Thursday , July 29 2021

Decision of Amazon HQ2: Amazon divides the prize between Crystal City and New York

Amazon will open major breakthroughs in Crystal City in northern Virginia and in the city of New York, dividing its much sought-after investment of up to 50,000 jobs between the two East Coast sites, the company announced on Tuesday.

"We are excited to build a new headquarters in New York and Northern Virginia," said founder and CEO of Amazon, Jeffrey P. Bezos, in a statement. "These two places will allow us to attract world-class talents that will help us continue inventing for the customers in the coming years. The team did a great job in selecting these sites and we hope that it will become an even larger part of these communities."

The company also announced that it has selected Nashville for 5,000 jobs as part of a new Center of Excellence for its operations business, which is responsible for the company's accomplishment, transportation, supply chain and similar activities.

The election of Crystal City in Arlington County as one of the winners cemented the reputation of Northern Virginia as a magnet for business and potentially remodeled the Washington region in an outpost of Silicon Valley during the next decade.

The elections arrived at a price, whose details are only made public. Governor of Virginia, Ralph Northam (D) and the leaders of Arlington County, agreed to grant direct Amazon subsidies for a total of 573 million dollars based on the company creating 25,000 jobs with an average salary of $ 150,000. The state and the county will also invest a total of 223 million dollars for transportation improvements that will benefit Amazon and the rest of the community.

Long Island City, New York, where Amazon will place one of its new headquarters locations, as seen on the Queensboro Bridge on November 13, 2018. (Photo by Yana Paskova / For The Washington Post)

The money, which is subject to approval by the Virginia General Assembly, also includes $ 195 million in transportation improvements at nearby metro stations, the Reagan National Airport and to build a pedestrian bridge connecting to the new center of the company, which It will be in a brand new neighborhood called "The national landing, which covers parts of the Pentagon and Crystal City in Arlington and Potomac Yard in Alexandria.

Virginia Tech plans to build a one billion dollar university campus in Alexandria focused on innovation, part of the higher education package that the state offers to the company.

Northam said that Virginia's technological talent and stable business environment were key to landing the prize. Making the formal announcement of the agreement in a warehouse in Crystal City on a site that will eventually house an Amazon property, told a multitude of state and local officials and business leaders: "We are dedicated to being on the verge of the next technological and innovative breakthrough."

Covered on the lantern where Northam spoke, it was a sign that said: "Virginia is for lovers of the Amazon."

New York leaders offered more money to Amazon: $ 1,855 million, much of which is also linked to job growth and company salaries.

The decision takes Northam and local leaders the highest economic development prize in a generation, one of billions of promising dollars only in capital investments, but can also put pressure on housing prices already steeped in the region, congested roads and the stupid division between wealthy and low income residents.

Northam said in a statement that he expected Amazon to invest 2,500 million dollars in the republic and to create $ 3.2 million in tax revenues.

According to a 25-page agreement between the company and the state, Amazon expects to hire 400 people in 2019 and 1,180 next year. He hopes to create a minimum of 25,000 jobs by 2030 and potentially a total of 37,850 up to 2034.

"This is a great triumph for Virginia. I am proud that Amazon recognizes the active treasures that the Commonwealth has to offer and plans to deepen here in its roots," he said.

It also represents a victory for the mayor of New York, Bill de Blasio (D) and governor Andrew M. Cuomo (D), who was joking that he would change his name to "Amazon Cuomo", if it were necessary to land the project.

Other final suitors included the District, Montgomery County and other jurisdictions Amazon considered since it reduced its list in January. Mayor Muriel E. Bowser (D) and Governor of Maryland Larry Hogan (R) applauded the announcement.

Nor will they have to encourage the company, but experts say that both must see economic benefits as a result. Bowser called on regional leaders to create concrete goals for affordable housing: an acute problem that economists say will probably worsen when Amazon grows.

"Amazon in Arlington is a win for D.C.," said Bowser in a statement. "We will continue to prepare residents with the skills and knowledge they need for future jobs, including Amazon."

Hogan said he expects to see other companies moving to the region to be close to Amazon. "Collectively, we not only win 25,000 jobs at the corporate level, but also many businesses that are part of the Amazon supply chain," said Hogan.

The co-founder of AOL, Steve Case, who now works with technology entrepreneurs in smaller cities, has issued a statement encouraging them not to lose faith despite the selection of two unconditional East Coast.

"The best economic strategy is not attracting existing companies to open offices or factories, but the new companies that could be the Amazon in the morning were born," he said. But in the same breath, the resident of Virginia of the North took a return of victory for a long time: "The announcement of Amazon is a victory not only for GO, but also for all the greater D.C. region".

Opposition to the movement began shortly after the announcement, as groups dedicated to combating inequality and opposed to business subsidies began to bring together their supporters in New York and Virginia as business details began to emerge.

"We received calls and broadcasts from residents of Queens all day. The community response? Outrage," said Representative Alexandria Ocasio-Cortez (D-N.Y.), Who will take office in January.

Many were worried about the cost of living and questioned why a company headed by Bezos – the richest person in the world – needed public funds.

It's "unfathomable that we would sign a $ 3,000 million check to Amazon," New York Senator Michael Gianaris, and city council member Jimmy Van Bramer argued, particularly due to underground collapsing cities, crowded schools and Inadequate health care.

"We are witnesses of a cynical game in which Amazon deceived New York in offering unprecedented amounts of tax dollars to one of the richest companies on Earth by a job pledge that would represent less than 3 percent of the jobs typically created in our city a period of 10 years, "they wrote in a statement.

But Cuomo said the benefits on subsidies.

"The ratio of income and incentives is from 9 to 1. That is the highest rate of return for a program of economic incentives that the state has always offered," said Cuomo. He contrasted him with the return of state credit on film tax, where he said that the state receives $ 1.15 for every dollar you invest.

Similar concerns have been expressed in Virginia.

"Thousands of new high-paying jobs could be a benefit to our community, but we deserve to know the cost," said Anna Scholl, executive director of the Progress Virginia advocacy group. "Tens of thousands of new workers and their families are sure to stretch the community's resources when it comes to affordable housing, mass transit, and high quality local traffic and schools. It's only right that Amazon pay its equitable quota."

Jay Carney, senior vice president of corporate affairs around the world of Amazon, said the company carefully considered all locations and reviewed 100 different metrics, but finally made the decision, including the option of dividing the project, depending on the best way in That the company can hire the talent you need.

"We understand that, of course, these are two fantastic metropolitan areas, and each of the areas has an existing group of talent and are fantastic places to live," he said in a telephone interview.

Carney said Amazon would apply some of the lessons he had learned from his growth in Seattle to his new locations. He said that Bezos was "deeply involved" in the process and was in all the leading meetings where he was discussed.

Amazon's decision to split the project instead of opening a second headquarters on one side of its Seattle campus infuriated some who said that the company had the competition between cities just to change the rules in between. Some said it was unfair that the company seemed to consider only sites in richer communities.

"A different thing here is that we are planning ahead of these cities. Amazon started in a garage. No one predicted, not even Jeff, when they launched that Amazon would turn into what was done or that we will have tens of thousands of employees just in Seattle" said Carney.

Amazon launched the project in the fall of 2017, doubling the HQ2 and issuing search criteria for "a second corporate headquarters" with up to 50,000 jobs and an investment of 5 billion dollars.

When choosing the city of Crystal City, Amazon opted for a site near the suburb, through the Potomac River from Washington and half a mile from the National Airport. Old-fashioned buildings and under-utilized properties now fill the site, where some office buildings have good vacations.

The selection represents a triumph for the growth strategy of Arlington and Alexandria to promote development through mass transit routes. The site is near the Crystal City subway station in the Blue and Yellow lines, and the planned Potomac Yard station is scheduled to open in 2021.

But neighbors in the neighboring district of Del Ray in Alexandria expressed concern at the beginning of the year that the arrival of Amazon would worsen daily backups that have already flashed traffic and have eroded the quality of life in the single-family home neighborhood.

The decision marks a dramatic growth in the fortune of Crystal City, which lost thousands of jobs when military agencies and defense contractors set off in the Pentagon Compliance and Realization (BRAC) process, which began in 2005.

One advantage is that all properties are supervised by a single, well capitalized company, JBG Smith. The company of 4.4 billion dollars is the largest real estate owner and creator of the region, and has the majority of the goods offered, enough to accommodate the solo project in Crystal City and Potomac Yard.

The election of Amazon also ruins the position of North Virginia as an attractive site for the corporate headquarters. In the last 15 years he has attracted the Volkswagen Group of America to Herndon, Northrop Grumman to Falls Church, Hilton Worldwide to Tysons and the United States from Nestlé to Arlington.

Northam said in March that the field of the State focused on the development, inclusion and transport of the workers, along with the quality of life.

Although 238 sites initially submitted proposals to Amazon, many experts considered the community of Washington as a favorite from the beginning due to Bezos' personal connections in the region, in particular the 23 million dollar mansion that he acquired in the Kalorama district of the Last year and owned by The Post.

Others suggested that Amazon executives wished to be close to Washington to host the federal government, due to an increase in concerns that regulators could pursue anti-trust actions against the company or because the government has become a critical Amazon client.

Virginia also offers the political advantage of being a red state, making it easier for the company to seek support from both parties.

Amazon announced earlier that it would host its cloud computing unit, Amazon Web Services, in Herndon, near some of its data centers.

The Washington area also naturally adapts to many of the criteria Amazon has requested in its search, including a profound group of talented workers, a robust public transit system and easy access to the airport.

Amazon launched its survey in September 2017, promising to make a decision by the end of 2018 and occupy an initial building of 500,000 square meters in 2019.

The company says Seattle's headquarters injected $ 38 billion more than the company spent on its buildings in the area's economy, generating an additional $ 1.40 per dollar spent on the company.

The Seattle officers did not discuss the figures, but they were also running to keep up the company's growing growth and the requirements it has in public transit, schools, road networks, parks and public services. The company now has more than 45,000 employees, which occupy more than 40 buildings and 10 million square meters of office space.

Compared to other large corporations, Amazon employees are less likely to travel by car, about 55 percent, either walking, riding a motorcycle or taking public transit, according to a survey by the company's workforce in Seattle . The company buys transit cards for employees and is building a dedicated cycling track to separate car bicycles near its Seattle buildings.

The growth of Amazon is also likely to put new tensions in housing. Since the arrival of Amazon, Seattle has become one of the most expensive places in the United States to live, forcing low-income residents to move to remote areas. The city and around King County declared a state of emergency in 2015 for helplessness.

Even without Amazon, the Washington Metropolitan Council of Governments estimates that the region needs to add 235,000 housing units by the year 2025 to keep pace with the expected growth in employment. The arrival of Amazon could push the target above 267,000, according to a recent analysis by the Urban Institute. Right now, it's about to add about 170,000 new units by 2026.

Since the search of the headquarters began, Bezos and the company have made several ads that could soften the image of Amazon while moving to open its second hub.

Bezos announced in September that it would give US $ 2 billion of its own money to support groups that fight against homeless people in the United States and to create a network of preschools in dear communities. In October, after months of criticism by Senator Bernie Sanders (I-Vt.) For the treatment of workers, Amazon announced that it would raise the minimum wage for all employees at $ 15 an hour.

The decision of the minimum wage is not likely to have much effect on contracting the company in northern Virginia, where Amazon says its installation will mainly employ white-collar workers with an average salary of more than $ 100,000 per year.

Before Amazon announced its search, jurisdictions in the Washington area – scattered in part by cuts in the federal budget – were already diversifying their labor force far from depending on federal spending. The region has earned more than 55,000 jobs annually from 2015 to 2017, despite budget cuts and stagnation in Congress. But its labor growth was slower than the average among large metropolitan areas.

Patricia Sullivan, Gregory S. Schneider, Michael Laris and Fenit Nirappil contributed to this report.

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