Amazon.com Inc. (NASDAQ: AMZN) founder Jeff Bezos said his company will announce the location of its second headquarters by the end of the year. Cities have been aggressively vying for it, as it is supposed to create tens of thousands of jobs.
Residents and businesses in some cities believe the move would be a mixed blessing because Amazon would receive huge tax credits and would put a strain on infrastructure and raise real estate prices. Nevertheless, a city will get to test those theories well into 2019 and 2020 when the location actually will be built.
According to CNBC:
“The answer is very simple,” Bezos told David Rubenstein, the president of the Economic Club of Washington D.C. and the cofounder of the Carlyle Group. “We will answer the decision before the end of the year.”
The reason to create a second headquarters has always been fuzzy. Almost certainly no other large U.S. company has a second headquarters. One is enough to hold senior staff and perhaps a large part of operations. Amazon’s headquarters is in Seattle, where it has tens of thousands of square feet of space. Any other location, for any other company, would be a place to put a factory, distribution center or home for a division. Bezos does not think that is enough.
Amazon launched its quest to find a second headquarters on September 7, 2017. The company’s management wrote:
Amazon today announced plans to open Amazon HQ2, a second company headquarters in North America. Amazon expects to invest over $5 billion in construction and grow this second headquarters to include as many as 50,000 high-paying jobs. In addition to Amazon’s direct hiring and investment, construction and ongoing operation of Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community.
It added that it had some “preferences” for the location:
- Metropolitan areas with more than one million people
- A stable and business-friendly environment
- Urban or suburban locations with the potential to attract and retain strong technical talent
- Communities that think big and creatively when considering locations and real estate options
The winning city will get the spoils, and the burden that goes with them.