Amazon Announces New York and Virginia as HQ2 Picks

Instead of choosing one site, Amazon decided on two. The decision will let the company tap into the labor markets of New York and Washington and retain bargaining power with two localities for decades. In tandem, the new major sites will make Amazon one of the largest private tech employers on the East Coast and may, ever so slightly, help shift tech talent eastward, away from Silicon Valley and Seattle.

The company said it would start hiring in New York, Virginia and Tennessee in 2019.

Amazon announced its search in September 2017 for what Mr. Bezos said would be a “full equal to our Seattle headquarters.” Almost 240 locations submitted bids. They used marketing gimmicks — Tucson tried to send a giant saguaro cactus — and formal proposals like training programs and billions in tax incentives.

In January, the online retailer narrowed the list to 20 locations, with places in nine of the 10 largest regions in the country. In the end, Amazon chose to build in two affluent areas with deep benches of high-skilled talent — and where Amazon already had more corporate employees than anywhere else outside the Bay Area and its hometown, Seattle. Mr. Bezos also owns homes in both new areas.

The two locations have parallels. Both sit just across a river from the heart of an iconic metropolis. Both are also seen as having a lot of unfilled potential: Crystal City is a neighborhood filled with office buildings developed in the 1970s for defense contractors but has had high vacancies after the Pentagon reorganized in the years after the Sept. 11 attacks. And Long Island City is a mixed neighborhood home to new apartment towers, low-rise manufacturing and the country’s largest public housing complex.

As the search dragged on, in some places the anticipation turned to antipathy and anxiety, with residents concerned about how their regions could manage a potential housing shortage and congestion that could come with an influx of well-paid workers. Many regions also debated whether one of the largest companies in the world, run by the richest man in the world, needed taxpayer funds.

While Amazon’s criteria made clear that attracting a large, educated work force was paramount in its search, its public competition, and the promise of $5 billion in investments, proved irresistible to the boosterism of elected and development officials around the country. Only a few places, including San Jose, Calif., and San Antonio, publicly declined to throw millions at the giant. Privately, even among the 20 cities on the shortlist, some officials admitted that they were unlikely to land the headquarters.

Amazon was always going to choose the best labor market, but the “genius of the HQ2 process” was the competition that let it squeeze out more incentives, said Margaret O’Mara, a historian at the University of Washington.

“This has been a hallmark of Amazon and other tech companies since the very beginning,” she said. “They have been unwilling to pay any tax unless they absolutely have to, and they have leveraged their market power and the psychic place they hold to get away with it.”