NYC, DC area win Amazon’s approval
Company extends its footprint with HQ2 decision
WASHINGTON – Amazon named New York City and the Washington suburb of Arlington, Va., as the areas that will divvy up 50,000 high-paying jobs the online retail giant is likely to bring.
Tuesday’s announcement came after 24 months of intense jockeying by more than 230 cities vying to become the home of Amazon’s second headquarters.
Amazon chose two areas that have long been front-runners among the 20 finalists announced Jan. 18.
Amazon’s request for proposals listed multiple requirements, including tax incentives and a business-friendly environment. The Seattle-based company aims to hire the best and the brightest talent to keep up its ferocious pace of innovation, even as other tech companies compete to hire those same workers.
New York City and the greater D.C. area fit that bill admirably, said Jeffrey Shulman, a professor at the University
“People who want to work at Amazon will now have three cities to choose from.”
Jeffrey Shulman, University of Washington
of Washington’s school of business who studies Amazon’s effect on Seattle.
“Both of those cities are attractive places to live where they have both a talent pool and the cultural amenities that make someone willing to uproot their lives and move there,” he said. “People who want to work at Amazon will now have three cities to choose from rather than one or two.”
D.C. the front-runner
The Washington metro area landed three spots among the 20 finalists when the company narrowed its list of candidate sites in January: Montgomery County, Maryland; Northern Virginia (Loudoun County and Fairfax County); and Washington itself.
As the seat of the nation’s government, Washington stood out among the potential sites. The area’s public transportation system and its white-collar, well-educated workforce are strengths. Its location in the Eastern Time Zone makes it good for staying in touch with subsidiaries across the Atlantic. Amazon founder Jeff Bezos, who owns The Washington Post, purchased a $23 million mansion in the area, the largest private residence in the nation’s capital.
“Then you put Bezos having a house here and owning The Post and increasingly needing to influence federal policy, this isn’t a bad place to be,” said economist Stephen Fuller, a professor of public policy and regional development and director of the Fuller Institute at George Mason University in Fairfax, Virginia.
Northern Virginia stood out as the prime choice in the region for its techcentric surroundings. A crossroads of the internet, the region has many data centers where tech giants such as Facebook, Google and Salesforce connect. Amazon Web Services has 29 individual data centers in Northern Virginia. According to Loudoun County, where most of the data centers are, 70 percent of global internet traffic flows through it.
The case for New York
Probably highest on Amazon’s list of must-haves is access to tech and other talent. The New York Metro area has al- most 1.3 million workers in the relevant fields of management, business, finance, math, public relations and sales.
New York is a magnet for young professionals, who prize urban areas, rich culture and vibrant art scenes. It has a massive, if somewhat beleaguered, transit system.
It’s a large enough city that adding 25,000 highly paid workers won’t seriously distort the job market in the ways it might have in smaller cities such as Raleigh, North Carolina, or Columbus, Ohio.
Though housing in New York City is tight, Long Island City at the western edge of the borough of Queens has been on an apartment building spree. A total of 41 apartment buildings have been built in the area over the past eight years, with 12,533 apartments by 2017, according to RentCafe.
The search process
The search began Sept. 7, 2017, when Amazon announced it was looking for a second headquarters, one that would be co-equal to its Seattle home. It posted a request for proposals outlining what information and attributes it looked for.
Such an open process for an economic development proposal is rare. These searches are usually done in secrecy and announced only after a site has been chosen. Amazon instead made its requirements public and let the offers roll in.
The prospect of investment and bragging rights from securing the world’s most valuable company pitted tiny cities against metropolises, each striving to convince the Seattle company it had the right workers, transportation, culture and tax breaks. It was an effort built for the age of social media, when everything takes place in public and there is constant jockeying for top billing.
In the end, 238 cities sent in proposals by the deadline of Oct. 19, 2017.
On Jan. 18, a short list of 20 finalists was announced. The cities and areas were Atlanta; Austin, Texas; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland; Nashville, Tennessee; Newark, New Jersey; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh, North Carolina; Toronto; and Washington.
A team from the company visited each of the finalists in the spring and summer, then spent the next months crunching numbers and doing due-diligence checks in a tightly controlled process.
Though all 20 cities were eager for the jobs and investment the headquarters will bring, detractors argued cities offered enormous tax credits and other incentives to entice Amazon with little proof that the city would come out ahead. Some residents worried that the influx of highly paid tech workers would worsen commutes and drive up steep housing prices.
Almost none of the finalist cities told the public – or even their city councils – the dollar amounts. This is legal because most of the deals were put together by local development agencies.
Not here, please
The search sparked several campaigns, some national and some local, urging Amazon not to locate in a given area.
At a national level, gay rights advocates ran a “No Gay? No Way!” campaign to pressure Amazon to avoid building its second headquarters in a state that does not protect its residents from discrimination for their sexual orientation or gender identity. It called out nine finalist cities in states that lack anti-gay-discrimination laws: Austin, Dallas, Nashville, Atlanta, Columbus, Indianapolis, Miami, Raleigh and Arlington.
Smaller groups urged Amazon to stay out of their cities because they didn’t want the negatives placement was likely to bring: higher housing costs due to an influx of well-paid workers, gentrification and more traffic.
What happens next?
The winners can expect a few things to happen right away. First, big parties held by city officials. Then a land rush.
Amazon staff won’t start showing up for months, if not years, but speculators, developers and those expecting to ride a significant rise in housing prices in both areas will arrive quickly. This is likely to be more pronounced in Northern Virginia simply because its real estate market isn’t as white-hot as New York’s is.
Look for the biggest interest in cities rather than suburbs and along masstransit routes. Amazon employees tend to be more attracted to urban areas and aren’t typical commuters.
Amazon estimates more than 20 percent of its Seattle employees ride public transit, and fewer than half drive alone to its campuses between Lake Union and downtown. That compares with 5 percent of workers nationwide, according to the American Public Transportation Association.