Amazon opens bidding to cities for US$5bil second headquarters

Amazon.com Inc said on Thursday it would build a US$5bil second headquarters in North America, kicking off a competition between cities and states to offer tax cuts and incentives that could bring 50,000 new jobs.

The largest e-commerce company said it intended to create

“HQ2”, a headquarters that would be a ”full equal” to its Seattle office, chief executive Jeff Bezos said in a statement.

The company wants a metropolitan area of more than a million people with an inter- national airport, good education and mass transit.

Amazon was likely to land its second headquarters in a cheaper city than Seattle and score subsidies.

The company promised up to 50,000 jobs averaging more than US$100,000 in annual compensation over the next 10 to 15 years.

Cities and states immediately began saying they would bid. Dallas, Houston, Toronto, St Louis, Kentucky and Miami are a few that are committed to bid.

Chicago Mayor Rahm Emanuel has made a case for his city in discussions with Bezos, a Chicago spokesman said.

Companies with two headquarters are rare and distance could challenge the management abilities of Bezos and other leaders, but some investors and analysts also saw the geographical diversification as a way to cut costs and risk.

It would also make it easier for the conglomerate to break up down the line if it so chooses. “The company is changing radically and it depends so heavily on disruptive thinking. Moving to a new city and finding a new talent pool is a good idea,” said Antony Karabus, chief executive of HRC Retail Advisory.

Incentives from land to fee cuts to relocation packages will be a major part of the decision, Amazon said.

Local governments have gone to great lengths to secure jobs and investment. Wisconsin’s legislature, for instance, recently voted to give Taiwanese manufacturer Foxconn a US$3bil incentive package to build a US$10bil liquid crystal display factory in the state. — Reuters