Amazon made official Tuesday its selection of New York City and Arlington, Va., as the locations for its new North American headquarters.
The company said it plans to invest $5 billion and create more than 50,000 jobs across the two sites, splitting the workforce at more than 25,000 employees each in New York City and Arlington. Seattle remains as the company’s third North American base.
Additionally, Amazon said it has chosen Nashville, Tenn., for a new Center of Excellence for its operations business, which is responsible for customer fulfillment, transportation, supply chain and other activities. The addition of the Nashville site will lead to the creation of another 5,000 jobs, Amazon said.
Newark was one of the finalists for the so-called HQ2. In its bid to woo Amazon to the Garden State, the state of New Jersey put together a tax-incentives package valued at $5 billion, while Newark anted up another $2 billion.
“Regardless of today’s announcement, Newark is undoubtedly stronger and has benefitted tremendously from the spotlight it has been under for more than a year,” said New Jersey Gov. Phil Murphy in a prepared statement. “New business inquiries are up significantly. Because of our collaborative, all-in effort, now everyone knows that not only is Newark a city on the rise, but that New Jersey’s cities have the tools to be homes for leaders in the global innovation-driven economy.”
Added Newark Mayor Ras Baraka, also in a prepared statement: “The attention that Amazon brought to Newark by keeping us under consideration down to the wire greatly helped us showcase our city’s unprecedented progress and attractiveness to technology and other businesses.
“ … News that Newark was a finalist highlighted our key advantages: proximity to New York City at a more affordable cost; access to mass transportation; a talent pool fed by half a dozen colleges and an internet infrastructure that allows Newark to offer the fastest and broadest free outdoor Wi-Fi in the country; development opportunities including land with riverfront and park views; and our diversity, a large African-American and Hispanic population.”
“Regardless of today’s announcement, Newark is undoubtedly stronger and has benefitted tremendously from the spotlight it has been under for more than a year.”
Gov. Phil Murphy
In a statement Tuesday, New Jersey Chamber of Commerce President Tom Bracken expressed the organization’s appreciation to city and state officials for their efforts to land Amazon, but then renewed his call for the incentives offered to be used to bolster job creation at companies already based in the state.
“The New Jersey Chamber of Commerce now strongly urges our state government leaders to take the tax incentives offered to Amazon and make them available to the legion of small and medium sized companies already situated in New Jersey and loyally doing business here,” Bracken said.
“We believe if these economic incentives are directed to New Jersey companies, the positive impact would equal, if not exceed, the impact we would have seen had Amazon established its headquarters here,” he continued. “We need to remember that small- and medium-sized companies are the backbone of New Jersey’s economy and they create many of the new jobs here.”
Meanwhile, Republican Assemblyman John DiMaio of Warren blamed what he called the “high-tax policies” of the state’s Democratic leaders for Amazon’s decision to bypass New Jersey.
“The Democrats’ high-tax and overregulation policies made the decision easy for Amazon,” said DiMaio, R-23rd District, in a statement. “Billions of dollars in tax credits don’t cover for our state’s anti-business tax climate; it only makes it more obvious. The unfortunate truth is that New Jersey has been rated the worst state to own a business for years and it keeps getting worse.”
The New York City headquarters will be located in the Long Island City neighborhood of Queens, while the Washington, D.C., metro headquarters in Arlington will be located in National Landing. Hiring at both sites will begin in 2019, Amazon said, as will recruiting at the new center in Nashville.
“We are excited to build new headquarters in New York City and Northern Virginia,” said Amazon Founder and CEO Jeff Bezos in a prepared statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”
As part of Amazon’s New York headquarters, Amazon said it intends to create more than 25,000 full-time high-paying jobs; invest approximately $2.5 billion; occupy about 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet; and provide an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of investment and job creation.
Amazon will receive performance-based direct incentives of $1.525 billion based on creating the 25,000 jobs in Long Island City. According to the company, this includes a refundable tax credit of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years.
The company will get the incentives over the next decade based on the incremental jobs it creates each year and reaching building-occupancy targets. Amazon also indicated it will separately apply for as-of-right incentives including New York City’s Industrial & Commercial Abatement and Relocation and Employment Assistance programs.
Amazon said it has agreed to donate space on its New York campus for a tech startup incubator and for use by artists and industrial businesses. The company will also donate a site for a new primary or intermediary public school and invest in infrastructure improvements and new green spaces, it said.
“When I took office, I said we would build a new New York State — one that is fiscally responsible and fosters a business climate that is attractive to growing companies and the industries of tomorrow,” New York Gov. Andrew Cuomo said in a prepared statement. “We’ve delivered on those promises and more, and today, with Amazon committing to expand its headquarters in Long Island City, New York can proudly say that we have attracted one of the largest, most competitive economic development investments in U.S. history.
“With an average salary of $150,000 per year for the tens of thousands of new jobs Amazon is creating in Queens, economic opportunity and investment will flourish for the entire region. Amazon understands that New York has everything the company needs to continue its growth.”
Meanwhile, in Virginia, Amazon will receive performance-based direct incentives of $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the commonwealth of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local tax on hotel rooms.