Amazon Makes Its Announcement, Adds Nashville To the Mix

As expected Amazon announced its decision to co-located its second headquarters in New York City and Northern Virginia this morning.

It also announced that in addition, it has selected Nashville for a new Center of Excellence for its Operations business, which is responsible for the company’s customer fulfillment, transportation, supply chain, and other similar activities. The center will create more than 5,000 jobs.

National Landing?

Amazon made the curious statement that in Northern Virginia it will be locating in National Landing, which is familiar to no one in the area. Wall Street Journal news desk chief Tim Hanrahan posits in a Tweet that Amazon is rebranding the Crystal City neighborhood because of its proximity to the Ronald Reagan National Airport.

The New York City headquarters will be located in the Long Island City neighborhood in Queens. The Nashville center will be located in the city’s downtown as part of a new development site just north of the Gulch. Hiring for all the sites will begin in 2019.

“We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon. “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 Incentives

Amazon famously conducted a beauty search for its new headquarters, winnowing down a list that started out in the 200s to these two cities. In its announcement it revealed the incentives it is receiving for the headquarters.

From New York Amazon will receive $1.525 billion based on the company creating 25,000 jobs in Long Island City. This includes a refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years. Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year and as it reaches building occupancy targets. The company will separately apply for as-of-right incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP).

From Virginia Amazon will receive $573 million based on the company creating 25,000 jobs with an average wage of over $150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to $550 million based on $22,000 for each job created over the next 12 years. Amazon will only receive this incentive if it creates the forecasted high-paying jobs. The company will also receive a cash grant from Arlington of $23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.