Amazon Makes It Official: Two HQ2 Locations to Split Jobs and Investment – Next City

Amazon Makes It Official: Two HQ2 Locations to Split Jobs and Investment

(AP Photo/Reed Saxon, File)

It’s finally official: Amazon has chosen two sites for HQ2, and they are, as widely speculated, New York City and Northern Virginia.

In yet another curveball in the drawn-out selection process, however, Amazon announced this morning that it’s also opening an “Operations Center of Excellence” in downtown Nashville, bringing 5,000 jobs to the southern city that was shortlisted as a finalist for HQ2.

In Long Island City, Amazon says it will bring 25,000 jobs to 4-8 million square feet of office space in exchange for $1.525 billion in subsidies.

In Northern Virginia, Amazon has selected a site near National Airport that it is dubbing “National Landing.” (A term that this ten-year DC-area resident can confidently claim is Not A Thing — and Google agrees with me.) The region, near Crystal City, has struggled with office vacancies after the federal government moved a number of offices in the naughts.

Amazon says it will get up to $573 million in incentives for creating 25,000 high-paying jobs, and the Commonwealth of Virginia will spend $195 million upgrading two metro stations (one of which does not yet exist) and other infrastructure improvements.

The Nashville office will bring 5,000 jobs to the city, Amazon said, in exchange for $102 million in tax incentives.

Pundits and analysts quickly took to dissecting the news.

One quick takeaway, according to CNN Business reporter Lydia DePillis: New York may not be as good of a negotiator as Virginia. The state of New York is paying more than double per job compared to Virginia ($48,000 per job vs $22,000) and also giving the company $325 million just for the buildings it’s occupying. On the other hand, DePillis pointed out, Amazon is also promising some community benefits: donating space for a tech incubator and a public school. Neither of those benefits will come to Virginia.

Amazon is expected to generate massive pressure on housing, though investors didn’t need to wait for the official announcement to begin speculating. The Washington Post reports that Amazon’s interest in Crystal City raised the price of a Crystal City condo by $20,000 overnight.

On the other hand, at least one D.C.-area economist isn’t sure that the real estate speculation is warranted. In an interview with Washingtonian magazine last week, George Mason professor Stephen Fuller acknowledged that the Amazon move is “massive,” but that the region is already in a growth spurt, adding 50,000 jobs to the region every year for the past three years. “If Amazon came here in their full glory, it would be 50,000 jobs added over some period, which could be as much as 20 years. So it’s not quite as imposing as a lot of people may think,” he said. According to WAMU reporter Martin Austermuhle, in fact, Amazon only plans to hire 400 people in Crystal City in 2019, slowly ramping up past that.

The company said the jobs it is bringing to the area will all pay $150,000 or more. That’s far above the metro area’s median household income of $95,843 (as of 2016), already the third highest median income of any metro area in the country.

Alex Howe of the Northern Virginia branch of the Metro D.C Democratic Socialists told Austermuhle his group was concerned with how HQ2 will worsen housing costs in the area.

“Arlington and our region already have an affordable housing crisis due to gentrification and rising rents, which so-called HQ2 will surely exacerbate,” he said.

Rachel Kaufman is a journalist covering transportation, sustainability, science and tech. Her writing has appeared in Inc., National Geographic News, Scientific American and more.

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