Published: Wed, November 14, 2018
Markets | By Otis Pena

Amazon confirms new HQs in NYC and Virginia

Amazon confirms new HQs in NYC and Virginia

Alexandria Ocasio-Cortez, a newly elected member of Congress who represents Long Island City, the NY neighbourhood Amazon has chosen, said her office had received numerous calls from constituents expressing "outrage" about the tax benefits the firm is due to receive.

The announcement sent cities into a frenzy, with some making elaborate moves to attract Amazon's attention.

New York Democratic Assemblyman Ron Kim vowed to introduce legislation that would redirect the city's economic development subsidies to buying up and canceling student debt, Splinter News reported, effectively blocking Cuomo from offering taxpayer money to Amazon. Watch their remarks in the player above.

Long Island City has built more housing in recent years than any other NY neighborhood, a 2017 study found. Instead, it went with two of the nation's largest and most powerful metropolitan areas.

Amazon did not comment on the Good Jobs First numbers but said it has invested US$160 billion in the United States since 2010, including in warehouses, data centers and employee compensation.

Another $28 million in forecast property tax revenues will be dedicated to infrastructure investments around National Landing, the new branding for the collective developments of Potomac Yards, Pentagon City and Crystal City, all across the Potomac River but still within view of downtown Washington DC. The hope is that Amazon will attract other companies and ultimately boost the local economies. Those rivals routinely offer free food and perks in sunny California, seen by many as a better draw than Amazon's relative frugality in rain-plagued Seattle.

The Long Island City space will span four million square feet, with an option to expand to eight million square feet if necessary, and is expected to generate over $10 billion Dollars (roughly $13.24 billion CAD) in tax revenue over the next 20 years. Estimated figures show incremental tax revenue of $3.2 billion over 20 years from the project.

The company has more than 610,000 employees worldwide, making it the second largest USA -based, publicly-traded employer behind Walmart.

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The online retailer has whittled down over 230 proposals, and made a decision to split its second North American headquarters over two sites, the Wall Street Journal reported overnight, citing unnamed sources. Both Washington and NY have much larger pools of tech workers than Boston. The area is trying to revive itself after thousands of federal jobs moved elsewhere.

Amazon's decision suggests that the company put a premium on the labor pool, proximity to universities, space for growth and access to Washington decision makers, rather than tax breaks. Amazon has said it might consider some also-rans for other projects.

The new outposts won't appear overnight.

- 1 million square feet of energy-efficient office space.

Amazon already has more than 8,500 employees in Virginia and more than 2,000 in the D.C. metro region.

Those offers were predicated on a single headquarters with 50,000 jobs rather than the existing split deal with 25,000 in each location, but still would have blown the NY and Virginia offers out of the water - a signal that Amazon was not willing to compromise on access to technical talent. Amazon will also qualify for $897 million in tax credits from New York City over the next 12 years if it hits its target of creating 25,000 jobs. It plans to hold company-wide events at the new locations, including shareholder meetings.

Toronto continually stood out as a top contender for the bid, beating out the likes of other Canadian cities and was in the final running alongside Denver, Virginia, Atlanta, Nashville, and New York City. Among its 20 finalists, the company had selected two locations in the NY metro area and three in the D.C. area.

Jeff Bezos, Amazon's chief executive and the world's richest person, privately owns the Washington Post, which has written critical articles about Trump. Nashville, Tennessee, was named as an operations hub. The housing market will be one aspect to watch as Amazon employees and executives start exercising the option to move to NY or Virginia, Bishop recently told KIRO Radio. In each city, this agreement is only binding provided the average wage for jobs created is over $150,000.

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