Saturday , August 20 2022

Amazon HK2 decision: Amazon splits the award between Cristal City and New York


Amazon will open major outlets in Cristal City in North Virginia and New York, sharing its required investment of up to 50,000 jobs between the two east coasts, the company said on Tuesday.

"We're excited to build new headquarters in New York and North Virginia," said Amazon Jeffrei Founder and CEO. Bezos in a statement. "These two locations will allow us to attract a world-class talent that will help us continue to invent for customers in the coming years. The team has done a great job of selecting these locations and are looking forward to becoming an even bigger part of these communities."

The company also announced that it has selected Nashville for 5,000 jobs under the new Center for Excellence for its business operations, which is responsible for the fulfillment, transportation, supply chain and similar activities of the company.

The choice of Cristal City in Arlington Counti as one of the winners links North Virginia's reputation as a magnet for business and will potentially transform Washington into the eastern outpost Silicon Valley in the next decade.

The selection came with a price, whose details only became public. Virginia Virginia executives Ralph Northam (D) and Arlington Counties leaders agreed to give Amazon direct subsidies in the total amount of $ 573 million, based on a company that creates 25,000 jobs with an average salary of $ 150,000. The state and counties will also invest a total of $ 223 million for improvements in transportation that will be used by Amazon as well as the rest of the community.

This photo taken on November 7, 2018 shows a view of the Long Island Citia shore in Queens Quarter in New York along the eastern river. Amazon decided to split its new headquarters between New York City and Crystal City, Va. (Photo by Don EMMERT / AFP / Getti Images)

The money, approved by the General Assembly of Virginia, also includes $ 195 million in improving traffic at nearby metro stations, Reagan National Airport, and build a pedestrian bridge linking the company's new hub, which will be in the new branded settlement "National Landing", which includes parts of the Pentagon and Crystal City in Arlington and the Potomac yard in Alexandria.

Virginia Tech plans to build a $ 1 billion graduate campus in Alexandria, focusing on innovation, part of the higher education package offered by the state to the company.

Northam said that Virginia's technological talents and stable business environment are key to winning the prize. He announced a formal announcement of a warehouse agreement in Cristal Citta in a location that will eventually find Amazonian assets, told a number of state and local officials and business leaders: "We are committed to being the first to bring the next technological and innovative breakthrough."

Covered through the lecture he spoke to Northam was the reading of signs: "Virginia is for Amazon fans."

New York's leaders offered Amazon more money – $ 1.85 billion, most of them linked to job growth and company wages.

The decision of the Northam leadership and local leaders represent the greatest award for economic development in one generation – which promises billions of dollars only for capital investment – but could put pressure on the already higher housing prices in the region, overloaded roads and divide between rich and small-hire tenants .

Northam said in a statement that he expects Amazon to invest $ 2.5 billion in the community and generate $ 3.2 billion in tax revenues.

Under a 25-page agreement between the company and the state, Amazon expects to engage 400 people in 2019 and 1,180 next year. It expects to create at least 25,000 jobs by 2030, and potentially total 37,850 to 2034.

"This is a great victory for Virginia – I am proud that Amazon recognizes the huge assets CommonValley can offer and plans to deepen its roots here," he said.

It also represents a victory for New York City Mayor Bill de Blasio (D) and the government of Andrew M. Cuomo (D), who joked about to change his name to "Amazon Cuomo" if needed for the landing of the project.

Other final respondents included District, Montgomery County and 16 other Amazon jurisdictions, as they reduced their list in January. Mayor D.C. Muriel E. Bovser (D) and Governor Mariland Larry Hogan (R) both welcomed this announcement.

Nor will they have to repeat incentives for the company, but experts say they should both see economic gains as a result. Bovser urged regional leaders to create concrete accessibility goals for housing care – an acute problem that economists say will worsen as Amazon is growing.

"Amazon in Arlington is a victory for D.C.," Bowerser said in a statement. "We will continue to prepare residents with the skills and knowledge they need for the future, including Amazon."

Hogan said he expects other companies to move to the region to be near Amazon. "Collectively, we will not only get 25,000 jobs at the enterprise level, but also many companies that are part of the Amazon supply chain," Hogan said.

AOL's founder Steve Case, who now works with technology entrepreneurs in smaller cities, issued a statement encouraging them not to lose faith despite the selection of two eastern shores.

"The best economic strategy is not to attract existing companies to open offices or factories, but to work on new companies that could be Amazon's tomorrow," he said. But in the same issue, the long-time resident of North Virginia won on wings: "Amazon's announcement is a victory not only for VA, but for the larger region of D.C."

The movement's opposition began shortly after its release, as groups dedicated to combating inequality and contradiction with subsidies in businesses began to gather their supporters in New York and Virginia, as the details of the deal began to appear.

"We got calls and campaigns from Kueens residents throughout the day. Community response? Surprise," said Rep. Alekandria Ocasio-Cortez (D-NI), who will take office in January.

Many were worried about the cost of living and wondering why a company run by Bezos – the richest person in the world – needed any public funds.

"We are unconvinced that we will sign Amazon's $ 3 billion costs," said New York senator Michael Gianaris and city council member Jimmy Van Bramer, especially considering city minares, crowds and inadequate health care.

"We are witnessing a cynical game in which Amazon cheated New York to offer incredible amounts of tax dollars to one of the richest companies on earth to promise jobs that would represent less than 3 percent of jobs usually created in our city for a ten-year period," they wrote in announcement.

However, Cuomo said the benefits were downgraded for subsidies.

"The incentive incentive is from 9 to 1. This is the highest return rate for an economic incentive program that the country has ever offered," Cuomo said. He is opposed to returning from a state tax credit, saying that the state gets $ 1.15 for every $ 1 it invests in.

Similar concerns are expressed in Virginia.

"Thousands of new high-paid jobs could be good for our community, but we deserve to find out the costs," said Anna Scholl, executive director of the advocacy group Progress Virginia. "Tens of thousands of new workers and their families will surely reduce the community's resources when it comes to affordable housing, mass transit and traffic and quality local schools." Amazon is right to pay its good share. "

Jai Carnei, Senior Vice President of Amazon for Corporate Affairs around the world, said that the company carefully reviewed all locations and reviewed 100 different metrics, but finally made the decision – including the choice of project split – based on how best a company can recruit She needs talent.

"We realized that this is, of course, two fantastic metropolises, and each area has an existing talent and fantastic places to live," he said in a telephone interview.

Carnei said Amazon will use some of the lessons she learned from her growth in Seattle to new locations. He said that Bezos was "very deeply involved" in the process and was at every leader's meeting that was being discussed.

Amazon's decision to share the project instead of opening another headquarters at the level of its camp in Seattle angered some who said that the company reversed competition among cities only to change the rules in the middle. Some said it was unfair that the company seemed to be considering only sites in richer communities.

"One thing that's different here is that we plan ahead with these cities." Amazon began in the garage. No one predicted, even Jeff, when they launched that Amazon would become what became or that we would have dozens of thousands of employees in Seattle "said Carnei.

Amazon launched the project in the autumn of 2017, dubbing HK2 and issuing search criteria for "another corporate headquarters" with as many as 50,000 jobs and an investment of $ 5 billion.

When selecting Cristal Citi, Amazon decided to close a suburban location, across the Potomac River from Washington and half a mile from the National Airport. Outdated facilities and underused properties are now populating the site, where some business buildings have rabbits' free shops.

The selection represents a triumph for the growth strategy of Arlington and Alexandria for the promotion of development along the mass transit paths. This location is near the Cristal Citi subway station on a blue and yellow line, and the planned station Potomac Iard was scheduled to open in 2021.

But residents in the neighborhood of Del Rai in Alexandria have expressed concern earlier this year that the arrival of Amazon will aggravate everyday backups that have already slowed down traffic to floods and will reduce the quality of life in their neighborhood to most family homes.

The decision marks a dramatic increase in fortunes for Cristal City, which lost thousands of jobs when military agencies and defense workers went to the Pentagon's Bracing and Defense Unit (BRAC), starting in 2005.

One advantage is that all objects are monitored by one, well-capitalized company, JBG Smith. The $ 4.4 billion company is the largest owner and the most developed investor in the region, and it owns most of the offered property – enough to adapt the entire project independently to Cristal Citt and Potomac Iard.

The choice of Amazon also ignite the position of North Virginia as an attractive place for corporate headquarters. For the past 15 years, the Volkswagen Group of America has attracted to Herndon, Northrop Grumman at the Falls Church, Hilton Vorldvide in Tysons and Nestle in the United States in Arlington.

Northam said in March that the state focuses on the development of workforce, inclusiveness and transport, along with the quality of life.

Although 238 sites originally submitted proposals to Amazon, many experts regard the Washington region as favorite from the very beginning because of Bezos's personal connections in the region, and in particular the yard of $ 23 million he bought in the neighborhood of Kalorama last year and his ownership of The Post- om.

Others have suggested that Amazon's managers want to be close to Washington to apply to the federal government, either because of increased concerns that regulators can take antitrust action against the company or because the government has become a critical Amazon buyer.

Virginia also offers a political advantage to be a purple state, making it easier for the company to seek the support of both parties.

Amazon has previously announced that it will be seating its cloud computing unit, Amazon Web Services, in Herndon, near some of its data processing centers.

The Washington area also naturally meets the many criteria Amazon has sought in its quest, among them a deep pool of talented workers, a robust public transit system and easy access to the airport.

Amazon launched its search in September 2017, promising to make a decision by the end of 2018 and occupy an initial building of 500,000 square feet in 2019.

The company says its headquarters in Seattle injected $ 38 billion more than what the company spent on its buildings in the economy of the area, which led to an additional $ 1.40 for every dollar the company spent.

Seattle officials did not dispute the figures, but they also rushed to keep pace with the growth of the company's growth and the demands it puts on public transit, schools, road networks, parks and utilities. The company now has more than 45,000 employees, occupying more than 40 buildings and 10 million square feet of office space.

Compared to other large corporations, Amazon employees are less likely to travel by car, as about 55 percent or walk, a bike or take a public transit, according to a survey the company has done from its workforce in Seattle. The company is purchasing transit cards for employees and building a special bike path for separating bikes from cars near their buildings in Seattle.

It will also probably increase Amazon's growth in housing. Since the arrival of Amazon, Seattle has become one of the most expensive places in the United States that have been living, forcing low-income people to move into a far-off suburb. City and surroundings King Counti have declared a state of emergency in 2015 because of the homeless.

Even without Amazon, the Government Government Council in Washington estimated that by the year 2025, 235,000 housing units should be added to keep pace with the expected growth in business. The arrival of Amazon could push the target above 267,000, according to a recent analysis of the Urban Institute. At the moment, it is in the rhythm that we add about 170,000 new units by 2026.

From the start of search at the headquarters, Bezos and the company have made several announcements that can soften the image of Amazon while moving to open its second center.

Bezos announced in September that it will donate $ 2 billion of its money to support groups fighting homeless in America and creating a network of pre-school institutions in minority communities. In October – after months of criticism by Sen. Bernie Sanders (I-Vt.) Because of his treatment of workers – Amazon has announced that it will increase the minimum wage for all employees at $ 15 per hour.

The minimum wage decision is unlikely to have a major impact on the company's employment in North Virginia, where Amazon says its facility will employ mostly workers with an average salary of more than $ 100,000 a year.

Before Amazon published its search, the responsibilities of the Washington area – partly caused by a reduction in the federal budget – have already diversified their workforce away from reliance on federal spending. The region has gained more than 55,000 jobs a year from 2015 to 2017. Despite budget cuts and stagnation in the Congress. But the growth of the job is slower than the average among the main metropolitan areas.

Patricia Sullivan, Gregory S. Schneider, Michael Laris and Fenit Nirappil contributed to this report.

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