To Washington, D.C., Mayor Muriel Bowser, the ideal location for Amazon.com’s second headquarters is a no-brainer.
It’s also predictable, since it’s the city she happens to lead, a fact highlighted in the district’s #ObviouslyDC social media campaign. While the tech giant’s CEO, Jeff Bezos, might not be completely convinced yet, the fact that he included the city — as well as two locations in the surrounding metropolitan area — on a list announced Thursday of the top 20 potential sites, suggests that he’s interested in the region.
The finalists represent a little less than 10 percent of the 238 contestants who vied for the offices, where Seattle-based Amazon expects to invest as much as $5 billion and house a workforce amounting to about a tenth of its current payroll of 540,000. Construction and operation of the site will bring thousands of additional jobs to the area and tens of billions of dollars in related investment, Amazon estimated.
“It would be a win for our residents and the region to bring 50,000 high-paying jobs to our city,” Bowser said in a statement afterward. “Making this list reaffirms what we already knew going into the bid process — Washington, D.C., is no longer a one-company government town, we are a leader in innovation and tech, brimming with top talent.”
Montgomery County, Md., to the north and northern Virginia, to the district’s south, also made the cut, and they have fierce competition around the country, including Boston, where digital manufacturer General Electric moved its headquarters two years ago to lure tech talent; and New York City, which brands its tech-startup sector as Silicon Alley. A representative of Prince George’s County, Md., which also submitted a proposal, wasn’t immediately available to comment.
“All the proposals showed tremendous enthusiasm and creativity,” Holly Sullivan, head of public policy for Amazon, said in a statement. “Through this process, we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”
Virginia Gov. Ralph Northam said in a statement that his office would continue to work with communities in northern Virginia, but declined to specify any incentives, including tax breaks, the state might offer because they reflect negotiating positions on contracts and strategies for attracting businesses in the future.
Since Montgomery was the only county to make the short list, winning a spot is “a real honor,” County Executive Ike Leggett said in a statement. “Our initial proposal made an extremely strong case,” he added, “and I look forward to working with Amazon to bring jobs and investment to the county.”
Amazon’s founder has already invested heavily in the Washington, D.C., region, in fact, purchasing the Washington Post from the Graham family in 2013 and the city’s largest residence for $23 million three years later.
The decision he’s making now will ultimately be much more significant for the area he selects than for the company’s investors, said Tuna Amobi, an analyst with CFRA Research in New York.
“Amazon is one of those companies you always want to pull out all of the stops to win over, but they’re a pretty hard-nosed negotiator,” he told the Washington Examiner. “There are probably going to be a lot of sacrifices, and there may be some political decisions to navigate that complicate the situation for a number of cities.”
As for the company, while putting a headquarters in Washington, D.C., might increase executives’ face time with policymakers, an edge for a business that has been a frequent target of President Trump’s Twitter barbs, simply having offices in the area accomplishes much the same thing, and Amazon does.
Its U.S. public policy team is headquartered here, along with part of its web services group.
“How big a difference, to the outside world, is a headquarters versus a large office?” asked Simeon Siegel, an analyst with Nomura Instinet who follows the company.
A more important consideration for Amazon might be attracting and maintaining a high-caliber workforce as it builds on revenue that analysts project may have grown from $136 billion in 2016 to as much as $177 billion last year.
“Despite the rhetoric about the growth of artificial intelligence, labor still remains one of the most important aspects of the business,” Siegel told the Washington Examiner. “The notion of having one area where employees are forced to live is very much out of touch with the notion of remoting in, mobile workforces and the general view of more flexibility.”
Additionally, Amazon and companies like it are growing in a multitude of directions at once, and might take a cue from business conglomerate General Electric, which dates to the 19th century and has plants and offices around the world. Such diversity enables executives to keep in close contact with constituents from institutional investors and analysts to global policymakers.
“There are companies that are a very successful amalgamation of many things that don’t have to be under the same roof,” Siegel noted. “They have nothing to do with each other.”
