LONG-AWAITED DECISION
Retail giant goes with two cities in competition that came down to available talent, lifestyle
Amazon chooses New York City and Arlington to jointly share second headquarters and divvy up 50,000 high-paying jobs
WASHINGTON — Amazon has made a more prosaic choice than the hype originally promised, naming New York City and the Washington, D.C., suburb of Arlington, Va., as the areas that will divvy up the 50,000 highpaying jobs the online retail giant is expected to bring.
The announcement Tuesday comes after 24 months of intense jockeying by more than 230 cities vying to take home the glittering prize of becoming the home of Amazon’s second headquarters.
Instead, Amazon chose two areas that have long been considered front-runners, even among the 20 finalists announced on
Jan. 18.
While Amazon’s request for proposals listed multiple requirements, including tax incentives and a business-friendly environment, in the end the whole reason for the exercise was to aid the Seattle-based company in hiring the best and the brightest talent to keep up its ferocious pace of innovation, even as other tech companies are pushing equally hard to hire those same workers.
New York City and the greater D.C. area both fit that bill admirably, said Jeffrey Shulman, a professor at the University 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.
And naming two rather than just one new headquarters gives the company an edge, he explained.
“People who want to work at Amazon will now have three cities to choose from rather than one or two,” he said.
The Washington, D.C., metro area emerged as an odds-on favourite to land Amazon’s second U.S. headquarters when it 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, Virginia and Fairfax County, Virginia); and Washington, D.C., itself.
That resulted in nine proposed building sites within a 45-kilometre radius of the U.S. Capitol.
As the seat of the nation’s government, Washington stands out among the potential sites.
The area’s public transportation system and its white-collar, well-educated workforce are strengths. And its location in the Eastern Time Zone makes it good for staying in touch with subsidiaries across the Atlantic.
Founder Jeff Bezos, who also owns The Washington Post, recently 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, Va.
Still, Northern Virginia stood out as the prime choice in the region for its tech-centric surroundings.
A crossroads of the internet, the region has countless data centres where tech giants such as Facebook, Google and Salesforce connect. Amazon Web Services itself has 29 individual data centres in Northern Virginia.
And Loudoun County, where most of the data centres are located, claims that 70 per cent of all global internet traffic flows through it.
Probably highest on Amazon’s list of must-haves is access to tech and other talent. The New York Metro area has close to 1.3 million workers in the relevant fields of management, business, finance, math, public relations and sales.
New York is also a magnet for young professionals, who prize urban areas, rich culture and vibrant arts scenes. In addition, it has a massive, if somewhat beleaguered transit system.
And it’s a large enough city that adding another 25,000 highly paid workers won’t seriously distort the job market in the ways they might have in smaller cities like Raleigh, North Carolina, or Columbus, Ohio, or even Toronto, which was also on the short list.
While housing in New York City overall is tight, the area Amazon is reportedly homing in on, Long Island City at the western edge of the borough of Queens has been on an apartment building spree. A total of 41 new apartment buildings have been built in the area over the past eight years, with 12,533 apartments by 2017, according to RentCafe.
Amazon’s search began on Sept. 7, 2017, when it announced it was looking for a second headquarters, one that would be coequal to its Seattle home. It posted a request for proposals outlining what information and attributes it was looking for.
Such an open process for an economic development proposal is rare, as these searches are usually done in secrecy and only announced once 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 what’s now 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 Oct. 19, 2017, deadline.
On Jan. 18 a short list of 20 finalists was announced. The cities and areas were Atlanta; Austin, Texas; Boston; Chicago; Columbus; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland; Nashville, Tennessee; Newark, N.J.; New York City; Northern Virginia (Loudoun County, Virginia and Fairfax County); Philadelphia; Pittsburgh; Raleigh, North Carolina; Toronto; and Washington, D.C.
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.
While all 20 cities were eager for the jobs and investment the headquarters will bring, detractors, who dubbed the process a “race to the bottom,” 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 already steep housing prices.
Almost none of the finalist cities told the public — or even their local city councils — the dollar amounts. This is legal because most of the deals were put together by local development agencies.
The search also 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, including Austin; Dallas; Nashville, Tennessee; Atlanta; Columbus; Indianapolis; Miami; Raleigh, North Carolina; and Northern Virginia.
Locally, multiple smaller groups came together to urge 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.
The winners can expect a few things to happen right way. First, big parties held by city officials. And then a land rush.
It will be twofold. Amazon staff won’t start showing up for months if not years, but speculators, developers and those determined to ride what everyone expects to be 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 already is.
Look for the biggest interest in cities rather than suburbs and along mass-transit routes, as Amazon employees tend to be more attracted to urban areas and aren’t typical commuters.
Amazon estimates more than 20 per cent of its Seattle employees ride public transit, and fewer than half drive alone to its campuses between Lake Union and downtown.
That compares to five per cent of workers nationwide, according to the American Public Transportation Association.