Amazon’s two new headquarters: What you need to know
Amazon’s two new headquarters: What you need to know
SAN FRANCISCO – Amazon will place its new headquarters in not one, but two cities – New York City and the Washington, D.C., suburb of Arlington, Virginia. Together they will divide up the 50,000 high-paying jobs the online retail giant is expected to bring. Here’s what you need to know.
Question: What is Amazon doing?
Answer: On Sept. 7, 2017, Amazon announced it was searching for a second headquarters, one that would be co-equal to its Seattle home.
Q: Why did it want a second headquarters?
A: At the time, Amazon was estimated to have about 40,000 employees in Seattle and occupied 19 percent of all prime office space in the city, according to an analysis by The Seattle Times. The company’s need for space, and more importantly tech talent, had outgrown the area. Not everyone wants to live in Seattle. To lure those who don’t, Amazon decided to find a second home.
Q: Is this common?
A: No. Most companies just have one headquarters, or if they’re international they might have one international headquarters and one in the United States. Amazon said it would have two. That’s very uncommon.
Q: So how weird is it that there are two new headquarters?
A: Very odd. Most companies have one headquarters. Three is extremely uncommon. But it makes sense for Amazon. It takes care of the problem of overwhelming any one town with 50,000 highly paid employees. That’s been an issue in Seattle, where the sheer mass of Amazon employees has added to problems of income inequality, gentrification, housing shortages and traffic, leading to a backlash against the company. Splitting its new headquarters in two means it’s less of an issue. It also gives Amazon not one but two world-class areas to use to lure the best and the brightest tech workers, who can literally go anywhere they want.
Q: Anything else particularly unusual about it?
A: Yes – this is all happening very publicly. Companies look for new space all the time and big companies are known to move their headquarters. But it’s almost always done behind closed doors. The company puts out feelers, local economic development agencies respond, everything is cloaked with code names and no one outside of the process even knows it’s happening until a decision is announced. By launching its search publicly, Amazon pitted city against city, pushing each to offer up the best tax incentive deals possible. That gave Amazon a ton of free publicity and a treasure trove of data about more than 200 cities it can now use as it looks to place other offices.
Q: Why would a city want to be home to Amazon’s second headquarters?
A: Amazon says it plans to invest more than $5 billion in the area and hire as many as 50,000 new, full-time employees whose average pay will be more than $100,000 a year. The placement will in turn create as many as 250,000 indirect jobs, according to the calculations of Enrico Moretti, an economics professor at the University of California-Berkeley. The economic benefits for the chosen city will be enormous.
Q: What will happen in the city?
A: Expect a horde of real estate speculators to descend, driving up housing prices as they attempt to buy and rent at pre-Amazon prices. Companies that do business with Amazon or hope to do business with Amazon might set up offices there. And opposition to the whole idea of Amazon will crystallize and those opposed will begin to organize.
Q: What did Amazon say it was looking for?
A: In its Request for Proposal, Amazon listed its main requirements as these:
• A metropolitan area with more than 1 million people.
• A stable and business-friendly environment.
• A location that can attract and retain strong technical talent.
• Access to good mass transit.
• Access to an international airport.
• The presence and support of a diverse population.
• Excellent nearby colleges and universities.
Q: How many cities responded?
A: By the deadline Amazon set, Oct. 19, 2017, a total of 238. cities and areas sent in proposals. They were located across the United States and Canada. Amazon whittled this down to 20 finalists on Jan. 18, 2018. They were:
• Atlanta
• Austin, Texas
• Boston
• Chicago
• Columbus, Ohio
• Dallas
• Denver
• Indianapolis
• Los Angeles
• Miami
• Montgomery County, Maryland
• Nashville, Tennessee
• Newark, New Jersey
• New York City
• Northern Virginia (Loudoun and Fairfax counties)
• Philadelphia
• Pittsburgh
• Raleigh, North Carolina
• Toronto
• Washington, D.C.
