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Philly loses out on Amazon HQ bid to New York and Northern Virginia

Company's decision will be a boon to two metropolitan areas.

In this Wednesday, Nov. 7, 2018, photo, the Long Island City waterfront and skyline are shown in the Queens borough of New York. One of the areas that Amazon is considering for a headquarters is Long Island City.
In this Wednesday, Nov. 7, 2018, photo, the Long Island City waterfront and skyline are shown in the Queens borough of New York. One of the areas that Amazon is considering for a headquarters is Long Island City.Read moreMark Lennihan / AP Photo Inc. will open major outposts in Washington's Northern Virginia suburbs and New York City's Queens borough, splitting its much-sought "HQ2" investment between the East Coast sites, according to people close to the decision-making process.

An announcement was made Tuesday to make it official.

An Amazon spokesman declined to comment. The company had said it would make a decision on the high-profile project this year.

Philadelphia was among the 20 locations that had been under final consideration by the Seattle-based company for its so-called second headquarters, where it has said it will employ as many as 50,000 people.

Sites proposed as potential headquarters locations by Philadelphia included Wexford Science and Technology's uCity Square project in University City and the Navy Yard in South Philadelphia. Amazon's plans call for spending more than $5 billion on the new headquarters, which could eventually encompass eight million square feet of offices, an amount of space equal to more than six Comcast Center towers.

The choice of the Crystal City section of Arlington, Va., would cement Northern Virginia's reputation as a magnet for business and potentially reshape the Washington region into an East Coast outpost of Silicon Valley over the next decade.

The decision also would hand Virginia Gov. Ralph Northam, a Democrat, and local leaders part of the largest economic development prize in a generation _ one promising billions of dollars in capital investments alone _ but could also put pressure on the region's already steep housing

It also represents a victory for New York Mayor Bill de Blasio and Gov. Andrew M. Cuomo, who had joked that he would change his name to "Amazon Cuomo" if necessary to land the prize.

Other final suitors in addition to Philadelphia included the District of Columbia itself; Montgomery County, Md., and 16 other jurisdictions Amazon had considered since narrowing its list in January. News of the decision was first reported by the Wall Street Journal.

Amazon's decision to split the project rather than open a second headquarters on par with its Seattle campus has angered some, who say the company ginned up competition among cities only to change the rules midstream. Some said it was unfair that the company seemed to be considering only sites in more affluent communities.

Amazon launched the project in fall 2017, issuing search criteria for "a second corporate headquarters" with an investment of $5 billion.

Amazon CEO Jeff Bezos personally described the scope of the project, saying in a news release: "We expect HQ2 to be a full equal to our Seattle headquarters." (Bezos owns the Washington Post.)

Others said a split makes sense for Amazon because of the difficulty of finding 50,000 qualified workers _ many of them computer engineers _ in a single region. Dividing the project also could ease concern about the pressure that Amazon's growth could put on housing, transportation networks, and schools.

In picking Crystal City, Amazon opted for a close-in suburban site, just across the Potomac River from Washington, and a half-mile from Reagan National Airport. Outdated buildings and underused properties now fill the site, including yawning vacancies in some of the office buildings.

In New York, the company has been eyeing a neighborhood in Queens called Long Island City, across the East River from Midtown Manhattan.

Although 238 locations initially submitted proposals to Amazon, the Washington region was considered a favorite from the outset by many experts due to Bezos' personal connections in the region, particularly the $23 million mansion he purchased in the Kalorama neighborhood last year and his ownership of the Post.

Others suggested that Amazon executives want to be near Washington to cozy up to the federal government, either because of increased concerns that regulators may pursue antitrust actions against the company or because the federal government has become a critical Amazon customer.

Virginia also offers the political advantage of being a purple state, making it easier for the company to seek support from both political parties.

Amazon previously announced that it would base its cloud computing unit, Amazon Web Services, in Herndon, near some of its data centers.

The Washington area also naturally fit many of the criteria Amazon called for in its search, among them a deep workforce of talented workers, a robust public transit system, and easy airport access.

In discussions with local officials earlier this year, Amazon executives were especially focused on the quality of the workforce and availability of affordable housing, according to Arlington economic development director Victor L. Hoskins.