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Money News

Amazon’s New HQ May be Coming to a Town Near You

January 18, 2018

  • Amazon announced 20 finalist cities for its new headquarters
  • The HQ could mean 50,000 new jobs and billions of dollars of revenue for the city
  • Amazon is likely to get sizable tax breaks wherever it builds
3 min read

Amazon is looking to invest in some prime real estate–and it may even be coming to your hometown.

The e-commerce giant released a list of cities on Thursday that are finalists for its new corporate headquarters.

New York made the cut. So did Los Angeles, and Austin. You can also add Columbus, Ohio, and Toronto, Ontario to cities that may soon be getting a big boost to their economies when the e-commerce giant moves in.

Search for a new HQ

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.

It’s a big deal for any city that might wind up hosting Amazon. Here’s why:

“We expect [the second headquarters] to be a full equal to our Seattle headquarters,” Jeff Bezos, Amazon founder and chief executive said in a statement in September, when the search kicked off. “Amazon HQ2 will bring billions of dollars in upfront and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”

Cities in the running

Amazon has only looked at cities with 1 million or more inhabitants, and ones that have strong business-friendly environments, as well as urban and suburban environments that can attract strong talent, according to the company.

Here’s Amazon’s list of finalists:

Why does Amazon need a second headquarters?

Amazon has never been entirely clear about why it needs a second headquarters, according to reports. But it has a stated goal of developing its technological capabilities, while shortening delivery times.

By setting up in a new locale, it can potentially tap new tech talent and create more geographic demand, according to some experts.

Not in our backyard?

There are some downsides. Amazon is likely to get billions of dollars in tax breaks for locating and building a headquarters in a new city. So, in essence, whichever city wins the bid could be paying to acquire Amazon’s presence. (Once the headquarters is built and Amazon is situated in that city, it’s likely to add substantially to the local tax base. The company is reportedly Seattle’s biggest taxpayer, for example.)

“We expect [the second headquarters] to be a full equal to our Seattle headquarters,” Jeff Bezos, Amazon founder and chief executive said.

Other critics of the e-retailing giant say that its presence has had a negative impact on Seattle, by making it a more expensive place to live, and by destroying its small-town charm. The new city could experience similar changes with a dominant Amazon presence.

What comes next

Amazon says it will take a deeper dive into the proposals submitted by each of the 20 cities. It will then choose one later in 2018.

More about Amazon

Amazon, one of the most powerful tech companies globally, has an influence felt far and wide. In addition to pioneering online shopping with door to door delivery of packages, the company is one of the biggest providers of cloud computing services.

Millions of small businesses sell goods and services on the company’s platform. In recent years, Amazon has also branched out into streaming video entertainment through its Prime service, and more recently groceries, via its purchase of high-end grocery store Whole Foods.

The company is known for technology innovations including its home assistant Alexa, as well as drone deliveries.

Other fast facts:

 

 

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

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