Amazon, which is growing too big for its Seattle hometown, is spreading out to the East Coast.
The online shopping giant ended its 14-month-long competition for a second headquarters Tuesday by selecting New York and Arlington, Virginia, as the joint winners. The two cities will each get 25,000 jobs that pay an average of $150,000.
But they’ll pay for it: New York is forking over more than $1.5 billion in tax credits and other incentives, while Arlington is offering about a third of that — $573 million. The communities hope that Amazon will attract other companies and ultimately boost their economies.
North Carolina officials were disappointed. The Research Triangle area was one of 20 finalists for the project.
“North Carolina’s strong workforce, outstanding universities and community colleges, and highly livable communities are what made our state a finalist for Amazon, and those strengths will continue to attract other companies,” said Ford Porter, press secretary for Gov. Roy Cooper. “It’s clear that North Carolina is open for business and Governor Cooper will continue to work with legislative leaders and the business community to bring good new jobs to our state.”
Added Republican Phil Berger, the leader in the Senate: “I am disappointed that Amazon decided to choose New York City and the Washington DC area for their HQ2 facilities instead of investing in North Carolina, but I am still confident that our robust business climate combined with the changes we made earlier this year to the JDIG program will continue to make our state a thriving place for business investment.
“Republican leaders kept our promise to improve North Carolina’s business climate. We cut taxes taxes, eliminated onerous regulations and modernized our infrastructure. Thanks to these reforms, North Carolina’s business tax climate has jumped from 44th all the way to 12th, and when paired with our top-notch workforce, public universities and community colleges, new jobs and investment continue to flow to our state.”
The incentives dwarfed what North Carolina has offered in the past. The largest package was $113 million awarded to MetLife in 2013 for a new campus in Cary.
Amazon, which started as an online bookstore two decades ago, has grown to a behemoth that had nearly $180 billion in revenue last year. It now owns well-known brands including grocer Whole Foods and online shoe-seller Zappos. It also makes movies and TV shows, runs an advertising business and offers cloud computing services to corporations and government agencies.
The company has more than 610,000 employees worldwide, making it the second largest U.S.-based, publicly-traded employer behind Walmart.
But it was the prospect of 50,000 jobs that led 238 communities across North America to pitch Amazon on why they should be home to the next headquarters.
Amazon could have picked a struggling city desperate for new jobs. But instead it went with two of the nation’s largest and most powerful metro areas. The reason Amazon gave: they are best suited to attract the high-skilled workers the company wants.
New York is the nation’s financial and media powerhouse and has been working to attract technology companies. Google already has more than 7,000 workers in the city and, according to media reports, is looking to add 12,000 more in coming years.
Arlington is directly across the Potomac River from Washington. Many large government contractors have offices and lobbying operations there. However, many of its 1980s-era office buildings have vacancies after thousands of federal employees moved elsewhere. Being near the nation’s capital could help Amazon with lobbying efforts as the company faces rising scrutiny from politicians.
Amazon said it will spend $5 billion between both locations on construction and other projects.
The new outposts won’t appear overnight. Amazon said hiring at the two headquarters will start next year, but it could take a decade or more to build out its offices.
Its New York location will be in the Long Island City neighborhood of Queens, while its Virginia offices will be in a part of Arlington that local politicians and Amazon are calling National Landing, a made-up area around Reagan National Airport that encompasses Crystal City and Potomac Yard.
Both are waterfront communities away from overcrowded business districts, giving Amazon space to grow.
Virginia state Sen. Adam Ebbin, a Democrat who represents the area where Amazon’s new headquarters will be located, said that affordable housing may be an issue, but the announcement is a welcome development that will help increase the area’s tax base to help ease overcrowding in schools and address other pressing needs.
Not everyone was pleased.
“Offering massive corporate welfare from scarce public resources to one of the wealthiest corporations in the world at a time of great need in our state is just wrong,” said New York State Sen. Michael Gianaris and New York City Councilman Jimmy Van Bramer, Democrats who represent the Long Island City area, in a joint statement.
Amazon said it will refer to the new locations as headquarters, even though with 25,000 jobs each, they would have fewer workers than its Seattle hometown , which houses more than 45,000 employees.
Seattle will remain as one of Amazon’s three headquarters, and the company said that senior executives will also be based in the two new locations. It plans to hold company-wide events at the new locations, including meetings of its shareholders.
There were early signs that Amazon had its sights set on New York and northern Virginia. Among its 20 finalists, the company had selected two locations in the New York metro area and three in the D.C. area. Plus, CEO and founder Jeff Bezos has a home in Washington D.C., and he personally owns The Washington Post.
While it didn’t win the main prize, Nashville, Tennessee, won’t go empty handed. Amazon said the city, which was one of finalists, will be home to a new Amazon office that will create 5,000 jobs, focusing on customer delivery.