Amazon names locations for new US HQs

Andrew Cummings
November 15, 2018

The final deals revealed on Tuesday showed they provided total incentives worth about $2.8 billion total - extraordinarily generous offers to a company whose profits in 2017 totaled $3 billion on $178 billion in revenues, and whose founder Jeff Bezos is the wealthiest man in the world.

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.

NY and Arlington both stand to gain 25,000 jobs each with wages averaging more than $US150,000. NY is making myriad other concessions to Amazon, including allowing construction of a helipad so executives can easily access the campus. "For a high-cost market like Long Island City, incentives are a necessarily evil".

In addition to hiring 25,000 workers with average salaries of $150,000, Amazon plans to create a startup incubator on its new Queens campus.

The company has more than 610,000 employees worldwide, making it the second largest US -based, publicly-traded employer behind Walmart. These include an offer of $8.5 billion in tax incentives and infrastructure aid from Montgomery County, Maryland, a $7 billion offer from Newark, New Jersey, and a $2 billion bid from Pittsburgh, Pennsylvania.

Cuomo described the Amazon deal as "the largest economic development initiative that has ever been done by the city or the state" or both together, at a press conference Tuesday alongside Mayor Bill de Blasio and Amazon Vice President of Global Real Estate John Schoettler.

Amazon created a new neighborhood for its headquarters 2 spanning two northern Virginia cities.

The deal has sparked outrage from NY residents and local politicians, including Representative-elect Alexandria Ocasio-Cortez and state Sen.

Amazon is planning for more than 25,000 full-time jobs as a result of their new 4 million square foot office planned for the city, there is also room for another 4 million square feet of expansion as part of the project. Large government contractors have offices and lobbying operations there. "Instead, Amazon should pay its fair share of taxes for the privilege of locating in one of the greatest cities in the world, and taking advantage of all we have to offer".

It also happens to have checked all of Amazon's boxes.

Jennah Goldman, an Arlington resident who designs custom clothing, was especially pleased to hear the news of her new neighbor.

On Tuesday, top politicians in NY and Virginia cheered the announcement, while property firms reported surging interest in the two neighbourhoods.

New York Governor Andrew Cuomo said the public expense - and the possible number of jobs - would be even higher in Long Island City.

According to the company's own estimation, New York State will pay $1.525 billion (£1.18 billion) in performance-based incentives for the privilege - almost as much as Amazon has received across all prior subsidies combined, according to watchdog group Good Jobs First. As well, the company will receive a cash grant of $US325 million.

The US$5 billion investment will mean thousands of high-paying jobs in the two locations, but could also strain services and housing in areas with already high living costs.

The agreement also pledges assistance in securing a helipad, with flights limited to 120 per year and limited to company executives. "But instead of bailing out the people here in NY, our own Democratic governor is willing to give-transfer wealth out of NY and give it directly to the pockets of the richest man on the planet?"

But it isn't clear they are good investments, said Jay Shambaugh, director of the Hamilton Project at the Brookings Institution. "So I don't have an idea about how they put together their transaction".

"If you're a local retailer or small manufacturer or artist or writer or publisher, you're watching as your city and state hands your tax dollars to your most ferocious antagonist", she said.

As word spread in the last few weeks that Crystal City was on the shortlist to land Amazon, housing demand has skyrocketed.

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