowed flights are those that go through the airport or have to do with law enforcement and the military.

When Amazon first announced that it was looking for new sites, it received more than 200 proposals from cities across North America that were vying to be a home base in addition to the company's Seattle headquarters.

The company says the investment is $5 billion heavy, and will mean plenty of new job openings - 50,000 of them.

And now in a surprise move, the eCommerce giant has made a decision to move forward with two HQ2 cities, dividing the second headquarters evenly between New York City and Arlington, Virginia. It plans to hold company-wide events at the new locations, including shareholder meetings.

According to the Washington Examiner, "The Commonwealth agreed to give Amazon a two-day notice prior to the release of any materials submitted as part of the agreement between the two parties under the Virginia Freedom of Information Act to allow the tech giant to 'seek a protective order or other appropriate remedy'". "What the selection of D.C. and NY underlines is how the dominant players continue to be dominant".

Although it wouldn't qualify as a "headquarters", Nashville won 5,000 jobs, with Tennessee kicking in $102 million in tax incentives including a job subsidy worth $13,000 per head.

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.

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