Amazon Hunts for a New Headquarters

By Daniel Alvarez,
Money and Investing Writer

Amazon, the world’s largest online retailer and fourth largest company as measured by market capitalization, is preparing to get even bigger with a second corporate headquarters. In one of the largest civic competitions in North American histories, one lucky city will invite 50,000 jobs and almost $6 billion in construction.

Many cities are trying to lure Amazon’s new headquarters through economic incentives in the form of tax credits. Memphis, Tennessee, said it would give the company $60 million, while Chula Vista, California, is considering a $400 million incentive package.
But so far, it looks as though Newark, New Jersey, could be offering Amazon the most.Gov. Chris Christie wants to deploy $7 billion in potential tax incentives for Amazon in the state’s largest city, Christie’s office said in a statement on Monday.

Newark’s proposal includes a redevelopment of the city’s riverfront area for the site of HQ2, a representative from the project’s developer, The project includes 1,800 housing units, a 150,000-square-foot hotel, 100,000 square feet of retail space, a 30,000-square-foot food hall, 30,000 square feet of public space, up to 3,000 parking spaces, and up to 2 million square feet of commercial space.

To estimate the potential economic impact of the winning city we can look at the current global headquarters in Seattle. Between 2010 and 2017, Amazon paid its 40,000 Seattle-based employees nearly $26 billion and invested $3.7 billion in buildings and infrastructure.

All that money has ripple effects. Satisfied employees spend more locally, which creates jobs in real estate, entertainment, and hospitality. Amazon estimates that the firm has had an indirect impact of $38 billion on Seattle!

However, the new headquarters comes with the good and the bad. First, amazon will extract millions or even billions in tax incentives that could be invested in other local assets.

Also, by creating 50,000 jobs it can disrupt the local workforce as other local firms will have to compete for workers by raising wages. A third consideration is affordability. New Amazon in-migrants will need to live somewhere, which will put pressure on the existing housing stock. New housing development—including affordable housing—will be critical to ensure that Amazon’s arrival does not price out lower and working-class families.

We can see some of these potential downfalls affecting Seattle. As the company’s rise over the last decade has fueled exceptional economic and real estate growth, it’s also driven up rents for small businesses, led to long-term transportation challenges and local angst. Traffic is becoming a nightmare. And a predicted population boom will create a severe shortage of affordable housing. The city seems headed toward being a place where only the wealthy can afford to own homes.

As planners and local leaders across the nation look at each other and the proposals they feel they’re competing against, it might be useful to take a long look at Seattle, and how the city has and hasn’t adjusted to Amazon-fueled prosperity.

They have experienced an increase in homelessness; less of a chance for the middle and working class to live close to where they work; a negative impact on small businesses, housing, and rent. To combat this, Seattle now has a Mandatory Housing Affordability Program (MHA) with the aim of creating 6,000 new units of restricted-income housing in eight years.

With a lot more work to do, Seattle, and the next home for Amazon needs to pursue development strategies that work alongside of an organization as large as Amazon or work together on land use, transportation, and infrastructure in order to be successful in all the aspects of a thriving city.


A version of this article appeared in the Tuesday, October 24th print edition.

Contact Daniel at


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