Amazon picks New York City, Virginia for $5 billion new headquarters

SAN FRANCISCO, Nov 13 (Reuters) - Inc said on Tuesday it will build offices for up to 25,000 people in New York City's Queens borough and in Northern Virginia, near Washington, D.C., ending a year-long bidding war for a $5 billion second headquarters that will now be split in two.

In addition, Nashville, Tennessee, will be home to Amazon's new East Coast hub of operations, adding 5,000 corporate jobs.

The move boosts Amazon's presence around New York City and the nation's capital while also giving it more of a foothold in the center of the country as it seeks to gain a recruiting edge over Silicon Valley tech companies.

RELATED: Twitter reacts to Amazon HQ2 rumors

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Twitter reacts to Amazon HQ2 rumors
Gonna be hilarious when half the HQ2 employees work remotely from cities they could afford to buy homes in
If #HQ2 ends up in NYC & DC regions, 3 takeaways: 1. #Amazon picked existing super regions, as expected, highlighti…
So Amazon lied throughout the entire H2 search process, making cities ante up in expectation of a far, far bigger d…
this guy is right "HQ2" was basically an enormous PR stunt to get the best tax breaks possible from local governme…
Indeed. A shameful charade in which a wealthy corporation conned public officials into giving away public resources…
the single most valuable thing to come out of HQ2 is the local journalism across the country about how cities tried…
Can’t wait to see your faces when @JeffBezos announces Amazon HQ2 will be a vast traveling city on gigantic tank tr…
I'd love to know what the 240 cities that applied for HQ2 think about this, especially the other 18 finalists that…
Hearing that @amazon is choosing their #HQ2 between the DC area, NYC and Dallas is like Bryce Harper choosing betwe…
This whole #HQ2 thing is so ridiculous — grotesque how Amazon has manipulated cities
If Amazon is really about to name DC (or the outskirts of DC) as their HQ2, I'm going to vomit. It will be a clear…
If #HQ2 is going to Northern Virginia (DC) as the obvious choice, I think residents of the 200+ other cities who lo…

The new Washington headquarters will be located in National Landing, in Arlington, Virginia, and the New York City headquarters will be located in the Long Island City neighborhood in Queens.

"These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," said Jeff Bezos, founder and CEO of Amazon.

Amazon had received more than 200 proposals from across North America vying for a home base in addition to its Seattle headquarters.

New York and Virginia beat out 18 others, including Los Angeles and Chicago, on a short list Amazon released in January.

Cities and states promised billions of dollars of tax breaks and other inducements in exchange for Amazon's so-called HQ2. They also handed over infrastructure, labor and other data that could prove useful in other ways to the world's largest online retailer.

It was not immediately clear how negotiations unfolded once Amazon settled on the plan for two offices. The company had originally said it would spend more than $5 billion and add up to 50,000 workers at one location.

Amazon said the split gave it more geographic diversity for recruiting and could also help lessen congestion and cost-of-living increases that would have accompanied one bigger office.

The company has already had to navigate similar issues at its more than 45,000-person urban campus in Seattle. An affordable housing crisis there prompted the city council to adopt a head tax on businesses in May, which Amazon helped overturn in a subsequent city council vote.

The headquarters split also means the economic benefits for the hosts will be muted relative to expectations, especially given the selected cities' size verses some of the other shortlist contenders.

The two areas already have relatively low unemployment rates, and Fitch Ratings has noted that even a full HQ2 only represented 1.5 percent of the Washington area and 0.5 percent of the New York area's labor force. The particular neighborhoods Amazon chose offer lower rents and more attractive zoning than central business districts nearby, a Brookings Institution report said.

Some critics had pushed for more transparency from cities and states in the bidding process, warning that the benefits of hosting a massive Amazon office may not offset the tax-payer funded incentives and other costs.

The company has said it helped boost Seattle's economy indirectly by $38 billion between 2010 and 2016. Construction and service work has increased, catering to Amazon, and the company said it also helped attract other Fortune 500 businesses to Seattle.

Amazon has already been awarded more than $1.6 billion of state and local public subsidies across the United States since 2000, with most of that after 2012, according to a database from the Washington-based government watchdog Good Jobs First.

Amazon did not comment on the Good Jobs First numbers but said it has invested $160 billion in the United States since 2010, including in warehouses, data centers and employee compensation.

(Reporting by Jeffrey Dastin in San Francisco Writing by Nick Zieminski Editing by Meredith Mazzilli and Bill Rigby)

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