Amazon's new headquarters won't be in Philly. Here's what we did win (and lose) - Technical.ly Philly

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Nov. 13, 2018 12:33 pm

Amazon’s new headquarters won’t be in Philly. Here’s what we did win (and lose)

The company formally announced Tuesday it would be splitting its HQ between Long Island City, N.Y. and Arlington, Va. Here's how the local tech scene is feeling about the news.

Part of Amazon's Seattle campus.

(Photo courtesy of Jordan Stead/Amazon)

The year-long marketing blitz that spun hundreds of cities into a competitive frenzy over a $5 billion economic development project is over: Amazon has officially announced the winners of its second (and third) headquarters.

For weeks now, the neighborhood of Crystal City in Arlington, Va. had been reported to be among the front-runners in the search for a second headquarters site of the Seattle-based ecommerce giant, and on Tuesday, the company said it had selected Arlington and Long Island City, N.Y. as the winners of the bid process after considering pitches from over 200 cities in the U.S. and Canada.

The promise of 50,000 jobs now became 25,000 for each of the new hubs, with hiring starting as early as next year.

“We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon, in a company press release. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

Philadelphia Mayor Jim Kenney, who was notoriously bullish on the city’s chances, celebrated Philly’s ascension of sorts into the 20 finalist cities in January. In a statement Tuesday, Kenney played up the advantages of having entered a strong bid.

“While Philadelphia was not ultimately chosen for Amazon’s HQ2, I thank Amazon for its consideration and am honored that we were among the top contenders,” he said. “I also recognize the value of this competitive process, which has benefited our city in many ways. It put Philadelphia in the national (and international) spotlight — increasing our visibility to other companies and showing our viability for other large-scale projects.”

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The release also mentioned a consolation prize of sorts for Nashville: Amazon will set up an “Operations Center of Excellence” that will create around 5,000 jobs.

So, despite not being chosen, what did Philly gain from entering the fray? Ask site selection consultant John Boyd and he’ll say that Philly, like most of the East Coast, is now in a pretty good position to benefit from having the massive tech hubs a train ride away.

“It was wise to split it up because of the economic impact,” Boyd said. “You have two principal sites and, over time, you’ll start to see spinoff projects. Philly is prime to be in the mix there.”

Tech exec Brigitte Daniel, who worked alongside a coalition of Philly business leaders to put together the proposal, said last year another inherent win of entering the process was the chance to band together stakeholders around a common goal.

“The fact that we’re considered for the second run means we have what it takes to offer a company like Amazon a holistic destination,” Daniel said at the time.

Kenney echoed the need for joint efforts around common goals like these.

“It required key stakeholders from various sectors to come together like never before and unite around a shared message and strategy for our city,” the mayor said. “I am hopeful that we will continue to harness the energy found throughout this process and apply it to future business attraction, retention, and expansion efforts in Philadelphia.”

Workforce development expert Michele Martin told Technical.ly an HQ2 outside of Philly meant dodging what a Seattle columnist dubbed the “prosperity bomb” effect the massive tech employer had in the city.

“[I feel] relieved that we aren’t going to be on the hook for billions in tax incentives to a rich corporation and the acceleration of already troublesome gentrification trends in our neighborhoods,” Martin said on Twitter.

Speaking of incentives, the total breakdown of benefits has been made publicly available on Amazon’s site. Contingent upon meeting certain milestones, Arlington will grant Amazon direct incentives up to $573 million, with an additional $195 million from the Commonwealth of Virginia. The New York City figure, all told, exceeds  $1.5 billion in tax breaks.

In Philly, despite numerous Right-to-Know requests from local outlets including the Philadelphia Inquirer (and Technical.ly), the City of Philadelphia hasn’t released the data on exactly how much it offered Amazon in its incentives package.

After all the hoopla, what’s the final balance from the tech scene?

Amino founder Will Luttrell thinks this is good news, with Amazon choosing not one but two East Coast cities that are reachable via Amtrak’s Northeast Corridor.

“It means more trained engineers, product, sales, etc. folks for us to coax down to the much more livable City of Brotherly Love,” Luttrell said.

But if you ask another serial entrepreneur like Guru’s Rick Nucci, he’ll say that a squarely tech anchor with the kind of pull Amazon would have had in Philly is something to be missed.

“We need a tech anchor(s) in Philadelphia, it is one of the more notable things missing and I think a critical ingredient to a successful startup ecosystem,” the founder said in an email. “That said, people continue to move into this city because they desire to live here (not just because its cheaper) and more students continue to graduate from our great schools and stay here after graduation. All the right things are happening, it’s just gonna be slower without a tech anchor to help develop talent more rapidly.”

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