Amazon splits HQ2 between Crystal City, Va. and New York
WASHINGTON • Amazon will open major new outposts in northern Virginia’s Crystal City and in New York City, splitting its much-sought investment of up to 50,000 jobs between the two East Coast sites, according to people close to the decision-making process.
An announcement could come early as Tuesday, according to the people, who spoke on the condition of anonymity because they had signed nondisclosure agreements with the company.
An Amazon spokesman declined to comment. The company has said it would make a decision on the high-profile project, which it calls HQ2, this year.
The choice of Crystal City in Arlington County as one of the winners could cement northern Virginia’s reputation as a magnet for business and potentially reshape the Washington, D.C., region into an East Coast outpost of Silicon Valley over the next decade.
This Friday, Nov. 9, 2018, photo shows a view of Washington from a revolving restaurant in Crystal City, Va. If any place in the U.S. is well positioned to absorb 25,000 Amazon jobs, it may well be Crystal City which has lost nearly that many jobs over the last 15 years. (AP Photo/Susan Walsh)
The decision also would hand Virginia Gov. Ralph Northam, and local leaders the largest economic development prize in a generation — one promising billions of dollars in capital investments alone — but could also put pressure on the region’s already steep housing prices, congested roads and yawning divide between wealthy and low-income residents.
It also represents a victory for New York Mayor Bill de Blasio and Gov. Andrew Cuomo, who had joked that he would change his name to “Amazon Cuomo” if necessary to land the prize.
Other final suitors included the District of Columbia, Montgomery County, Md., and 16 other jurisdictions Amazon has considered since narrowing its list in January. News of the decision was first reported by the Wall Street Journal.
Amazon’s decision to split the project rather than open a second headquarters on par with its Seattle campus has angered some who said the company had ginned up competition among cities only to change the rules midstream. Some said it was unfair that the company seemed to be considering only sites in more affluent communities.
Amazon launched the project in the fall of 2017, dubbing it HQ2 and issuing search criteria for “a second corporate headquarters” with as many as 50,000 jobs and an investment of $5 billion.
Amazon CEO Jeff Bezos personally described the scope of the project, saying in a news release: “We expect HQ2 to be a full equal to our Seattle headquarters.” (Bezos owns The Washington Post.)
Others said a split makes sense for Amazon because of the difficulty of finding 50,000 qualified workers — many of them computer engineers — in a single region. Dividing the project also could ease concerns about the pressure that Amazon’s growth could put on housing, transportation networks and schools.
In picking Crystal City, Amazon opted for a close-in suburban site, just across the Potomac River from Washington, D.C., and a half-mile from Reagan National Airport. Outdated buildings and underused properties now fill the site, including yawning vacancies in some of the office buildings.
In New York, the company had been eyeing a neighborhood in Queens called Long Island City. Long Island City is across the East River from midtown Manhattan.
Arlington County offered Crystal City as part of a joint bid with an adjoining property at Potomac Yard, in the City of Alexandria.
The state played a leading role in sponsoring the bid, including offering incentives that have not been disclosed publicly.
The selection represents a triumph for the growth strategy of Arlington and Alexandria to promote development along mass transit routes. The site is close to the Crystal City Metro station on the Blue and Yellow lines, and the planned Potomac Yard station scheduled to open in 2021.
But residents in the nearby Del Ray neighborhood in Alexandria expressed worry this year that Amazon’s arrival would worsen daily rush-hour backups that already slow traffic to a crawl, and erode the quality of life in their neighborhood of mostly single-family homes.
The decision marks a dramatic upturn in fortune for Crystal City, which lost thousands of jobs when military agencies and defense contractors departed in the Pentagon’s Defense Base Closure and Realignment Commission (BRAC) process, beginning in 2005. The initial building that Amazon would occupy is at 1851 South Bell Street or 1770 Crystal Drive in Arlington, Va., according to individuals familiar with the decision.
One advantage is the properties are all overseen by a single, well-capitalized company, JBG Smith.
The $4.4 billion company is the region’s biggest real estate owner, most active developer, and owns a majority of the property in the bid — enough to accommodate the entire project on its own.
Although 238 locations initially submitted proposals to Amazon, the Washington, D.C., region was considered a favorite from the outset by many experts due to Bezos’ personal connections in the region, particularly the $23 million mansion he purchased in the city’s Kalorama neighborhood last year and his ownership of The Washington Post.
In this Wednesday, Nov. 7, 2018, photo, the Long Island City waterfront and skyline are shown in the Queens borough of New York. One of the areas that Amazon is considering for a headquarters is Long Island City. An old manufacturing area, it’s cultivating a new image as a hub for 21st-century industry, creativity, and urbane living. (AP Photo/Mark Lennihan)
In this Thursday, Nov. 8, 2018, photo, pedestrians walk the underground corridors in Crystal City, Va. If any place in the U.S. is well positioned to absorb 25,000 Amazon jobs, it may well be Crystal City, which has lost nearly that many jobs over the last 15 years. The community wedged between the nation’s capital, Reagan National Airport and the Pentagon, has abundant infrastructure, including rail transit and available commercial space. (AP Photo/Matthew Barakat)
This Friday, Nov. 9, 2018, photo shows a view of Crystal City, Va., and the United States Air Force Memorial as seen from a revolving restaurant. If any place in the U.S. is well positioned to absorb 25,000 Amazon jobs, it may well be Crystal City which has lost nearly that many jobs over the last 15 years. (AP Photo/Susan Walsh)
In this Wednesday, Nov. 7, 2018, photo, people walk past a mural in Long Island City in the Queens borough of New York. Across the East River from midtown Manhattan, Long Island City is a longtime industrial and transportation hub that has become a fast-growing neighborhood of riverfront high-rises and redeveloped warehouses, with an enduring industrial foothold and burgeoning arts and tech scenes. (AP Photo/Mark Lennihan)
In this Wednesday, Nov. 7, 2018, photo, a rusting ferryboat is docked next to an aging industrial warehouse on Long Island City’s Anable Basin in the Queens borough of New York. Across the East River is midtown Manhattan, top left. Long Island City is a longtime industrial and transportation hub that has become a fast-growing neighborhood of riverfront high-rises and redeveloped warehouses, with an enduring industrial foothold and burgeoning arts and tech scenes. (AP Photo/Mark Lennihan)
In this Wednesday, Nov. 7, 2018, photo, traffic moves along 44th Drive in Long Island City, Wednesday, Nov. 7, 2018, in the Queens borough of New York. Long Island City is a longtime industrial and transportation hub that has become a fast-growing neighborhood of riverfront high-rises and redeveloped warehouses, with an enduring industrial foothold and burgeoning arts and tech scenes. (AP Photo/Mark Lennihan)
In this Wednesday, Nov. 7, 2018, photo, a construction crane is perched on the site of Court Square City View Tower adjacent to the Court Square Number 7 subway station in Long Island City in the Queens borough of New York. When complete, the 963-foot residential tower will house 774 apartments. (AP Photo/Mark Lennihan)