Amazon picks Crystal City and New York for HQ2, snubbing Texas
The long-awaited decision comes more than a year after Amazon announced the public bidding war in September 2017.
In the end, there were two, and neither was in Texas.
Amazon announced Tuesday morning that it will build its second and third headquarters in New York and Crystal City, Virginia — a blow to Texas, a state fiercely proud of its business-friendly reputation that boasted two cities on the tech giant’s short list of 20 potential picks.
Since September 2017, when the tech giant announced it was searching for a home for its “HQ2” — a multi-billion dollar capital investment expected to create as many as 50,000 new jobs — Texas pledged to compete aggressively, and some cities went “all-in” on the wooing efforts. Austin and Dallas made the January 2018 cut for Amazon’s shortlist, a trim that eliminated some 200 other bids, including one each from Houston and tiny Milam County in Central Texas.
Ultimately, the company opted to split that prize into two, with 25,000 jobs each intended for New York’s Long Island City and Virginia’s Crystal City. Nashville will also become a home to an Amazon “operations center of excellence,” with more than 5,000 jobs, Amazon announced Tuesday.
Throughout the 14-month bidding war, Texas officials had projected confidence about the state’s ability to attract top businesses; in March, the state won a Site Selection magazine award for attracting investments, its sixth consecutive victory. In television interviews, Gov. Greg Abbott boasted about the state’s “built-in” advantages for attracting big tech.
Both Austin and Dallas were considered top contenders for HQ2, winning top billing in a host of rankings. Austin, a burgeoning tech hub in its own right, boasts the state’s flagship university campus and a relaxed culture attractive to young professionals — but its relatively small airport, poor transit system and rising rents may have hurt its chances. Dallas, on the other hand, is a bigger city with a world-class airport. Experts expected it could more easily absorb the enormous influx of new workers — but some speculated that it lacked a “cool factor” Amazon sought to attract top talent.
And experts had cautioned since the beginning of the bidding process that Texas’ conservative social policies might hurt its chances with the young, largely liberal tech company, whose owner, Jeff Bezos, has championed gay rights. A group of activists launched a “No Gay No Way” campaign, calling on the tech giant to reject any states with policies unfriendly to the LGBTQ community.
After the news broke Tuesday morning, Austin's chamber of commerce said in a statement that “the fundamentals that made Austin a top 20 finalist and have helped our city be a leader in job generation — our incredible talent and lifestyle—haven’t changed.”
“Make no mistake, this has been a ‘win’ for our region regardless of the outcome,” said Dale Petroskey, CEO and President of the Dallas Regional Chamber. “Our business community grows and expands by the day, and our momentum as a destination of choice has only increased as a result of being a finalist for HQ2.”
Amazon said in its announcement that it may receive more than $2 billion in tax incentives from the two locations. Dallas offered the company up to $600 million in incentives, not including the state's contribution, according to a summary of the bid the city released Tuesday. Austin has not disclosed its offer.
Abbott told Fox News earlier this year that Texas would “be stepping up and providing some incentives,” though it would not “give away the farm.”
Those state-level incentives have not been disclosed publicly, but likely fell in the nine-figure range. Documents released as part of Houston’s failed bid showed the city had offered $268 million in incentives, including the state’s contribution. Arlington, which released its bid after being eliminated from contention, had offered $921 million, a figure that did not appear to include a contribution from the state.
Disclosure: The Austin Chamber of Commerce has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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