Amazon near deals with New York, Virginia for split HQ2, newspaper says

Amazon.com Inc. will separate its proposed second headquarters into two locations, and is close to deals to put major new offices in Long Island City, New York, and the Crystal City area of Arlington, Virginia, according to The New York Times, which cited unidentified people familiar with the matter.

The e-commerce giant last year announced plans to invest $5 billion in a second HQ and hire as many as 50,000 people, setting off a frenzy of interest from cities in the United States and Canada. It announced a list of 20 finalists that included Indianapolis and is scheduled to make a final decision by the end of the year.

The company will choose two locations instead of one, The Wall Street Journal reported earlier Monday. Amazon has decided that one location lacked sufficient technology talent, the Journal said. The New York Times reported those sites will be Long Island City, in the borough of Queens across the East River from Manhattan, and the Crystal City neighborhood of Arlington, Virginia, which is across the Potomac River from Washington, D.C.

Amazon may want to avoid criticism that its arrival in a new town overwhelms the area. The company has fueled an economic boom in its hometown of Seattle, where it is also often blamed for traffic problems and skyrocketing housing costs that squeeze some residents out of the city.

"You could look to Seattle and see that it’s had great positive consequences, but it also probably has had some unintended ones that maybe aren’t as well received," SunTrust Robinson Humphrey Inc. real-estate analyst Michael Lewis said. "You can see what it’s done to the cost of living in Seattle."

The Washington Post reported Saturday that Amazon was in advanced discussions to locate its second headquarters in Crystal City. An Amazon spokesman declined to comment. Crystal City is an urban neighborhood that features a concentration of high rise offices, hotels and residential buildings.

Some of contenders are close to each other and draw from the same labor pools. New York City and Newark, New Jersey, are among the finalists, as are Washington, Northern Virginia and Montgomery County, Maryland. Amazon could choose one metropolitan region and still have to negotiate with multiple states and local governments for tax incentives.