Dive Brief:
- In a surprise move, Amazon reportedly plans to split its second headquarters (HQ2) between sites in Arlington County, VA and New York City, according to multiple media outlets.
- The Wall Street Journal first reported the e-commerce giant will split its workforce with 25,000 employees in Arlington's Crystal City neighborhood, while The New York Times reported the split would occur with the Long Island City neighborhood of Queens.
- The company, elected officials in both localities and other stakeholders declined to comment to the outlets. The Journal said a final decision could be announced as early as this week.
Dive Insight:
Just days after word spread that three cities were in "late-stage" talks to win the much-anticipated HQ2, this latest news has sent shockwaves, and has already led some media outlets to declare the months-long process to pick a second headquarters a "massive sham." In an opinion piece for Business Insider, senior reporter Dennis Green criticized Amazon for being dishonest, and for pitting municipalities and states against each other with incentive packages, only to pull the rug out from under them at the last moment. "If Amazon is able to get away with essentially robbing Virginia and New York of millions in tax revenue and not even offering up in return what they originally promised, what else are they capable of?" Green wrote.
Reports suggest the split comes with Amazon wanting to make it easier to recruit talent in the technology sector. Both cities have an educated workforce and have reputations as growing tech hubs, while they are already home to company employees in other roles. The Times notes that about 1,800 people work in advertising, fashion and publishing for the company in New York, while Amazon has 2,500 people in technical and corporate roles in Northern Virginia and Washington, DC.
Having fewer employees descend on a city could ease the strain on infrastructure, including traffic, public transit and housing, which have all been squeezed in the DC and New York City regions. The Seattle Times reported the company is "wary" of a repeat of what has happened in Seattle, where its main headquarters is located, and has been blamed for a growing homelessness crisis and a lack of affordable housing. Seattle attempted to institute a head tax on businesses to pay for homelessness mitigation programs, but after pressure from Amazon and others, backed down.
But the reported split has left some locals unconvinced the impacts will be lessened. In a Medium post, Long Island City-based writer Nick Kolakowski said the troubled subway system would likely creak under the strain from the influx of Amazon employees, and he bemoaned that in recent years, developers have decided to make it what he described as a "hot" neighborhood and filled it with upscale housing and retail.
"As Amazon likes to say, HQ2 will spur a lot of economic development," Kolakowski wrote. "Unless managed carefully, however, that development could prove too much for a neighborhood already wrestling with growth, transportation, and other issues."
Amazon had been expected to make its final announcement on HQ2 before the end of the year, having drawn out speculation and anticipation among each of the 20 finalists. But GeekWire notes that, as reports on HQ2's location continue to leak, the company could move its timeline up, especially with the busy holiday period fast-approaching and the mid-term elections almost over.
