Amazon May End Up With Only One Headquarters — Its Current One

March 16, 2019 by Douglas A. McIntyre

The media has covered the chronicle of how Amazon.com Inc. (NASDAQ: AMZN) divided its new “second headquarters,” which it dubbed HQ2, into two locations in Northern Virginia and the Queens area of New York City. Protests and political maneuvering caused Amazon management to abandon New York despite pleading from some powerful elected officials and business people. Now, there is a threat it will quit Virginia as well. That would leave Amazon with just one headquarters, which is the current one in Seattle.

One of New York’s attractions may have been that it is among the 50 largest cities in the world. Amazon wanted a location that had the infrastructure for building, homes and even an international airport. New York had all those, but that was not enough when local groups and community leaders started aggressive protests.

Amazon has never completely articulated why it needs a second headquarters. The company had expanded several times in Seattle and had substantial office space there in 2017 when it decided to search for a new location. It narrowed the list down to 20 cities in January 2018. On November 18 of last year, it announced its selection.

HQ2 seems an attractive prize. Amazon said it would create 50,000 new jobs. When it picked two locations, that number dropped to 25,000 in each. Between the two cities, Amazon expected to do $5 billion in construction. It got New York to give it approximately $1.525 billion, cash grants of $325 million and other smaller, less specific benefits.

Northern Virginia’s location has started to hit local resistance as well. Most companies would be patient and soldier through the process based on the assumption of final approval. Amazon’s decision in New York shows how little taste it has for the process.

Reuters reports that the Arlington County Board will vote on Amazon tax breaks of $51 million. The news service points out this is total incentives of $481 million the county is expected to give. One group that wants to block the vote is called Our Resolution Arlington. In a story today, Reuters says that Roshan Abraham, one of the group’s leaders, said, “What we are very concerned about is Amazon has met behind close doors, at invitation events, but haven’t met with the community in a public, accessible way.” This echoes community complaints in New York City.

Amazon can easily walk away from Northern Virginia. It has 18 other locations that were finalists. At least none are among the 50 worst cities to live in. That would mean Amazon would need to spend a long time before it could break ground in one of these locations, and much longer to have offices that can be occupied in any large numbers.

For the time being, Amazon has only one headquarters, and that may not change soon.


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