Amazon hunting for second home; cities start lining up
NEW YORK—Amazon, bursting out of its Seattle headquarters, is hunting for a second home. Must haves: A prime location, close to transit, with plenty of space to grow.
The company said Thursday it will spend more than $5 billion to build another headquarters in North America to house as many as 50,000 employees. It plans to also stay in its sprawling Seattle headquarters, with the new space “a full equal” to that, said founder and CEO Jeff Bezos.
Amazon’s announcement highlights how fast the e-commerce giant is expanding, and its need to find fresh talent to fuel that growth. With the lure of so many new jobs, city and state leaders were already lining up Thursday to say they planned to apply. Among them: Chicago, Philadelphia and Toronto. They have a little more than a month to do so through a special website , and Amazon said it will make a decision next year.
Its requirements could rule out some places: Amazon wants to be near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport; have direct access to mass transit; and be able to expand that headquarters to as much as 8 million square feet in the next decade. That’s about the same size as its current home in Seattle, which has 33 buildings, 23 restaurants and houses 40,000 employees.
“They’re so big in Seattle, they’re running out of room,” said Kevin Sharer, a corporate strategy professor at Harvard
Business School.
Amazon said it will hire up to 50,000 new full-time employees at the second headquarters over the next 15 years, and they would make an average pay of more than $100,000 a year.
The company is hoping for something else from its second hometown: tax breaks, grants and other incentives. A section of the proposal that outlines those says “the initial cost and the ongoing cost of doing business are critical decision drivers.”
Brad Badertscher, an accounting professor at the University of Notre Dame, said the public search appeared to be a way to start a bidding war among cities.
“This was like an open letter to city leaders saying, ‘Who wants Amazon and all our jobs?’” Badertscher said. “This is Jeff Bezos doing what he does best: adding shareholder value and getting the most bang for the buck.”
Amazon gets tax breaks when cities compete for its massive warehouses, where it packs and ships orders. The company received at least $241 million in subsidies from local and state government after opening facilities in 29 different U.S. cities in 2015 and 2016, according to an analysis by Good Jobs First, a group that tracks economic development deals.
In explaining why it was holding a public process, Amazon said on its site that it wanted “to find a city that is excited to work with us and where our customers, employees, and the community can all benefit.”