Amazon has made it official.
On Tuesday, the e-commerce retail giant announced the location of two new headquarters—one in New York City and the other in Arlington, Virginia. It also announced a new fulfillment hub in Nashville, Tennessee.
The new headquarters are important because it means big money for the towns in question—and big tax breaks for Amazon. It also poses questions about whether the new cities have the infrastructure to handle the influx of new workers.
Here are the details:
- Amazon will add 50,000 new jobs split between the two headquarters.
- It also plans to invest about $5 billion in building its new facilities.
- The average wage for workers will be about $150,000, according to the release.
- Nashville will get about 5,000 new jobs and $230 million in investment from Amazon for its new facilities.
- In exchange for the economic benefits the cities will receive, Amazon will get more than $2 billion in tax subsidies, which will offset building and salary costs.
Why is this important for Amazon
Amazon needs the new headquarters as it expands into software development, connected home devices, entertainment, health care, groceries, and cloud storage, according to reports.
The tax breaks will lower costs for Amazon as it grows, offsetting the costs for salaries and new building expenses.
Amazon already competes with software company Microsoft for space and talent in Seattle.
What are critics saying?
The subsidies Amazon will receive will come from city and state tax revenues, and will benefit one of the biggest public companies in the U.S., which some critics argue doesn’t need financial help. Additionally, opponents of the new headquarters reportedly say the presence of Amazon could potentially make local housing costs less affordable in its new headquarter cities and cause traffic issues.
In September 2017, Amazon announced it was embarking on a search for a North American city, where it could build a new office park that would serve as a second headquarters, in addition to the company’s base in Seattle, Washington.
Initially, 238 cities submitted bids for consideration. Austin, Philadelphia, and Los Angeles had also been in the running, among others.