Amazon has announced its intention to build a second headquarters complex, the equal in size to its Seattle headquarters. And localities across North America — including some in the Washington region — are salivating over the prospect of winning what could be the biggest economic development trophy of all time.
The potential reward is stupendous. According to the Washington Business Journal, Amazon’s second corporate headquarters would bring 50,000 new full-time jobs with an average compensation of more than $100,000 over the next ten to 15 years. The company expects to invest $5 billion over the first 15 to 17 years of the project, which could require up to eight million square feet of commercial space.
Only handful of major metropolitan areas in North America have a prayer of competing for such a huge project because only a handful have a labor market big enough to accommodate such a massive demand for IT-savvy workers. Amazon has said it is focusing on metro areas with a population of more than one million.
With its highly educated, technically proficient workforce, the Washington region fits the bill in many ways. Perhaps giving Washington another edge is Amazon CEO Jeff Bezos’ familiarity with the region. He owns the Washington Post, he recently purchased the former Textile Museum property in the chi-chi Kalorama neighborhood for $23 million, and Amazon gave a D.C. nonprofit a $1 million match grant — its first outside of Seattle, notes the WBJ.
Moreover, Amazon Web Services (AWS) has a track record of doing business in Northern Virginia, which it has helped build into a world-class data-center hub. The cloud services subsidiary has developed strong relations with local governments, Loudoun County and Prince William County in particular, as well as local electric utilities, and the state of Virginia. AWS has worked out deals to supply its data centers with Virginia-located solar power.
Insofar as a company values the ability to get things done — and building a massive corporate center bigger than the Pentagon will require extensive zoning and regulatory permissions — and insofar as Amazon has had a positive experience in Virginia, I would expect the company to give the Old Dominion serious consideration.
You know that Governor Terry McAuliffe would give his right arm to close a deal of this magnitude — it would arguably be the greatest economic development coup in Virginia’s history. Amazon’s search and decision-making process undoubtedly will extend beyond McAuliffe’s term of office, but I cannot imagine the governor not making it his number one priority. He will have behind him much of the Virginia business establishment, desperate as it is to diversify the Northern Virginia economy from its perilous dependence upon the federal government.
Northern Virginia likely will be a strong contender for the investment, but it will face stiff competition from other major metros. Other bidders for the big prize undoubtedly will roll out billions of dollars in subsidies and tax breaks, which Virginia might be hard-pressed to compete against. Playing in this league will dwarf the resources currently available through the Commonwealth Opportunity Fund and other tools at the governor’s disposal.
We will know that Virginia is serious about competing for the Amazon headquarters if McAuliffe asks for special legislation from the General Assembly in January. Doling out billions in subsidies and tax breaks to benefit Bezos, one of the world’s richest men, should make for a rollicking good debate.There are currently no comments highlighted.