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EconomicsMarket UpdateNewsParcelTechnology

Not win nor place, but Nashville a show in race for new Amazon locations

Gulch Night Market in Nashville (Photo: Facebook)

New York City and Arlington the big winners, of course, but Music City will house e-retailer’s operations center for the eastern U.S.

Amazon (Nasdaq: AMZN) announced the long-awaited decision on the location, or rather, locations of its new headquarters with the pre-tipped winners of New York City and Arlington, Virginia being made official.

But Nashville was the dark horse in a bid to house an operations center for the eastern U.S.

All told, Amazon says it will invest $5.23 billion in the new headquarters and operations center, with total estimated new headcount of 55,000 in all three locations. In return, the cities and states involved will give Amazon $2.2 billion in various tax credits and grants over various time spans.

The two headquarter sites, the company’s first outside of Seattle, were chosen “to attract world-class talent that will help us to continue inventing for customers for years to come,” said chief executive Jeff Bezos.

The world’s largest ecommerce retailer plans to start hiring for the various locations by next year. The incentives it is receiving are based on the company paying average wages of over $150,000 in each of the three cities.

Each of the headquarters locations in Long Island City, Queens and the Crystal City area of Arlington are slated to be 4 million square feet with the opportunities to double the foot print over the coming years. Each site is expected to employ 25,000 people.

The headquarters selection process was of course highly competitive with cities and states throwing in incentives to attract the new jobs. Amazon said  “economic incentives were one factor” in the decision to pick the sites, “but attracting top talent was the leading driver.

 (Source: Amazon)
(Source: Amazon)

New York offered $1.525 billion in incentives coming over the next decade through refundable state tax credits for each job created.

Amazon will also apply for New York City-specific grants aimed at relocating jobs to the outer borough communities and property tax abatements for capital improvements on office space.

With the new headquarters butting up against one of the largest housing projects in the city, Amazon also agreed to spend a portion of its property tax on community projects, such as a startup incubator, green spaces and a new school.

New York Governor Andrew Cuomo said that Amazon made the move because it “understands that New York has everything the company needs to continue its growth.”

The Commonwealth of Virginia and Arlington will contribute $573 million in incentives. The Commonwealth is providing the largest chunk based on grants for the number of jobs created, while Arlington’s grant will be based on the growth of its hotel occupancy tax.

“Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century, and I’m excited to say that our innovative approach was successful,” said Virginia Governor Ralph Northam.

The Nashville location, just north of the Gulch, will handle customer fulfillment, customer service, transportation and supply chain. The site will have 1 million square feet of space to house 5,000 employees. In return, Amazon was given some $102 million in various state and city grants and credits.

“We want to thank Amazon for its continued investment in the state of Tennessee and are excited about the additional 5,000 corporate jobs they will be creating in Nashville,” said Tennessee Governor Bill Haslam.

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Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.
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