Last week Amazon (NASDAQ: AMZN) announced a list of 20 cities who made it through round 1 of the company’s quest for a second headquarters location in North America. The company put the call out for applications in September, saying that HQ2, as it is being called, would serve as a secondary operation to complement Amazon’s primary headquarters in Seattle. Amazon said it would invest more than $5 billion in construction and operation costs. Here’s the shortlist of cities who made the cut:
Only one city on the West Coast – Los Angeles – made the shortlist, with the majority being located on the East Coast.
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In addition to the initial investment to build HQ2, Amazon said the second headquarters could include as many as 50,000 high-paying jobs and tens of billions of dollars in additional investment in the nearby community. As a comparison, Amazon’s Seattle headquarters is comprised of 33 buildings totaling 8.1 million square feet. The campus employees more than 40,000 staff.
The estimated capital investment from 2010 to 2016 was $3.7 billion plus an additional $1.4 billion in utilities and maintenance expenses. Amazon estimates that it has generated 53,000 additional jobs in the Seattle area and contributed another $38 billion in the local economy as a result of Amazon’s investments. In addition, the number of annual hotel nights by visiting Amazon staff and their guests was 233,000 for 2016, and more than $43 million has been paid to Seattle’s public transportation system as employee transportation benefits.
Now that Amazon has whittled the group of applicants down to a list of 20, it will do a deeper dive with each city to identify the best candidates. Amazon plans to make a decision in 2018. Put simply, whatever city is lucky enough to win the bid for HQ2 can count on significant economic growth in the years to come.
Last week Amazon also announced that it was raising rates for Prime members who choose to pay monthly. Prime members who choose to pay monthly will see a $2 per month increase, going from $10.99 to $12.99 per month. New Prime student members who choose to pay monthly will now pay $6.49 a month, a $1 a month increase. Existing monthly Prime and Prime student members will pay the new price at renewal, beginning February 18. Annual Prime memberships are still $99 per year, and annual Student memberships are $49 per year, but those who choose to pay monthly will pay at the higher rates.
As if that wasn’t enough news, Amazon has opened its Amazon Go store to the public. Previously open only to Amazon employees, the store at 2131 7th Ave. is a new kind of grocery store. Shoppers download the Amazon Go app, downloadable from the App Store, Google Play or the Amazon Appstore, then shop in the Amazon Go store – no lines, no checkout. Shoppers’ accounts are charged as they pick up items and walk out of the store with them. The 1,800-square-foot store is open Monday through Friday, 7 a.m. to 9 p.m., and shoppers can find a variety of ready-to-eat breakfast, lunch, dinner and snack items as well as grocery store essentials like bread and milk.
A second headquarters, a price increase and a new grocery store concept. It’s all in day’s work for Amazon, and all three will likely prove to be smart business moves for Amazon. Regardless of the line of business or what they’re working on, Jeff Bezos and his Amazon teams seem to have the Midas touch.