Amazon will split its second headquarters between New York City and Arlington, Va., the e-commerce giant announced on Tuesday, a decision that caps off a yearlong battle between major U.S. cities to house an expected 50,000 employees.
“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come,” Chief Executive Officer Jeff Bezos said in a statement.
The sites in New York and Virginia will each house 25,000 employees, and hiring will begin in 2019, Amazon said in a statement. The company also plans to add 5,000 jobs in a Nashville operations center.
Ultimately, Amazon putting half of the proposed facility in Long Island City, in the New York borough of Queens, and half in Crystal City, in the southeast corner of Virginia’s Arlington County, “is probably going to be better for each one,” said Eric Schiffer of the Orange County, Calif.-based private equity firm Patriarch, who has followed the company’s plans.
The sites will give Amazon access to robust talent pools and proximity to international airports, two of its key requirements outlined last year. The Virginia site will be in National Landing, a newly branded neighborhood that also encompasses parts of Pentagon City and Potomac Yard. The company will invest about $2.5 billion to set up its operations there and occupy about 4 million square feet with the option of doubling that over the next dozen years, according to county officials.
“The strength of our workforce coupled with our proximity to the nation’s capital makes us an attractive business location,” said Arlington County Board Chair Katie Cristol. “But Arlington’s real strength is the decades of planning that have produced one of the most vibrant, civically engaged communities in the world. Those plans have paved the way for this investment.”
The move will give the Seattle-based company easier access to elected officials at a time when it’s under increasing scrutiny in D.C. President Trump previously claimed the U.S. Postal Service is unfairly subsidizing Amazon’s package deliveries, and he has attacked both Bezos and the Washington Post, which the billionaire owns.
In New York, some of the 12,000 apartments added in Long Island City since 2010 might be absorbed by Amazon’s workforce, said Janine Yorio, CEO of New York-based Compound Asset Management, which creates real estate investment funds.
Amazon’s arrival also might signal an end to a recent dip in the city’s housing market, which is known for shorter troughs than other areas, she said.
[Read more: Alexandria Ocasio-Cortez warns Amazon HQ2 could worsen housing crisis in New York, DC]
Younger workers are most likely to choose areas such as Long Island City itself, a flourishing region on the edge of the East River and close to midtown Manhattan, as well as neighborhoods like Dutch Kills and the Brooklyn community of Williamsburg, which is temporarily losing its subway to Manhattan to repairs.
Executives might opt for nearby suburbs such as Westchester County and Fairfield, Conn. New York Gov. Andrew Cuomo didn’t immediately respond to a request for comment.
Critics claim that Amazon’s public contest for its second headquarters was merely a ploy to pit cities against each other and obtain the most lucrative tax breaks possible, but that’s unlikely to deter them from fighting vigorously the next time a major company dangles such a lure.
With the Amazon competition, “they still gained some empathy and compassion, and I think, goodwill, for having been valiant in their efforts, Schiffer said. “Political figures are not going to back down from their efforts next time around. They’ll just be more steeled for what could be a curveball.”
In New York, Amazon is slated to receive $1.5 billion in performance-based incentives, including a $1.2 billion refundable tax credit. The tech giant will also receive $573 million in incentives from Virginia, including a $550 million workforce grant, and $102 million from Tennessee.
“Virginia put together a proposal for Amazon that we believe represents a new model of economic development for the 21st century,” Democratic Gov. Ralph Northam said in a statement. “The majority of Virginia’s partnership proposal consists of investments in our education and transportation infrastructure.”
Amazon’s stock fell slightly to $1,623.99 per share in New York trading on Tuesday. The company reported $56.6 billion in sales in the third quarter, while profit rose sharply to $2.8 billion.
