AMAZON CLEANS UP. 

Amazon was also offered more than $2 billion in tax incentives from New York and Virginia. – Todd Horwitz, Bubba Trading

 

Amazon’s New Headquarters

After running a year-long competition that drew interest from hundreds of cities and a number of states, Amazon has chosen New York City and Northern Virginia to split duty as its second headquarters. On Tuesday, Amazon announced it has chosen New York’s Long Island City and Virginia’s Arlington for HQ2. Both locations will receive a $2.5 billion investment from Amazon, and each will have more than 25,000 workers over time. Hiring begins next year.

The reason behind the surprise decision to divide the facility was due to the talent pool. Amazon realized it could recruit more skilled workers and offer employees choice if it offered two locations.

Amazon said that the size and quality of the winners’ labor pools decided the competition. Amazon was also offered more than $2 billion in tax incentives from New York and Virginia. Up to $1.2 billion of that will come from New York state’s Excelsior program, a discretionary tax credit. In Virginia, the company could receive up to $550 million in cash incentives from the state by 2030, and $200 million more after that if it continues to hire.

Both state programs are tied to the number of jobs the company creates — if Amazon’s hiring falls short of projections, the incentive payments will be smaller.

Both states have pledged to help Amazon with infrastructure upgrades, job-training programs and, in the case of New York, assistance “securing access to a helipad” — some of which did not come with a price tag.

Still, in New York and Virginia, most top politicians hailed the Amazon news as a major victory, and the culmination of an aggressive sales job. “We had an unprecedented opportunity to add to the number of jobs,” Mr. de Blasio said on Tuesday. The project is a “transformational opportunity to diversify the economy” of Northern Virginia, which is heavily dependent on government contracting, said Stephen Moret, president and chief executive of the Virginia Economic Development Partnership.

New York’s sales pitch began in September 2017, immediately after Amazon began its search for a second headquarters that Mr. Bezos promised would be a “full equal to our Seattle headquarters.”

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary

 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.