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Sharing Amazon headquarters would be half disappointment, half relief for Crystal City
Nov 07, 2018

Crystal City in Northern Virginia remains favored to land thousands of Amazon jobs as part of the company’s planned expansion, but individuals close to the process said they now expect the project’s 50,000 jobs to be split between at least two cities — an abrupt last-minute change to a search that has lasted more than a year.

The possibility of dividing the project has been discussed with officials in Virginia, according to three people familiar with the negotiations. Virginia officials are prepared to make an announcement soon, once Amazon makes its final decision, according to people close to the talks.

One individual close to the process said Amazon had decided on the split, and another said it was “very much on the table” as recently as a week ago. A third person, who is close to the company, said Amazon had been discussing a split for months, but this person was not sure if a final decision had been made.

Amazon declined to comment, other than to reaffirm its commitment to make a decision this year. Arlington County and the office of Gov. Ralph Northam (D) also declined to comment


(Amazon founder Jeffrey P. Bezos  owns The Washington Post.)

It remains unclear how many — if any — other cities are still in contention. The New York Times reported Monday that half the project was expected to go to Long Island City, in Queens. The offices of New York Gov. Andrew Cuomo (D) and New York City Mayor Bill de Blasio (D) did not respond to requests for comment.While much of the country focused on the midterm elections, officials from five other finalist locations, speaking on the condition of anonymity because they had signed nondisclosure agreements with Amazon, said they had not been told they had been eliminated. There were no signs that either the District or Montgomery County, Md., or Virginia locations other than Crystal City and nearby Potomac Yard in Alexandria, were still being considered.


[Amazon in advanced talks about putting HQ2 in Northern Virginia, those close to process say]

In Dallas, the parent company of the Dallas Morning News submitted a regulatory filing this week agreeing to sell the newspaper’s former downtown headquarters in a deal that would provide additional compensation should the purchasing developer subsequently “enter into an Amazon Agreement.”

A spokesman for the Dallas Regional Chamber, which is handling that city’s bid, declined to comment.

Amazon’s apparent decision, first reported by the Wall Street Journal, to split the project rather than open a second headquarters on par with its Seattle campus angered some who said Amazon 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.


[With Amazon decision looming, improvements in higher ed, housing gain steam]

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.

“Due to the successful growth of the Company, it now requires a second corporate headquarters in North America,” the request for proposalsread.

Bezos personally reiterated the scope of the project in a news release: “We expect HQ2 to be a full equal to our Seattle headquarters,” he said.

Urban-studies author and academic Richard Florida called the process a “sham” that forced cities and states to “cough up incentives.”

Greg Leroy of the D.C.-based advocacy group Good Jobs First said jurisdictions offering fixed-cost subsidies to Amazon, such as promises to expand roads or transit, could be faced with paying the same amount for fewer jobs. “I think it would be very unusual if there are not promises of special deals on the table,” Leroy said.


[Where Bezos’s jet flies most — and what it might say about Amazon’s HQ2 winner]

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. Concerns about the pressure that Amazon’s growth could put on housing, transportation networks and schools also could be eased.

“By choosing two cities, Amazon won’t drive up the cost of labor as much as they might have by focusing their demand in only one metro area,” said Heidi Learner, chief economist at the advisory firm Savills Studley.

“Maybe half is good,” said Mark J. Rozell, dean of the Schar School of Policy and Government at George Mason University. “A lot of people were worried about too much strain on local resources, capacity, schools, housing costs.”


In Virginia and New York, the public remains largely in the dark about what has been offered to the company, as neither state has made its bid public. New York officials have said they have not offered anything to Amazon beyond what is available to other companies, but last week they announced $180 million in infrastructure improvements to Long Island City — which would support Amazon’s campus if it moved there.

[How can the D.C. region absorb an Amazon headquarters if it can’t cope now with gridlock and housing costs?]

After The Washington Post reported Saturday that Amazon was close to a deal for Crystal City, state Del. Lee Carter (D-Manassas) posted on Twitter: “Can’t wait to find out how much public money we’re coughing up for this. And if you think NoVA is expensive now, just wait until we cram in HQ2!”


Officials in Virginia still expect Amazon to make a decision this month, if not in the coming days. Once it does, leaders in losing jurisdictions will be left to assess the time and money they put into seeking 50,000 jobs, particularly if they do not all end up in one place.

“I think we have known for a while that this was something they were considering,” one official from a finalist jurisdiction said about the split. “I wouldn’t say we feel wronged. For one thing, we got millions in free advertising.”

Meanwhile, potential winners were preparing to make the best of the surprising turn of events.

“I’m certain there would be some disappointment” if a jurisdiction had to share the project, said Stephen Fuller, a regional economist at George Mason University. “Everybody is going for the home run here, and maybe it’s just a double. It still would be very significant. Who else is bringing 25,000 jobs?”

Gregory Schneider and Laura Vozzella contributed to this report.

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