Note: Atlanta Inno will be updating this story throughout the day with reactions from local tech leaders about Amazon's HQ2 announcement.
The biggest tech announcement of the year is here, just in time for you to squabble about it over Thanksgiving dinner with the family.
Amazon has selected Arlington, Va. and New York City as the sites for its second headquarters, according to the company. The company has also announced it has selected Nashville as the site for a new Center of Excellence for its operations business, which will create more than 5,000 jobs.
In over a year-long search, Amazon reviewed hundreds of cities for the site of its HQ2, which would bring a $5 billion investment and 50,000 jobs to the city selected. Atlanta, along with 19 other cities, made the shortlist for competing cities earlier this year. Check out this updated timeline from Austin Inno about the search.
But in a surprise decision, the retail and shipping giant has selected not one city, but chosen to split its headquarters, investment and jobs between two cities, to create three headquarters in the U.S.
The new headquarters in Arlington will be located in National Landing, and the New York City headquarters will be located in the Long Island City neighborhood in Queens. Both sites will split the 50,000 jobs, bringing in 25,000 each. The company will begin hiring in 2019. The operations center will be located in downtown Nashville as part of a new development just north of the Gulch, where hiring will also begin next year.
The two cities will also split the initial investment of $5 billion, with $2.5 billion going to Arlington and $2.5 billion invested in New York City. Both cities will establish 4 million square feet of office space with the opportunity to expand to 8 million square feet. The company estimates an incremental tax revenue of $3.2 billion over the next 20 years in Arlington and $10 billion in New York City.
“We are excited to build new headquarters in New York City and Northern Virginia,” Jeff Bezos, founder and CEO of Amazon, said in a statement. “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.”
But what about Atlanta? Why was the city snubbed for not only a split HQ2, but even a operations center like the one planned for Nashville?
Government leaders have been quiet Tuesday morning, with no statements to come out of Gov. Nathan Deal or Atlanta Mayor Keisha Lance Bottoms' offices.
David Cummings, the co-founder of the fourth largest tech incubator in the country, Atlanta Tech Village, said the announcement tied in to where Bezos has two large estates: Washington, D.C. and New York City.
"I think from an Atlanta point of view, it would have been good from the social proof of having Amazon and all the credibility it would have brought," he said. "But I think from the diversity of tech companies and tech startups, I think it would have put a real challenge on the talent pool and it would have been a real challenge on the cost of living and other key components of our great quality of life."
The true reward, Cummings said, was Atlanta being named as one of the top 20 finalists, as social proof and credibility for the region's booming tech scene. He said making the shortlist put Atlanta on the radar for a lot of companies that may not have otherwise considered the city.
"Just being one of the twenty finalists is a big feather in our cap for Atlanta and the region," he said.
The startup community should continue to keep its ingredients---quality of life, cost of living, quality of talent and relatively affordable talent---strong in Atlanta, Cummings said. Going through the process of selection for Amazon caused the city to evaluate a number of different things.
"I think this kind of large scale economic development exercise is something that is a net benefit to the community working through," he said.
Prominent Atlanta tech lawyer John Yates, from Morris, Manning & Martin, LLP, called the announcement a "silver lining situation." Though without HQ2 the city could lose the representational benefit of having Amazon select the city, Yates said the deck was stacked against us for obvious reasons: Bezos' ties to Washington, D.C. and a large number of Amazon customers are in the northeastern corridor.
"So from that standpoint, I don't view it as much of a negative reflection of Atlanta as I do the fact that (Amazon was) just overriding characteristics that we had no control over that steered it away," he said. "The gravitational pull was just too strong to Washington, D.C. and New York."
Not being selected will have a positive impact on the startup community, Yates said, because the strength of Atlanta as a tech community has always been innovation. Our academic institutions, funding from outside the community and growing innovation centers have created a base for innovation, he said.
"When you think about it, the real strength for our community has been innovation," he said. "What an Amazon would do is effectively siphon off a lot of talent to Amazon. Sure they're a good company, but you think about the nature of their business, I think of Amazon, I don't necessarily think of innovation, I think more of efficiency and operational excellence. If what we want to be is an innovation hub, then we need to keep the innovators and the entrepreneurs energized and provide talent to them that's reasonably priced and available."
Yates said we could learn from the Amazon selection process, which highlights the importance of working together as a community and the value of providing a positive message at all times with regards to the benefits, progressiveness and inclusiveness in our community. Some of the best deals, he said, are the ones you don't make.
"We may not have attracted Amazon as an outsider coming in, but there's no reason why we can't build billion dollar companies in our own backyard, and that's where we should spend a lot of our attention because that's where the real growth is going to come when you talk about jobs," he said. "And the beauty of it is, people come to Atlanta, they come to a metro Atlanta area and they want to stay here. We have a very sticky environment and what we need to do is foster the innovation for people who are here, who want to innovate and start new companies, and grow the next billion dollar company."
Sanjay Parekh, the co-founder and executive director of software and hardware startup incubator Prototype Prime in Peachtree Corners, said the move seems right for Amazon.
"They're closer to the political sphere in Washington, D.C., given the fact that Bezos also owns The Washington Post and now they're also closer to all the media and ad stuff in New York City," he said. "My view is Amazon has already got a large number of folks that work in and around Atlanta and Georgia. I can't imagine that will be going away or anything and I'm sure it will continue to increase."
Though Parekh described the news as a bummer, he said all would be okay for the Atlanta tech scene. In fact, Parekh said the decision certainly has an effect on the state, but not much of a difference for the startup scene.
"It would have been nice to have Amazon...in Atlanta," he said. "At the end of the day, I don't know that it makes---at least for the tech startup side of things---I don't know that it makes that much of a difference. Because Amazon Web Services, that's on the internet anyway. It doesn't matter where the people are as long as the services and the technology they provide continues to improve and that definitely seems to be happening regardless of them thinking about a second headquarters. The things that they role out on AWS seem to be getting better and better over time."
Georgia and Atlanta still have plenty of Fortune 500 companies, Parekh said, and businesses will continue to flock to the state. Given that we didn't receive the bid for Amazon HQ2, he said he proposed on Twitter we use a majority of those incentives created for Amazon towards the startup community.
"I said, 'Hey, I don't know what we threw out as an incentive to those folks to try to get them here but whatever it was, if we were willing to give that to Amazon, we should now be willing to do something else with that money,'" he said. "My proposal on Twitter was 80 percent of it going to funding new startups and hopefully we could create a company that surpasses or eclipses Amazon, and 20 percent of that go to transportation. The rumor is that we threw $1 billion of incentives."
A general consensus on Twitter in Atlanta is not only catching the silver lining, but even celebrating that our city didn't garner a massive Amazon headquarters. Take a look below.
Me realizing Amazon HQ2 is not coming to Atlanta #AmazonHQ2 pic.twitter.com/O1giBtlNOP
— Alisa (@masqueradeofart) November 13, 2018
Infrastructure (airport power outage, I-85 bridge collapse) and political (Casey Cagle Delta controversey, Betty Price HIV+ inquiry) issues did not play well for #Atlanta being selected as Amazon HQ2.
— Brenda Gilpatrick (@bgilpatrick) November 13, 2018
So Atlanta was never gonna get HQ2 imo for a lot of reasons. But that smaller campus for operations and logistics in Nashville? Atlanta couldn't get that? Who dropped the ball? Lol
— Alvin Borum (@PatchOHoulihan1) November 13, 2018
Official reaction to the Amazon HQ2 news from @Bisnow's Atlanta office....https://t.co/PcPjCgy58F pic.twitter.com/59BZdkZkou
— Jarred Schenke (@jbschenke) November 13, 2018
Amazon's HQ2 promises thousands of high-paying tech jobs to its selected city. In Atlanta, a finalist for the new headquarters, winning the bid could make things even worse for African Americans competing for STEM careers. @kamaubobb reports: https://t.co/dGyVdUKd3E
— Treehouse (@treehouse) November 13, 2018
so can we take the rumored huge Georgia incentive package that was thrown at getting Amazon HQ2 and fling 80% of it at funding Georgia startups and the other 20% at improving transportation throughout the state? #silverlining
— Sanjay (@sanjay) November 13, 2018
