Amazon won’t be searching for a new HQ2 location after the company’s surprising decision to back out of its deal with New York CIty.
The Seattle-based tech giant announced Thursday that it will cancel plans to build a 25,000-person office in the Long Island City neighborhood after facing backlash from elected officials and community leaders.
The stunning announcement is the latest chapter in Amazon’s unprecedented HQ2 search, a year-long competition between cities eager to host the company’s second headquarters.
This past November, Amazon announced it would split its 50,000-person second headquarters between Northern Virginia, just across the Potomac River from Washington D.C., and New York. Each location, Amazon said, would house between 25,000 and 40,000 tech workers. The company also unveiled plans to open a smaller, 5,000-person office in Nashville.
With the New York plans now out of the picture, what will Amazon do with the 25,000 jobs it planned to create in The Big Apple?
“We do not intend to reopen the HQ2 search at this time,” Amazon said in its statement Thursday. “We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.”
Earlier this week, GeekWire traveled to the Washington D.C. area and sat down with Victor Hoskins, director of Arlington Economic Development who helped lead the HQ2 bid for Northern Virginia. Amid rumors of Amazon’s planned exit from New York City (that ultimately materialized on Thursday), Hoskins said Amazon had not contacted his office specifically about relocating an additional 25,000 planned jobs to the Arlington area.
“They are pursuing their objective there and they are pursuing their objective here,” he said. “I think that’s the right way to go until circumstances change.”
Asked if Arlington has room for more than 25,000 Amazon workers, Hoskins said the agreement with Amazon already includes an option to create as many as 37,850 jobs by 2034.
“We can easily accommodate both of those numbers,” he said, adding that “we already have capacity for up to 14 million square feet of office space and they’re only looking for four to six million.”
Hoskins said on Monday that he thought Amazon’s deal with New York City would go through, despite the backlash.
“It’s too much at stake for the city,” he said. “I mean, it’s a wonderful outcome for them.”
On a conference call with reporters Thursday, Arlington County Board Chair Christian Dorsey said there are no plans to ask Amazon to shift their intended New York City investment to Arlington.
“We are not changing what we want from Amazon,” Dorsey said. “We have a path for 25,000 and up to 37,850. We are comfortable with that and not making a play for any more [jobs].”
But Dorsey did say that the Arlington area could “generally accommodate” 50,000 jobs over the next 15 years, whether it’s from Amazon or other companies.
The reception to Amazon in Northern Virginia has been more welcoming than New York City. The Virginia House approved $750 million in subsidies last month after just nine minutes of deliberation. The Arlington County Board is expected to vote on the incentive package for Amazon in March.
Dorsey said Arlington isn’t taking pride or enjoying new bragging rights now that it is the sole HQ2 city.
“It certainly makes it less complicated whether we call this HQ2 or HQ2b,” he half-joked.
Asked about potential backlash in Arlington due to Amazon leaving the New York City deal, Dorsey said “I certainly think it likely will cause people to increase their opposition.”
“But I want to underscore how very different our community circumstances are,” he continued. “In Arlington, we have had these difficult community conversations about growth and about the particular areas that Amazon is looking to occupy. Our community is ready to embrace that level of activity.”
Here’s more from Dorsey on the differences between the two regions, in terms of welcoming Amazon:
“I think for a lot of reasons, Queens and Arlington are very different. But the most important one relevant to this conversation is that all of the elements that Amazon would have to go through in terms of planning for land use, going through zoning — those sorts of issues have largely been handled by community conversations that we’ve had previously. Even though we didn’t have Amazon in mind, we planned for this growth nearly a decade ago in the area that they’re coming to. So our community very much has already had those consensus conversations about the number of employees who would come and what kind of associated investments in infrastructure in the public realm would need to take place to accommodate that level of employment activity, as well as the surrounding neighborhoods. We’ve done that hard work already. So when it comes to the kind of opposition about how Amazon will fit, we’ve already gone through it, we’ve already done it, and that wasn’t a source of public conversation.”
Dorsey also said Thursday’s news does not affect his perception of Amazon or how the company might change its tune in Arlington. More from his comments:
“Our dealings with Amazon have been collegial and collaborative. They haven’t asked anything from us other than what we’ve said to our community that we’re willing to offer. In that sense they’ve been a completely honest broker and we feel good about our relationship with them thus far. I can’t speculate about what went wrong in New York and I actually don’t really want to care to think about it too much other than treating Amazon as they have treated us and that is being transparent, honest, forthright, and not asking us to change at all. That’s the key takeaway from all of this. They have not only accepted who we are, how we do things, and our values — they’ve embraced it. As long as that continues, we’ll have no problems here.”
Shares of JBG Smith properties, a leading real estate developer in the area where Amazon plans to establish its offices in Northern Virginia, were up more than 1 percent after Thursday’s announcement.