Amazon Ends “HQ” Search, Pledges to Spend $5B on New Sites in NY, VA

Xconomy Seattle — 

The wait is finally over.

Amazon said Tuesday it plans to significantly expand its presence in the New York City and Washington, DC, metropolitan areas beginning next year. The announcement was widely expected following news reports identifying the locales as likely winners of Amazon’s lengthy search process for an additional “headquarters,” as the company is calling the two new sites.

Seattle-based Amazon (NASDAQ: AMZN) said it expects to create 50,000 jobs over the next decade-plus at its two new satellite offices. One of them will be in Arlington, VA’s Crystal City neighborhood, the other in Long Island City in Queens, NY, the company said.

Amazon said it plans to invest $5 billion to build the two outposts, which it will split evenly between the New York and Virginia projects. The company is likewise not playing favorites with its job-creation projections; Amazon said that over time, it expects both new offices will employ 25,000 or more workers.

If it hits pre-determined investment and job creation targets, Amazon would be in line to receive more than $2 billion in tax credits and other incentives from economic development authorities in New York and Virginia (up to $1.53 billion and $573 million, respectively).

Launched in 1994, Amazon made its name as an online retailer and has since moved into areas like Web hosting, consumer gadgets, and producing and distributing films and television series.

The company has grown rapidly since its founding, especially over the past decade. Amazon says it has 610,000 employees worldwide, 250,000 of whom are based in the U.S., Canada, and Mexico. Outside of its home base in Seattle, the company has outposts in a handful of U.S. states, including Virginia and New York. The list of cities that are home to an Amazon satellite office also includes technology hubs like San Francisco, greater Boston, and Austin, TX.

Those three cities all made the list of 20 finalists for Amazon’s “second headquarters,” but did not emerge as winners. The company first announced in September 2017 that it planned to establish a major presence in a U.S. city outside of Seattle, and it narrowed the field to 20 in January.

Before this month, most forecasts envisioned Amazon would pick a single metro area following its search for a second “home” city. However, that changed after New York-based news outlets reported that Amazon planned to significantly expand its footprint there and in the Washington, DC, area.

While the Big Apple and the nation’s capital are claiming victory in the competition to woo Amazon, the company awarded something of a bronze medal to Nashville, TN. Amazon said it has chosen the Music City as a “center of excellence” for Amazon’s operations business, which includes areas like supply chain, fulfillment, and transportation. Amazon said it expects to invest $230 million in the Nashville project—which could be offset with up to $102 million in economic incentives—and create 5,000 jobs there.

In all three cities, Amazon expects the newly created jobs to pay an average annual salary of about $150,000, the company said.

Critics of Amazon have said the company’s pay scale is too stratified. The company employs scores of engineers earning six-figure salaries, while the workers in Amazon’s fulfillment centers across the U.S. are reportedly paid much less, on average.

In a document filed with the SEC in April, Amazon disclosed that excluding founder and CEO Jeff Bezos, the median yearly compensation earned by an Amazon employee was less than $29,000 in 2017. That figure surprised some observers, who had come to know Amazon as an ascendant company that creates high-paying jobs in the U.S. and abroad.

For its part, Amazon claims each of its two new offices along the eastern seaboard will “spur the creation of tens of thousands of additional jobs in the surrounding communities.”