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Amazon HQ2

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Adapted from the English Wikipedia article Amazon HQ2, available under CC BY-SA 4.0Updated 9 August 202544 sources
Amazon HQ2
Company typeCorporate headquarters complex
IndustryTechnology
FoundedJune 2023; 3 years ago (2023-06)
Headquarters
Arlington County, Virginia
,
United States
Area served
Washington, D.C. metropolitan area
ProductsCorporate office space
Number of employees
14000 (2023)

Amazon HQ2 Overview

Amazon HQ2 serves as the expanded corporate headquarters for Amazon, situated in National Landing, within Pentagon City, Virginia, a sector of Arlington County in the Washington, D.C. metropolitan region. This development complements the company’s original headquarters in Seattle, Washington. The initial phase, designed to accommodate up to 14,000 employees, commenced operations in June 2023.[1] However, construction on the second phase has been postponed indefinitely with no established timeline.[2]

The announcement of HQ2 occurred in September 2017 when Amazon issued request for proposals to various governments and economic development agencies, seeking tax break incentives and other benefits to attract the project. Amazon revealed plans to invest approximately $5 billion into construction, aiming for a workforce of 50,000 employees upon completion.[3] Over 200 municipalities across Canada, Mexico, and the United States submitted proposals offering a combination of tax incentives, expedited permits, infrastructure enhancements, crime reduction initiatives, and additional inducements. On January 18, 2018, Amazon released a shortlist featuring 20 finalist locations,[4] prompting these contenders to further refine their incentive offers.

On November 13, 2018, Amazon declared that HQ2 would be divided between two sites, each planned to accommodate roughly 25,000 employees: one in National Landing within Arlington County, Virginia, and another in Long Island City, part of Queens, New York City.[5] Virginia committed up to $750 million in public subsidies.[6] Meanwhile, New York offered tax incentives totaling at least $1.525 billion alongside $325 million in cash grants and other benefits.[7] In February 2019, Amazon withdrew its plans for the New York location following significant opposition from local activists, residents, and elected officials.[8][9] The initiative has faced criticism as an example of corporate welfare.

Despite initial projections emphasizing job creation and economic growth spurred by Amazon HQ2, its anticipated economic benefits have been undermined by challenges linked to the COVID-19 pandemic.[6]

Background

Construction of a portion of Amazon's Seattle headquarters in 2015

Established in 1994 in Bellevue, Washington, Amazon initially rented office space within Seattle's SoDo district. As the business expanded, it relocated multiple times within Downtown Seattle before committing to a custom-designed headquarters campus situated in the South Lake Union area—a neighborhood that was transitioning from a light industrial zone to an urban redevelopment site.[10] By October 2017, Amazon occupied approximately 8.1 million square feet (750,000 m2) across 33 buildings in Seattle and employed around 40,000 white-collar professionals.[11]

Request for proposal

Amazon's request for proposal specified several essential criteria alongside optional qualities.[12]

  • Located in metropolitan regions with populations exceeding 1 million
  • Situated within 30 miles (48 km) of a major population hub
  • Within a 45-minute travel radius to an international airport
  • Close proximity—between 1–3 miles (1.6–4.8 km)—to principal highways and arterial roads
  • Availability of mass transit connections
  • Capacity for up to 8 million square feet (740,000 m2) of office space to accommodate future growth

Preferred but not mandatory features included airports offering nonstop flights to Seattle, New York City, San Francisco, and Washington, D.C., urban settings, and closeness to prominent universities.[13]

The submission deadline for Phase I proposals was October 19, 2017.[14] The final selection of the site was scheduled for announcement in November 2018, following a shortlist of 20 candidate cities published in January.[4][12][15]

Submitted

By the deadline of October 23, 2017, Amazon had received a total of 238 proposals from various cities and regions spanning 54 states, provinces, districts, and territories. Submissions came from municipalities in every U.S. state except Arkansas, Hawaii, Iowa, Montana, North Dakota, South Dakota, Vermont, and Wyoming. Similarly, no bids were submitted from the Canadian provinces of New Brunswick and Saskatchewan or from the Yukon Territory.

During early to mid-October, both Little Rock, Arkansas and San Antonio, Texas decided to withdraw their proposals. Little Rock notably placed a full-page advertisement in The Washington Post explaining their withdrawal as a mutual decision while highlighting the city's strengths. Shortly after the submission deadline passed, a plane carrying a banner with the same message was flown over Seattle as part of their campaign.

Forecasts for Potential Winning Cities

According to an analysis by Moody's Analytics, Austin, Texas emerged as the top contender based on Amazon's selection criteria, with Atlanta, Philadelphia, and Rochester, New York following closely behind. As detailed in Amazon Unbound, Philadelphia's bid was reportedly hindered due to the city's NFL team, the Philadelphia Eagles, being a rival to Jeff Bezos's preferred team, the New York Giants. An evaluation by The New York Times identified Denver as the leading candidate according to Amazon’s factors, with Boston and Washington, D.C. also ranking highly. In the realm of betting, Irish bookmaker Paddy Power initially positioned Atlanta as the frontrunner for HQ2 with 2-to-1 odds; however, by January 2018, both Atlanta and Austin were equally favored, each holding 3-to-1 odds of securing Amazon's second headquarters.

Promotional campaigns

Various municipalities and organizations launched promotional efforts and creative stunts to support their HQ2 proposals, often including unique offers and gifts aimed at Amazon. For instance, Sun Corridor, an economic development organization based in Tucson, Arizona, attempted to highlight the city’s candidacy by sending a towering 21-foot saguaro cactus to Amazon. Due to the company's corporate gifting rules, the cactus was declined and subsequently donated to the Arizona-Sonora Desert Museum. The suburb of Stonecrest, Georgia, located near Atlanta, took the unusual step of voting to de-annex approximately 345 acres so that Amazon could create its own municipality named Amazon surrounding its future headquarters.

In Kansas City, Missouri, Mayor Sly James purchased a thousand items from Amazon and donated them to charitable causes. He also authored five-star reviews for each product, incorporating positive remarks about Kansas City within each review. Meanwhile, Primanti Brothers, a well-known sandwich chain from Pittsburgh, pledged free sandwiches for Amazon employees if the company selected the city for its second headquarters.

Birmingham, Alabama made a visual statement by installing large replicas of Amazon boxes and dash buttons in public spaces. These dash buttons were programmed to send out automated tweets encouraging Amazon to choose Birmingham. In New York City, Mayor Bill de Blasio declared that prominent landmarks would be illuminated in orange as part of the city’s HQ2 promotional campaign.

A group from Calgary took their message directly to Seattle’s South Lake Union neighborhood by spray-painting slogans on sidewalks urging Amazon to pick Calgary. During an Ottawa Senators hockey game, spectators were motivated to vocally support Ottawa’s bid for the new headquarters.

The neighboring cities of Detroit, Michigan and Windsor, Ontario collaborated on a joint proposal, promoting themselves as a unified option for Amazon’s campus. Splitting the headquarters across the Canada–United States border would enable Amazon to benefit from tax incentives provided by both Ontario and Michigan. Additionally, the company could leverage Canada’s more flexible immigration policies along with favorable currency exchange rates associated with the Canadian dollar.

Criticism and opposition

Steven Strauss, a visiting public policy professor at Princeton University and a specialist in economic development, cautioned in a USA Today editorial that metropolitan regions should exercise prudence when offering incentives to secure Amazon's headquarters. He cited instances where firms either went bankrupt or failed to fulfill expansion commitments. Strauss also highlighted the risk of cities falling victim to the "winner's curse" by extending excessively generous incentive packages, which could ultimately result in financial losses if the anticipated employment opportunities do not come to fruition.

Both conservative and progressive advocacy organizations expressed their disapproval of the various tax breaks proposed by municipalities aiming to attract Amazon.

In early 2018, Scott Galloway, a professor at New York University Stern School of Business, argued that Amazon was soliciting proposals from locations it had no genuine intention of relocating to, primarily to leverage tax incentives. He forecasted that HQ2 would be established either in the New York metropolitan area or the Washington metropolitan area. With Amazon’s ultimate decision to split the headquarters between two sites, Galloway accurately predicted both choices. He repeatedly described the bidding process as a "ruse" and a "con," asserting that "the game was over before it started," given the obvious advantage of proximity to both Jeff Bezos’ residence and the United States Capital favoring the DC area.

Following Amazon’s announcement, former Seattle Mayor Ed Murray declared plans to engage with the company regarding long-term city strategies. Meanwhile, the Seattle Metropolitan Chamber of Commerce viewed the news as a "wake-up call" for Seattle to enhance its business environment. Comparisons were drawn between this situation and Boeing's unexpected 2001 decision to relocate its headquarters from Seattle to Chicago.

Jim Balsillie expressed disappointment with W. Edmund Clark, who led Ontario Premier Kathleen Wynne’s Toronto bid efforts in 2017. Clark promoted Toronto’s "competitive advantage" by emphasizing software developers whose salaries were 34% to 38% lower than those in the United States—a tactic Balsillie criticized as "misguided," arguing it forced Canadian tech workers into a global race to the bottom against wage levels in countries like Poland, Ukraine, and India.

Concerns were also raised that HQ2 could impose a "prosperity bomb" on the communities selected, potentially overwhelming local infrastructure and resources.

Finalists

Amazon HQ2 final 20 cities

On January 18, 2018, Amazon revealed its list of 20 finalist locations competing in the HQ2 selection process. The majority of these contenders are concentrated along the U.S. East Coast and in the Midwest, with Los Angeles standing as the sole representative from the West Coast and Toronto as the only candidate outside the United States.

Several finalist cities leveraged their Amazon proposals to attract additional multinational corporate investments.

Beginning in late February 2018, Amazon officials commenced visits to these finalist cities. Throughout the bidding period, participating cities entered into non-disclosure agreements with Amazon. However, these agreements did not restrict public disclosure of financial incentives offered by the cities. By May 2018, Amazon’s team had completed site visits to all 20 finalists. In September 2018, Jeff Bezos committed to announcing a decision before year-end.

On November 4, 2018, reports from The Washington Post and The Wall Street Journal indicated that multiple finalists were engaged in advanced discussions with Amazon regarding HQ2 selection. Among these was Northern Virginia’s Crystal City area as a leading candidate. Amazon’s Director of Economic Development Mike Grella responded on Twitter condemning the leak of this information as a breach of the non-disclosure agreement. He also criticized media speculation about the winning location based on CEO Jeff Bezos's travel patterns—Bezos being owner of The Washington Post. Subsequent coverage confirmed plans for Amazon to split HQ2 between two locations.

Winning bids

On November 13, 2018, Amazon officially announced New York City and Northern Virginia as the locations for its HQ2 campuses. In a coordinated statement from the Northern Virginia contenders, it was revealed that the HQ2 area would be rebranded as "National Landing", a district that includes Crystal City along with neighboring Pentagon City and Potomac Yard. Additionally, Amazon declared plans to hire 5,000 employees at a new Operations Center of Excellence situated in Nashville, Tennessee.

Long Island City

Long Island City, Queens, New York City, canceled second location of Amazon HQ2

The financial incentives proposed for Amazon in New York consisted of performance-driven direct subsidies totaling $1.525 billion, contingent upon the creation of 25,000 jobs. This package featured a refundable tax credit under the state's Excelsior Program amounting to as much as $1.2 billion, calculated as a proportion of projected employee wages over a decade. Moreover, the Empire State Development Corporation committed to providing a $325 million cash grant linked to the occupancy rates of HQ2 facilities over the next ten years. According to an agreement with New York City's administration, half of the property taxes on the HQ2 site would be waived; instead, this exempted amount would be funneled into the city's PILOT (payment in lieu of taxes) fund to finance infrastructure enhancements across the city. Both New York and Virginia proposed granting Amazon access to a helipad, while New York state also pledged infrastructure improvements aligned with HQ2's development. Local officials projected that Amazon's relocation could generate approximately $27 billion in tax revenue for both city and state.

Amazon's decision to select New York City for one of its headquarters was influenced by the city's abundant skilled workforce, established technology, finance, and media sectors, as well as its robust university network that includes institutions such as Columbia University and Cornell Tech.

Termination of New York segment

Following the announcement of Amazon’s HQ2 campus in New York City, several representatives from Queens—including U.S. Representative-elect Alexandria Ocasio-Cortez, Councilman Jimmy Van Bramer, State Senator Michael Gianaris, and Assemblyman Ron Kim—voiced their opposition. Ocasio-Cortez, Van Bramer, and Gianaris highlighted concerns regarding substantial tax breaks granted to Amazon amid the decline of essential infrastructure like the New York City Subway, alongside persistent underfunding of the New York City public school system and the New York City Health Department. Additionally, Ocasio-Cortez expressed apprehension on Twitter about rising housing costs in Queens, triggered by speculation surrounding the HQ2 project.[16] Kim, together with Fordham University professor Zephyr Teachout, authored an editorial in The New York Times arguing against offering incentives to "an internet giant known for squashing small businesses."[17]

According to a report by Politico, the Long Island City site designated for HQ2 was originally planned for 6,000 residential units, including 1,500 designated as affordable housing.[18] Senator Gianaris remarked that further details about the deal only worsened its perception.[19] Nevertheless, public opinion polls indicated that most New York City residents supported Amazon’s proposal.[20][21]

On February 14, 2019, Amazon declared it would abandon its Long Island City campus plans due to local resistance.[22] The company confirmed it would proceed with developments in Crystal City and Nashville.[23] Both Mayor Bill de Blasio and Governor Andrew Cuomo were reportedly caught off guard when Amazon Vice President Jay Carney informed them of the decision.[24] Cuomo attributed the cancellation to opposition from Democrats within the New York State Senate, while de Blasio criticized Amazon for "throwing away that opportunity."[25][26] In response, Ocasio-Cortez commented that the $3 billion in incentives could have been directly invested in local improvements such as hiring educators and repairing transit systems.[27][28][29] Activist groups like Open New York advocated for reinstating the original housing development plans following Amazon’s withdrawal.[30]

In the aftermath of Amazon’s exit, Governor Cuomo engaged in multiple conversations with Amazon executives, including Jeff Bezos, personally urging reconsideration and pledging full state support. The Partnership for New York City published an open letter in The New York Times affirming Cuomo’s commitment to securing state approval for the project. Signatories included prominent figures such as Hakeem Jeffries, Carolyn Maloney, Andrew D. Hamilton, David M. Solomon, David N. Dinkins, and Ajay Banga.[31]

In an interview with CNBC, Amazon’s vice president of public policy Brian Huseman denied that political factors influenced the decision to cancel the New York location, attributing it instead to logistical considerations.[32]

Although Amazon withdrew from Long Island City, in December 2019 it announced a lease agreement for 335,000 square feet (31,100 m2) of office space in Manhattan’s Hudson Yards area to house approximately 1,500 employees. The company already employed around 3,500 technology workers in the New York metropolitan region.[33]

Governor Cuomo described the cancellation as the "greatest tragedy" during his tenure leading New York State.[34][35]

Northern Virginia

1770 Crystal Drive undergoing renovation

Amazon chose a site in Northern Virginia for its HQ2, covering sections of the Crystal City and Pentagon City neighborhoods within Arlington County, as well as the Potomac Yard area in the city of Alexandria. This combined region was marketed under the name "National Landing". Although redevelopment initiatives had been underway since 2014, the designation "National Landing" was introduced in 2018 as part of coordinated economic development strategies aimed at attracting Amazon's second headquarters. The announcement also included plans to establish a satellite graduate campus of Virginia Tech nearby. The "National Landing" name partially reflects the area's close proximity to Ronald Reagan Washington National Airport.

Transportation infrastructure in the region features the Washington Metro's Crystal City station and the recently inaugurated Potomac Yard station. The Virginia Railway Express (VRE) commuter rail also serves the area through its Crystal City station. Additionally, the Metroway, a bus rapid transit line with 15 stops, connects Arlington's Pentagon City station to Alexandria's Braddock Road station, some segments operating within dedicated bus lanes. Efforts are underway to construct a pedestrian bridge linking National Landing to Reagan National Airport, alongside enhancements to existing Metro stations.

(left to right) Senator Tim Kaine, Energy Secretary Granholm, AWS CEO Matt Garman, Senator Warner, and Governor Youngkin at the HQ in October 2024

Virginia proposed performance-based incentives that included a $550 million workforce grant targeting the first 25,000 jobs Amazon would create by 2030, with an average salary of $150,000. An additional $200 million was pledged for up to 12,850 qualifying positions expected by 2034. Arlington County contributed approximately $23 million in cash incentives distributed over 15 years, contingent upon Amazon achieving certain office space thresholds and incremental revenue from hotel taxes within the county. Infrastructure improvements valued around $28 million were also planned, funded through property taxes from Pentagon City and Crystal City. The Virginia Economic Development Partnership indicated that the initial incentive package approached $1 billion; however, after Amazon indicated it would allocate half of the jobs to Virginia, officials reduced the incentives by roughly 50%.

Initially, Amazon suggested it might utilize as much as 8 million square feet of office space in Arlington over a 15-year timeframe. By May 2019, company representatives informed Arlington officials that they could not commit beyond 4 million square feet.

Development

Phase 1: Metropolitan Park

File:Queen City Installation 2192023.jpg
The "Queen City" art piece located within Metropolitan Park

Amazon initially relocated its workforce into leased office spaces in the vicinity in June 2019. By June 2020, the company reported approximately 1,000 employees designated as HQ2 staff.[36][37]

The architectural design was spearheaded by ZGF Architects, collaborating with James Corner Field Operations, VIKA Civil Engineering and Site Design, among others.[38] Construction commenced in January 2020 on two 22-story buildings at 1450 S. Eads St, near Metropolitan Park, through developer JBG Smith.[39][40] In September 2020, Amazon initiated a $14 million refurbishment project for the park.[41] By March 2023, the workforce at the initial HQ2 phase reached 8,000 employees, with the facility designed to accommodate up to 14,000.[2]

Leases were signed by an independent coffee retailer and a pet care service to occupy commercial space within the development.[42][43]

A public artwork titled "Queen City," created by artist Nekisha Durrett, is featured prominently within Metropolitan Park.[44] This installation honors a historic Black neighborhood named Queen City that was razed during the development of The Pentagon.

Phase 2: PenPlace and The Helix

On February 2, 2021, the firm revealed a proposed blueprint for the second segment of HQ2, known as PenPlace, which is set to be developed by JBG Smith. This project features "The Helix," an artistic installation standing 354 feet tall, crafted from glass and inspired by the structure of a nucleic acid double helix, surrounded by landscaped grounds accessible to the public. This concept draws parallels to the "Amazon Spheres" located at Doppler in Seattle.Jeff Bezos, the founder, remarked that "The natural beauty of a double helix can be seen throughout our world, from the geometry of our own DNA to the elemental form of galaxies, weather patterns, pine cones, and seashells".The Verge characterized it as resembling a "glass poop emoji covered in trees."

On November 26, 2021, the Federal Aviation Administration (FAA) completed its assessment of the proposed structure and concluded that it would not pose any danger to air traffic operating near Ronald Reagan Washington National Airport.

In April 2022, the Arlington County Board gave its approval for phase two of the development, which includes "The Helix."

However, in March 2023, the company announced a postponement in advancing the second phase of HQ2.

References

  1. ↑ "Amazon's HQ2 officially opens in Arlington, Va". WTOP News. June 15, 2023. Retrieved August 5, 2023.
  2. ↑ 2.0 2.1 Kim, Sarah Y. (March 3, 2023). "Amazon Is Pausing Construction On Pentagon City Campus". WAMU. Archived from the original on March 4, 2023. Retrieved March 4, 2023.
  3. ↑ "Amazon HQ2". Amazon.com. September 2017. Retrieved September 20, 2017.
  4. ↑ 4.0 4.1 Cite error: Invalid <ref> tag; no text was provided for refs named NYTimes-Finalists
  5. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named picks
  6. ↑ 6.0 6.1 "Amazon HQ2 was supposed to add jobs last year. It shed them instead". The Washington Post. 2024.
  7. ↑ "Amazon HQ2: Breaking down the tax breaks". Associated Press. November 13, 2018.
  8. ↑ Durkin, Erin (February 14, 2019). "Amazon cancels plans for New York headquarters after fierce opposition". The Guardian.
  9. ↑ "Amazon Drops Plan For New York City Headquarters". February 14, 2019.
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  36. ↑ Capriel, Jonathan (May 20, 2019). "Amazon relabels Ballston job listings as HQ2-specific". American City Business Journals.
  37. ↑ Capriel, Jonathan (June 30, 2020). "Amazon hires HQ2's 1,000th worker, offers bonuses to those working through the pandemic". American City Business Journals.
  38. ↑ "Amazon HQ2 - VIKA Engineers". www.vika.com. Retrieved 2024-03-20.
  39. ↑ Capriel, Jonathan (January 22, 2020). "It's happening: Demolition begins on Amazon HQ2 site". American City Business Journals.
  40. ↑ Koma, Alex (December 14, 2019). "Amazon earns approval for its first new HQ2 construction in Arlington". American City Business Journals.
  41. ↑ Capriel, Jonathan (September 12, 2020). "Amazon-funded HQ2 park approved by Arlington County". American City Business Journals.
  42. ↑ Clabaugh, Jeff (November 5, 2021). "Amazon's first HQ2 retail tenants: dogs and coffee". WTOP-FM.
  43. ↑ Denham, Hannah (November 4, 2021). "Meet the first retailers to sign ground-floor leases at Amazon's HQ2". www.bizjournals.com. Retrieved December 3, 2021.
  44. ↑ DeVoe, Jo (4 October 2022). "Public art at Amazon's HQ2 takes shape as construction continues ahead of 2023 opening". ARLnow. Retrieved 22 February 2023.

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