New Questions Swirl as Amazon Gets Closer to HQ2 Decision

By Amanda Weston

The speculation about Amazon's new headquarters shifted on Monday from which city will be chosen to how many cities.

The Wall Street Journal reported Monday that the Seattle-based company may split its new headquarters between two different cities, rather than picking just one. Citing a person familiar with the discussions, the Journal said splitting the workforce by placing 25,000 in each city would make recruitment, housing, and transit issues easier to manage.

The short list of HQ2 finalists has been said to include Crystal City in Virginia, Dallas, and New York City.

The Washington Post reported this weekend that Amazon ($AMZN) was in advanced talks with Crystal City, but one of the journalists who broke the story told Cheddar on Monday that the deal is far from closed.

"I don't think this is over," Washington Post reporter Jonathan O'Connell said.

"We've got to be getting very close to a decision. People have told me that have talked to Amazon that they expect it to be this month. So we're really kind of near the finish line right now."

Sources told the Post that Amazon has discussed how quickly it would move employees to Virginia and which buildings it might use. O'Connell and his colleague Robert McCartney also wrote that the city's top real estate developer has pulled some properties off the market.

The director of economic development at Amazon, Mike Grella, expressed his displeasure with the report in a disapproving tweet.

"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," Grella wrote.

Although Amazon "has held advanced discussions" with Crystal City, the e-commerce giant reportedly has also led several serious talks with Dallas, Tex., and New York City.

In O'Connell's view, the consideration is far more than geographical.

"I think the thing that's driving Amazon here more than anything is that they need to find their next generation of workers," he said. "They hire so quickly. They are so big. They grow so fast, that they pretty much dismissed all the smaller markets that they had on their list. They are looking at the biggest markets with the most talented workers."

Among the three alleged front-runners, O'Connell said Dallas is the cheapest option. He added the city already adds about 100,000 jobs per year, so adding Amazon's 50,000 over 15 years would not dramatically change its "trajectory."

New York City would cost the company more since it would need to pay employees higher wages to live in such an expensive place. O'Connell said Virginia falls somewhere in the middle.

But Crystal City holds the advantage of being close to the political epicenter of Washington, D.C.

"One big threat to the company is that federal regulators will consider it too large, that it's practicing monopolistic ways and try to break it up in some way or rein it in in some way, and that's a major threat to Amazon," O'Connell said. "What would moving to the Washington area do to sort of bolster it in the face of regulators?

"Some people think that's very important, and obviously other government contractors have moved here, Northrop Grumman comes to mind, because they were worried about what regulators would do. So that could very well be an angle that they're playing here. But it's a very long-term game that Amazon's playing, so it's hard to tell."

O'Connell pointed out Amazon founder and CEO Jeff Bezos seems to be showing a personal ー and professional ー interest in D.C.

Not only did Bezos purchase The Washington Post in 2013, but he owns a large home in the area.He also has been visiting more often.

Amazon has not publicly set an announcement date for its HQ2 selection, but Bezos has said a decision will be made by the end of the year.

For full interview click here.

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