Amazon plans to divide HQ2 evenly between two cities
Amazon plans to divide HQ2 evenly between two cities
plans to split its second seat equally between two locations instead of choosing a city, according to a person familiar with the subject, a surprise decision that will extend the impact of a new and massive office in a couple of communities.
The driving force behind the decision to build two equal offices for "HQ2", in addition to the company's headquarters in Seattle, is to allow it to recruit more of the best technological talent, according to the person familiar with the company's plans. . The measure will also alleviate potential problems with housing, transit and other areas where adding tens of thousands of workers could cause problems.
According to the new plan, Amazon would divide the workforce with approximately 25,000 employees in each location, the person said.
Crystal City, Virginia, located just across the Potomac River from Washington, has good access to technology talent and transportation, two factors that are on Amazon's wish list.
Photo:
Jason Andrew for The Wall Street Journal
Amazon is in advanced conversations with several cities, but has not made a final decision on which places to choose, according to people familiar with the subject. The Wall Street Journal They reported on Sunday that Amazon was in last-minute talks with a handful of communities, including Crystal City in northern Virginia, Dallas and New York City.
An announcement could come as soon as this week, said people familiar with the matter.
In the fierce attempt to attract Amazon, the cities and finalist states have offered tax incentive packages: Newark and New Jersey, for example, proposed $ 7 billion in incentives, not to mention the hundreds of thousands of dollars spent on expensive consultants. of site selection, advertising campaigns and extravagant advertising tricks. The decision to split the locations would give Amazon access to more than one incentive package.
But the plan to halve one of the biggest economic developments proposed in years could also be seen as a disappointment for the 20 stores that Amazon chose as finalists. at the beginning of this year. When Amazon initially plans announced for HQ2 More than a year ago, he promised to bring up to 50,000 employees and more than $ 5 billion in investments to the new location for almost 20 years.
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Amazon expects to see the three main US offices UU As central offices with similar executive and administrative functions, said the person familiar with the effort. But the division means that the company is essentially creating two smaller offices than its headquarters in Seattle, which has 45,000 workers.
Jeff Finkle, president of the International Economic Development Council, a group that represents economic development officials from around the country, said it will now be harder for a community to claim that it has won a seat on Amazon.
"Many of these communities hoped to brand themselves as Seattle's co-headquarters," he said. "I think it becomes just a regional office or an administrative office or a main office, but not a joint headquarters."
However, Finkle believes that both winning areas will have achieved an economic victory with possibly 25,000 new jobs, investments associated with an important technology campus and possible interest from other companies.
The latest change highlights how unpredictable this site selection process has been for the 238 cities and regions that submitted proposals More than a year ago Amazon had challenged the convention by turning the search into an unusually public beauty pageant.
During the process, Amazon's ideas changed when executives concluded that dividing their offices would allow them to access more technological talent than in a single location, the person said.
The hardening of the labor market in the United States and a period of low unemployment have made competition for workers even more fierce since Amazon began its search. Not only are cash-rich technology giants like Amazon competing to hire the brightest software engineers, computer programmers and artificial intelligence experts, but also automotive, banking and retail companies. Amazon has been aggressively hiring at many of its companies, including its for-profit cloud computing division and its artificial intelligence assistant, Alexa.
By building two headquarters, Amazon can access different geographic regions to gain talent, including some that may not want to move too far from home. It may also not be competing with other major technology giants in a given area, as it does with
Microsoft
Corp.
in the Seattle area. The company will continue to hire experts in machine learning, artificial intelligence and supply chain, all areas that Amazon currently hires in Seattle.
In addition, the decision would allow you to reduce possible headaches for the chosen areas. Amazon has wanted to avoid being the only big company in the city, something that has been treated in Seattle, according to people familiar with the company's thinking. The incorporation of 50,000 workers, even for more than a decade, would probably cause some setbacks for transit systems and could lead to problems such as the lack of affordable housing.
Crystal City, a neighborhood in Arlington County, northern Virginia, seems to be the favorite to take one of the final two positions, according to people familiar with the subject. In Northern Virginia, Amazon is already negotiating with government officials about incentives, while also talking to
a real estate investment trust, on the real estate of Crystal City that he owns. One of the people said that part of the negotiations there involve the establishment of investment objectives that Amazon would have to meet to qualify for the incentives.
Crystal City, across the Potomac River from Washington, DC, has an urban environment, numerous government offices and a campus ready to go with empty and older offices. The area has good access to technological talent and transportation, two factors that are on Amazon's wish list.
The betting websites have had Northern Virginia as the favorite for most of this year. Amazon CEO Jeff Bezos has a home in the DC area and owns the Washington Post. The region was also the only metropolitan area where Amazon named three finalists; D.C. property and Montgomery County, Md., Were the other two.
Another lead candidate, Dallas, has a lower cost of living and public-private partnership incentives, in the form of tax cuts, grants, cost-sharing infrastructure and other methods to offset operating and project costs. It is also in Texas, which does not charge personal income taxes, which could be attractive for workers to relocate.
In New York, a neighborhood that Amazon has explored is Long Island City, in Queens, the newspaper reported previously. It borders the East River that dominates Manhattan and is developing high-rise buildings full of young professionals.
Amazon executives met with New York officials three times between April and September and then again two weeks ago, when Mayor Bill de Blasio made his final presentation, according to a person familiar with the negotiations.
The announcement in New York last week that it would invest $ 180 million to improve Long Island City's infrastructure was scheduled to coincide with the city's final push for Amazon, the person said.
After a campaign rally on Monday, New York Gov. Andrew Cuomo told reporters he was doing everything he could to attract Amazon to the state.
"We have put together a very strong incentive package and we have had excellent meetings," said Mr. Cuomo. "It has been very positive, and whatever else I can think of will take us to the top, whatever they want to be called Amazon, I will change my name to Amazon Cuomo if that is what is needed, because it would be a great economic boost" .
-Jimmy Vielkind contributed to this article.
Write to Laura Stevens in laura.stevens@wsj.com and Shayndi Raice in shayndi.raice@wsj.com
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