Internet giant Amazon, after more than a year of intense competition, said Tuesday it will build half its East Coast headquarters in Long Island City, Queens, promising 25,000 jobs and giving the region the opportunity to become a tech hub to rival Silicon Valley.
The decision, which the online giant said was driven by the region's talent pool and the transportation infrastructure in Queens, will generate jobs with an average salary of more than $150,000.
Amazon said it will invest $2.5 billion. In return, it will receive $2.8 billion in state and city aid. The $1.5 billion incentive package offered by the state is the biggest ever.
The online retailer also announced it would put a second East Coast headquarters in suburban Washington, D.C., with another 25,000 jobs. It had originally looked for a single location for 50,000 jobs. The company said it revised its plan because it could "recruit more top talent by being in two" regions.
“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," Jeff Bezos, founder and CEO of Amazon, said in a statement. "We look forward to becoming an even bigger part of these communities.”
Amazon said it would start hiring for both offices in 2019.
Long Island officials are hoping the region's economy, real estate and job market will benefit from a spillover effect.
"Nassau offers potential Amazon employees short commute times via the LIRR, steps away from hundreds of units of new housing," said Nassau County Executive Laura Curran. "I look forward to the anticipated economic growth for the entire region."
Meanwhile, New York City leaders are split on whether the state offered too much to win Amazon.
The company said Long Island City offers some of the best transit access in New York City, with eight subway lines, 13 bus lines, commuter rail, a bike-sharing service and ferries serving the area, as well as two major airports in proximity.
Amazon said it will move into 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet, and adding an estimated $10 billion in incremental tax revenue over the next 20 years.
"New York can proudly say that we have attracted one of the largest, most competitive economic development investments in U.S. history,” Gov. Andrew M. Cuomo said in a statement. “With an average salary of $150,000 per year for the tens of thousands of new jobs Amazon is creating in Queens, economic opportunity and investment will flourish for the entire region."
Mayor Bill de Blasio added in a post on Twitter that New York is gaining "good paying jobs and Amazon is about to meet the most talented work force in the world in one of the most diverse places on the planet. Welcome to Queens."
Other elected officials are pushing back on the benefits package, arguing it's too friendly to the company and that it would displace middle-class New Yorkers.
“New Yorkers have real unmet needs from their government," State Sen. Michael Gianaris and New York City Councilman Jimmy Van Bramer, said in a statement. "We are witness to a cynical game in which Amazon duped New York into offering unprecedented amounts of tax dollars to one of the wealthiest companies on Earth for a promise of jobs that would represent less than 3 percent of the jobs typically created in our city over a 10-year period."
Some experts expressed caution about the financial aspect of Amazon's move. Credit rating agency Fitch Ratings said the new headquarters "would have at most a muted impact on the economies and credit qualities of Arlington County and New York City."
Even if New York had gotten the full 50,000-employee headquarters, it would have represented only about 0.5 percent of the metro area's workforce, Fitch said.
Moses Gates, vice president for housing and neighborhood planning at the Regional Plan Association, said "like other large economic developments, this doesn't take place in a vacuum. The questions being asked include what are we going to do with the infrastructure needs.
"Any time you bring jobs and economic activity, it's good for the region," Gates added.
Amazon's new office, along with a reported new Google expansion in Manhattan, could send housing costs higher on Long Island, real estate experts said.
But the impact won't be immediate because the workers wouldn't surge into the city all at once, and other areas, including neighboring New Jersey and Connecticut, would also absorb many of the newcomers.
The online retailer said last year it would choose a location for what it dubbed “HQ2.” The company received 238 proposals before narrowing the list to 20 in January.
Also on Tuesday, Amazon announced it has selected Nashville for a new Center of Excellence for its Operations business, which is responsible for the company’s customer fulfillment, transportation, supply chain, and other similar activities. The Operations Center of Excellence in Nashville will create more than 5,000 jobs.
Amazon spent at least $418,000 lobbying the New York State government from Jan. 1, 2016, through June 2018, according to records filed with the Joint Commission on Public Ethics.
The company has lobbied on a variety of issues, including sales tax on internet purchases, cloud computing, procurement rules and laws, as well as minority- and women-owned business legislation.
Amazon has more than 610,000 employees worldwide, including more than 250,000 in North America.
With Yancey Roy, Scott Eidler and James T. Madore
Amazon fast facts
Average salary: $150,000-plus
Office space: 4 million square feet to start
Investment: $2.5 billion
Tax breaks: $2.8 billion