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Sat December 15 2018

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Amazon picks two locations for $5bn expansion

14 Nov New York City and Northern Virginia are to join Seattle as the locations of Amazon's headquarters in North America.

Amazon will invest US$5bn (£3.9bn) and create more than 50,000 jobs across the two new headquarters. In addition, it plans open a new operations centre of excellence in Nashville, creating more than 5,000 further jobs.

There will be more than 25,000 employees each in New York City and Arlington, Virginia. The new locations will join Seattle as the company’s three headquarters in North America.

The new Washington, DC headquarters in Arlington will be located in National Landing, and the New York City headquarters will be located in the Long Island City neighbourhood in Queens. Hiring at both the new headquarters and in Nashville will begin next year.

“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 team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

Each HQ will involve construction of four million square feet of energy-efficient office space with an opportunity to expand to eight million square feet.

In New York, Amazon will receive performance-based direct incentives of US$1.525bn based on the company creating 25,000 jobs in Long Island City. This includes a refundable tax credit of up to US$1.2bn calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to US$48,000 per job for 25,000 jobs with an average wage of over US$150,000. There will also be a cash grant from Empire State Development of US$325m 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 apply for incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation & Employment Assistance Program (REAP).

New York governor Andrew Cuomo said. “With an average salary of $150,000 per year for the tens of thousands of new jobs Amazon is creating in Queens, economic opportunity and investment will flourish for the entire region. Amazon understands that New York has everything the company needs to continue its growth. The State’s more than $100 billion transportation infrastructure program – the most ambitious in our history – combined with our education initiatives like K-12 tech education and the first-in-the-nation Excelsior Scholarship program, will help ensure long-term success and an unrivaled talent pool for Amazon.”

National Landing is an urban community in Northern Virginia located less than three miles from downtown Washington, DC. The area is served by three Metro stations, commuter rail access, and Reagan National Airport – all within walking distance. The community also has a variety of hotels, restaurants, high-rise apartment buildings, retail, and commercial offices.

Amazon will receive performance-based direct incentives of US$573 million based on the company creating 25,000 jobs with an average wage of over US$150,000 in Arlington. This includes a workforce cash grant from the Commonwealth of Virginia of up to US$550 million based on US$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 US$23 million over 15 years based on the incremental growth of the existing local Transient Occupancy Tax, a tax on hotel rooms.

The Commonwealth of Virginia will invest US$195m in infrastructure in the neighbourhood, including improvements to the Crystal City and the Potomac Yards Metro stations; a pedestrian bridge connecting National Landing and Reagan National Airport; and work to improve the crossing of  Route 1.

Governor Ralph Northam of Virginia said: “This is a big win for Virginia – I’m proud Amazon recognizes the tremendous assets the Commonwealth has to offer and plans to deepen its roots here. Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century, and I’m excited to say that our innovative approach was successful. The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure that will bolster the features that make Virginia so attractive: a strong and talented workforce, a stable and competitive business climate, and a world-class higher education system.”

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