Tech giant will receive about $2 billion in tax breaks from its new east coast hubs
Amazon announced on Tuesday that it will split its new second headquarters between New York City and Northern Virginia, capping a yearlong process that had cities falling over themselves to court the e-commerce giant.
The company will invest $5 billion between the two locations and is looking to hire 25,000 employees to fill the new offices in Arlington, Virginia, and the Long Island City neighborhood of Queens, Amazon announced. The company will start hiring in 2019. The East Coast had been pegged a favorite landing spot for “HQ2,” with the offices giving Amazon both a major presence in the media capital of the world and putting it close to the nation’s capital.
“We are excited to build new headquarters in New York City and Northern Virginia,” Jeff Bezos, Amazon founder and chief executive, said in a statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”
Amazon is receiving healthy tax breaks for the split HQ2. The company said it’s getting “performance-based direct incentives of $1.525 billion” for its Long Island City location, including a refundable tax credit via New York State’s Excelsior Program of up to $1.2 billion over the next decade. Amazon will also get $573 million in “performance-based direct incentives.” The company — which carries a $800 billion market cap — will receive more than $2 billion in tax breaks from the deals.
Average salaries at the new locations will be around $150,000, according to the company. The new offices will cover 4 million square feet, with the potential to double in size in the years ahead. The company estimates its new locations will generate $10 billion in incremental tax revenue in the next 20 years.
The NYC and the near-D.C. offices will employ more workers than anywhere else at Amazon beyond its Seattle home and its offices in the San Francisco Bay Area; the company already had a modest 1,800 people working in New York City and about 2,500 tech employees near Washington, D.C., according to the New York Times.
The new offices cap a process that started in September 2017. Amazon narrowed its finalists to a “top 20” in January, with Los Angeles, Austin and Denver, among other cities the company was considering. Several cities, often given just two days notice before meeting with Amazon, nixed ritzy courtships in favor of bringing in “university officials, younger people, and professionals” to explain why their neighborhoods would be a prime choice for HQ2, as the Wall Street Journal reported in April.