Amazon HQ2 Will Be Likely Be Split Between Two Cities

November 7, 2018

In possibly the least romantic reality show ever, Amazon seems to be winding down its search for a second headquarters. But this tale isn’t without a special twist at the end. Instead of choosing just one city in which to open a second location, Amazon is reportedly picking two cities.

The big winners? Crystal City, Virginia (in Arlington, outside D.C.) and Queens, New York.

Are you thinking, “Huh? Where? Why?” Let’s look at why Seattle-based Amazon might have made this decision.

Why These Cities?

The company started with 238 potential cities, narrowing the list to a final group of 20 after a long round of review (and we’re assuming some pretty amazing fruit baskets — and at least one cactus). The reported winners likely made the cut for these reasons:

Do You Know What You're Worth?

1. Lots of Tech Workers

Amazon already rolled out its checkout-less Amazon Go store in New York City, and the area is known for other big business HQs such as IBM (granted, in Armonk, NY, not one of the five boroughs).

Meanwhile, Northern Virginia, where Crystal City is located, offers all the revolving tech employees who dip in and out of government work in the DC area, as well as an influx of recent grads, transplants and older workers heading out of the Northeast’s bad winters (to slightly better bad winters).

2. East-Coast Convenience and Infrastructure

Coming off of a West-Coast base in Seattle, many thought that Amazon would pick a Midwest or Southern city where it could grow and oversee operations in other time zones. It’s not too surprising that they didn’t pick a West-Coast city, in that light.

I’m kind of surprised that Amazon didn’t go East Coast and South or Midwest when it split its picks.

Colorado Governor John Hickenlooper said nearly a year ago that he wasn’t going to be too upset if Denver lost out on this horse race.

“There will be a sense of relief if they choose somewhere else, because there are a lot of challenges and lot of hard work we will be avoiding,” Hickenlooper said in January 2018.

Amazon’s supposed picks in New York and Virginia already have well-established public transportation, housing and that ready workforce. All that remains is to build some kind of building in each, or convert an existing space.

Will it lead to rapidly rising housing costs?

Would it have been interesting if one of the underdogs had won? Definitely. It would have been really great to see if Amazon had been able to revitalize economies in struggling post-industrial towns like Gary, Indiana or Flint, Michigan (but they didn’t make the final-20 cut). Would it have been good for Columbus, Ohio or Newark, New Jersey? Probably.

But some homeowners and renters are breathing a sigh of relief that they aren’t the next Amazon hub.

“Those people that are cheering Amazon’s snub are probably looking at Seattle, the city that got the first headquarters in 2010, as a cautionary tale of what happens when the tech giant runs a town,” wrote Elise Herron in the Willamette Week when Portland failed to make the final cut. “Amazon boasts having funneled $38 billion into the economy of its flagship city, but many residents point to its presence as the source of many of the city’s problems.”

“As an influx of young, rich tech workers began infiltrating once culturally-rich neighborhoods—like the queer-centric Capitol Hill—they snuffed out community and affordability,” Herron wrote.

As it is, Amazon picked two places with already pretty high costs of living. What will DC and NYC’s housing costs look like in a decade after Amazon moves in?

Trulia puts the Queens real estate market at an average of $536 per square foot, and a median rent of $2,300 per month. NerdWallet says the housing costs are actually 11 percent higher in Queens than in Seattle, with the median rent going at $3,051 for a 2-bedroom apartment.

In Arlington, Virginia, the cost is 39 percent higher than the national average, according to PayScale data. And NerdWallet says housing costs in the Washington-Arlington-Alexandria area are 23 percent higher than Seattle.

Are we still yet to crown another tech hub city in America?

In Crain’s Chicago Business, Joe Cahill wrote that Chicago had lost little by losing this contest, while the prize in fact, is diluted with two all-but-crowned winners.

“Winning a true, co-equal headquarters of a leading tech company like Amazon would have conferred a degree of digital bona fides that has eluded us for decades,” Cahill wrote. “But Amazon’s reported decision to split the prize between two cities means the winners will get secondary outposts that provide a nice economic pop, but none of the stature that comes with a headquarters.”

So if there are two cities tied for second place, does that make them bridesmaids, never a bride? Who really got the rose this episode? I suppose we still don’t know.