It’s official: Amazon will split headquarters between LIC, Crystal City, and open new hub in Nashville

It’s official: After more than a year of hype, Amazon has announced that it will split its two new headquarters between Long Island City and Crystal City. And in a last-minute surprise, the company also revealed it will be opening a “regional hub” in downtown Nashville.

The news comes after several reports indicated that Amazon had settled on moving 50,000 employees to Queens, New York, and Arlington, Virginia, evenly splitting the workers between the new locations. The company announced on Tuesday that it will also create 5,000 more jobs in Nashville.

Amazon kicked off its competition to select a new headquarters in September 2017, a courting process that’s drawn considerable criticism in recent days. Cities across the country offered up substantial tax breaks and other incentives in hopes of luring the company’s second headquarters. Amazon ultimately selected two locations that had long been predicted as likely winners, while also receiving tons of data from those who competed.

New York State is providing $1.7 billion in tax credits and grants for the company’s move to Long Island City, according to the agreement between the state and Amazon. The company is expected to set up shop at a cluster of privately- and publicly-owned properties on the East River, including an industrial site owned by plastics company Plaxall Inc. at 44-68 Fifth Street and a  672,000-square-foot building owned by the city at 44-36 Vernon Boulevard in Long Island City. Plaxall has pushed for the 15-ace site, known as the Anable Basin, to be rezoned, which could also clear the way for nearly 5,000 housing units, of which 25 percent would be made affordable.

Separately, developer Savanna announced on Tuesday that it has entered into a letter of intent to lease approximately one million square feet of office space at One Court Square to Amazon.

The state is acquiring the public development sites from the city and net leasing $855,000 a year, according to the agreement. That doesn’t include the payments Amazon will also be making in lieu of property taxes, which will be used for infrastructure improvements in the neighborhood. It also doesn’t factor in the other of-right tax incentives Amazon could receive, which alone could count for another $1 billion, as The Real Deal first reported.

Amazon said it plans to take up to 4 million square feet of office space, and could grow into as much as 8 million square feet.

State and local politicians have been at odds over Amazon’s move. Cuomo’s administration, according to Crain’s, is planning to create what’s known as a general project plan to rezone the Anable Basin. The general project plan would allow the state to bypass the City Council to push the rezoning through. City Council member Jimmy Van Bramer, who represents the area, criticized the governor and mayor for “top-down” approach to wooing Amazon, with no community input.

Meanwhile, Virginia is shelling out $573 million in incentives for Amazon’s move to Crystal City, which the company is rebranding as “National Landing.” National Landing will also include parts of neighboring Pentagon City and Potomac Yard in Alexandria. JBG Smith, a real estate investment trust that was formed when Vornado Realty Trust spun-off its Washington, D.C. holdings, announced that Amazon will lease 500,000 square feet of existing office space at 241 18th Street Street, 1800 South Bell Street and 1770 Crystal Drive. Amazon will also purchase several development sites from JBG that have a total of 4.1 million square feet of buildable space. JBG will serve as Amazon’s development partner.

Tennessee is providing $102 million in grants and tax credits. The Nashville office will serve as a regional hub for Amazon’s tech and management functions for its retail operations division.