Amazon Holds Advanced HQ2 Talks With Crystal City, New York City, and Dallas

Amazon has engaged in advanced discussions about its second headquarters with cities including New York, Dallas, and Crystal City, Virginia. 

Last year, Amazon announced its plans to build a second corporate headquarters, referred to as HQ2, prompting a bidding war as 238 cities and regions responded to the company’s request for proposals. Amazon required cities to sign non-disclosure agreements, so information about the process and cities’ proposals have largely been withheld from the public. According to the company, it will invest more than $5 billion in construction and create as many as 50,000 high-paying jobs. Sources close to the HQ2 decision-making process told The Washington Post that Amazon considered making an announcement by the end of October but has now put it off until November.

The Washington Post reported on November 3 that Amazon’s negotiations with Crystal City, a suburb of Washington, D.C., are so close to completion that the Northern Virginia city’s top real estate developer, JBG Smith, has pulled some of its buildings off the leasing market, and local officials have discussed how to make an announcement following the midterm elections, according to public and private-sector sources.

After publication of the story in the Post, Amazon’s director of economic development posted on Twitter: “Memo to the genius leaking info about Crystal City, VA as #HQ2 selection. You’re not doing Crystal City, VA any favors. And stop treating the NDA you signed like a used napkin.”

Other cities reportedly still in the running include New York and Dallas. The Wall Street Journal reported that New York is still actively talking with Amazon, which has explored Long Island City, Queens, as a possible location for HQ2. Sources involved in the decision-making process told The New York Times that Amazon is now finalizing preparations to split its plans for HQ2 between two locations, Crystal City and Long Island City. Amazon executives met two weeks ago with Gov. Andrew M. Cuomo, and separately with Mayor Bill de Blasio.

“I’ll change my name to Amazon Cuomo if that’s what it takes,” Governor Cuomo told reporters. The New York Times reports that, according to one of its sources, New York State had offered potentially hundreds of millions of dollars in subsidies.

Mike Rosenberg, a reporter for the Seattle Times, posted on Twitter that the New York and Washington, D.C., areas are already Amazon’s largest East Coast offices. He argued that Amazon had conducted the highly publicized nationwide search in order to leverage other offers to get hundreds of millions in subsidies from New York and Virginia cities.

Robert B. Engel of the Free & Fair Markets Initiative shares this sentiment.

“I was shocked,” he told The New York Times. “They’ve duped more than the bidders. They’ve duped all of us. They can’t live up to a promise that wasn’t fair to anyone but Amazon.”

According to the Journal, advanced talks also continue in Dallas, where a group of developers recently purchased property on a site that they earmarked for Amazon.

Critics have questioned the lack of transparency surrounding the bidding process for HQ2. Activists in the finalist cities have held demonstrations and town hall meetings calling for more transparency, as reported by GeekWire. “The public deserves to see what’s in the Amazon HQ2 bid and our community must have a voice when it comes to development,” said Brandi Fisher, worker justice organizer for Pittsburgh United, at a demonstration in April.

While the public has been left in the dark, “Amazon will walk away from this stunt with a stash of incredibly valuable data,” Stacy Mitchell of the Institute for Local Self-Reliance told the Times. “It’s learned all kinds of things from the bidding cities — like their future infrastructure plans — that even their citizens are not privy to. Amazon will put this data to prodigious use in the coming years as it looks to expand its market power and sideline the competition.”

The news about HQ2 coincides with Amazon’s announcement that it will offer free shipping on all U.S. orders during the holiday season. In a move that will put pressure on its retail competitors, Amazon will waive the $25 purchase minimum for shoppers without a Prime membership on orders arriving in time for Christmas.