Posted on Nov 13, 2018 at 5:33 pmUpdated Nov 13, 2018, 7:10 PM
Did it really take fourteen months and 238 proposals to Amazon to decide to set up its new offices in… New York and Washington? At the end of what the mayor of Toronto called « tax competition », the American e-commerce giant has finally chosen to split its second head office into two sites: one in the district of Queens, in New York, the other in the suburbs of Washington, near the Ronald Reagan airport, in Arlington.
Fearing that it would not be able to recruit in such a demanding way by concentrating in one place, the company preferred to spread its budget of 5 billion dollars over two cities. Each will therefore benefit from 2.5 billion dollars of investment and 25,000 job creations.
But Amazon wanted to avoid being accused of over-favoring large coastal cities, at a time when the country’s divisions between rural and urban areas are exacerbated. The group has therefore chosen to open a third, more modest center in Nashville, Tennessee, where 5,000 people will be hired to supervise operations (orders, transport, logistics, etc.).
Incubators, artist projects, public school …
Euphoric, New York and Arlington insisted on Tuesday on the benefits of this project for neighboring communities. In recent weeks, voices had indeed been raised to denounce the tax competition launched by Amazon between communities, and the shortfall for some residents who could not hope to apply. “With an average salary of $ 150,000 per year for the tens of thousands of new jobs Amazon is creating in Queens, investment will flourish across the region as a whole,” welcomed, for his part, the Governor of the State of New York, Andrew Cuomo.
In Long Island City, a former industrial city overlooking the East River that has experienced an economic boom in recent years, Amazon has promised to develop dedicated spaces on its campus for incubators, industrial companies, artist projects and to create a new public school. In Virginia, it is the authorities who will launch major renovations in this area bordering the airport and fallen into disuse in recent years. On each of the two sites, offices of nearly 400,000 square meters will be built, with the possibility of doubling the area, said Amazon.
Key tax revenue
For the states and cities concerned, the project should also generate significant tax revenues. The New York site will collect more than $ 10 billion in tax revenue over twenty years, that of Arlington over $ 3.2 billion over the same period and Nashville over $ 1 billion over ten years. In return, Amazon will receive $ 1.5 billion in grants and tax credits in New York, $ 573 million in Arlington, and $ 102 million in Nashville. The company intends to start recruiting in 2019.
The announcement puts an end to a masterfully organized tender that has held the United States in suspense for over a year. The promise of 50,000 job creation and 5 billion investment has caused fierce competition between communities, in the United States, but also in Canada and Mexico, cities fighting with tax incentives to attract the attention of the group. Newark, New Jersey, offered $ 7 billion in tax cuts. Some, however, preferred to stay away, convinced that Amazon knew from the start where to locate its sites.