September 2017 saw Amazon announce its expansion of a second headquarters within the U.S. The HQ2 project threw cities into a tailspin. All of them started drawing up proposals, coming up with incentive packages and more in hopes of the ever-expanding marketplace choosing them as their location of choice.
Amazon’s original promise was that of 50,000 jobs with the average salary of $100,000 reports Vox. The new headquarters would require about 8 million square feet of office space, need to have access to public transportation and an airport.
For the past year, there was much speculation on where Amazon would ultimately choose. Now, it looks like they’ll split the headquarters between two campuses, one in Crystal City, Virginia and one in Long Island City, New York. The two cities fit Amazon’s airport requirement, are equipped with public transportation, and have proximity to their respective major city centers.
Critics have come out in droves stating that Amazon may choose two cities that are already undergoing gentrification and have a shortage of affordable housing. Also, both cities have a median income well above the national average. Other major cities are in dire need of jobs and economic investment and have an adequate housing supply. They believe that tax incentives and benefits packages provided by the local governments was what sealed the deal. It is hard to know as the entire process has lacked transparency.
Not Everyone is On Board
Although, some government officials are not necessarily on Amazon’s side. New York state senator Michael Gianaris told CNN business, “My understanding is the public subsidies that are being discussed are massive in scale. Why we would need to give scarce public dollars to one of the richest companies on Earth is beyond me.”
Despite that sentiment, New York City Mayor Bill de Blasio said housing the HQ2 project is a “tremendous opportunity.” CNN Business reports that the mayor added that, “there are real development pressures to be navigated.” He stated that New York would not grant the company any further incentives than what is available to all businesses looking to develop in the city. Besides, activist groups have stood against HQ2 on the stance that the funds from the tax breaks and incentives would be better used to fight homelessness, fund public schools, etc., details Intelligencer.
So why exactly would Amazon choose Crystal City and Long Island City, two cities with high labor costs and high backlash? Intelligencer theorizes that they want to be close by suppliers, customers and other competititors in tech. Another overlooked factor is that people want to be in New York or D.C where the two cites are a short train ride away. If you’re going to lure a highly skilled workforce with plenty of options, you’ve got to go where they would want to be.