November 13, 2018
Amazon is not coming to Philadelphia.
The online retail giant will split its second headquarters – known as HQ2 – between two locations.
Amazon is expanding to National Landing, Virginia, a cluster of office buildings near Ronald Reagan Washington National Airport in Arlington County, and Long Island City, a neighborhood in the borough of Queens in New York City.
That news became official Tuesday morning.
It became apparent earlier in November that Philadelphia would not be chosen as reports surfaced that the online retailer planned to split its second North American headquarters across two locales.
Philadelphia Mayor Jim Kenney released a statement Tuesday morning, thanking Amazon for considering Philly:
"I also recognize the value of this competitive process, which has benefited our city in many ways. It put Philadelphia in the national (and international) spotlight – increasing our visibility to other companies and showing our viability for other large-scale projects. It also required key stakeholders from various sectors to come together like never before and unite around a shared message and strategy for our city. I am hopeful that we will continue to harness the energy found throughout this process and apply it to future business attraction, retention, and expansion efforts in Philadelphia."
The city also released a partially-redacted version of the proposal it send to Amazon last year. The 108-page document highlighted proposed sites while touting Philly's talent, logistics and livability. It also included financial incentivies, but all but one were redacted.
The city's bid included the creation of a 20-year Tax Increment Financing District that would have shielded the company from property taxes and use and occupancy taxes – an estimated $1.1 billion value.
When Amazon announced its plans to add a second headquarters, the company pledged to invest $5 billion into the new campus, which is expected to rival its current headquarters in Seattle, Washington, which houses more than 40,000 employees across 33 buildings.
The second campus was slated to bring as many as 50,000 high-paying jobs over the next 15 years. The average salary of those jobs is projected to top $100,000.
Now, those jobs will be split across two campuses. One will be within a short drive from the nation's political capitol. The other will be a short drive from the nation's financial capital.
Both are relatively close to – but not in – Philadelphia.
Additionally, Amazon announced it has selected Nashville, Tennessee, to become its new "Operations Center of Excellence." That designation will create more than 5,000 full-time jobs in that city and includes a $230 million investment from Amazon.
To lure Amazon, both New York City and Arlington County shelled out millions of dollars in direct incentives.
New York City will provide Amazon $1.525 billion in incentives over the next 10 years for creating 25,000 jobs. The company also will provide New York City a payment in lieu of property taxes on a portion of the development site. Part of that revenue will fund community infrastructure improvements.
Amazon agreed to donate space for a tech statup incubator to be used by artists and industrial businesses. It also will donate a site for a new public school.
Similarly, Arlington County agreed to provide Amazon $573 million in incentives over the next 15 years for creating 25,000 jobs and boosting hotel revenue.
Amazon agreed to invest $195 million in neighborhood infrastructure improvements, including upgrades to the Crystal City and Potomac Yards Metro stations.
In announcing its selections, Amazon touted the proximity to Midtown Manhattan and downtown Washington. It praised the mass transit access of both locations.
"These two locations will allow us to attract world-class talent that will help us to coninue inventing for customers for years to come," Amazon CEO Jeff Bezos said in a statement. "The team did a great job selecting these sites and we look forward to becoming an even bigger part of these communities."
Amazon pledged to invest $2.5 billion in both locations and cover 4 million square feet of office space in each, with the potential to double that space.
Over the next two decades, Amazon estimated it will spur $10 billion of incremental tax revenue in New York City. In Alrington County, it pegged that number at $3.2 billion.
The announcement concludes a public search that pitted cities across North America against one another, as Amazon attempted to get the best deal possible.
The months-long process began in September 2017, when Amazon announced its intention to add a second headquarters and encouraged municipalities to submit a proposal by mid-October.
Philadelphia officials salivated at the opportunity to land Amazon, an eCommerce behemoth that ranks high on the Fortune 500. And they weren't alone.
Amazon received proposals from 238 municipalities in the United States, Canada and Mexico.
In January, Amazon announced that Philadelphia was among 20 finalists for HQ2. The short list also included Pittsburgh, New York City, Newark, New Jersey and three locations near Washington, D.C.
Philadelphia's proposal touted the city's talent pool, affordability and strategic location along the Northeast corridor. It suggested three potential hosts sites: Schuylkill Yards and UCity Square, both in University City, and the Navy Yard in South Philadelphia.
Mayor Jim Kenney heralded Philly as being in "Goldilocks zone" for Amazon.
"Philadelphia has always been the city of the big shrug," Kenney said in October. "We're in the shadow of New York and Washington – but we're not. We have our own brand. We have our own identity. We have the ability to put our face out there and to win."
Philly officials' push for HQ2 included a website featuring videos and interactive maps highlighting the city's talent, logistics and livability. But city officials kept any financial incentives close to the vest.
"What I've always said is, 'You would want us to be aggressive but not irresponsible,'" Philadelphia Commerce Director Harold Epps said back in January. "Anything that we do will have to be fully vetted at the city and state levels."
After Amazon named a finalist, Philly officials played host to company representatives in March, spending a day and half in the city.
In seeking a second headquarters, Amazon made clear the company wanted to build in a metropolitan area with at least 1 million people. The location needed to have mass transit, proximity to an international airport and the capability to attract top technical talent.