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VOL. 42 | NO. 45 | Friday, November 9, 2018

Amazon adding Center of Excellence, 5,000 jobs in Nashville

1 million-square-foot headquarters north of Gulch; hiring begins in 2019

Nashville Ledger

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Amazon today announced that 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. It will be located in downtown Nashville as part of a new development site just north of The Gulch. Hiring will begin in 2019.

Amazon’s investment, the company states, will include:

  • 5,000 full-time, high-paying jobs
  • More than $230 million in investment
  • One million square feet of energy-efficient office space
  • Estimated incremental tax revenue of more than $1 billion over the next 10 years from Amazon’s investment and job creation.

Amazon will receive performance-based direct incentives of up to $102 million based on the company creating 5,000 jobs with an average wage of over $150,000 in Nashville.

This includes:

  • A cash grant for capital expenditures from the state of Tennessee of $65 million based on the company creating 5,000 jobs over the next 7 years, which is equivalent to $13,000 per job
  • A cash grant from the city of Nashville of up to $15 million based on $500 for each job created over the next 7 years
  • A job tax credit to offset franchise and excise taxes from the state of Tennessee of $21.7 million based on $4,500 per new job over the next 7 years.

“We want to thank Amazon for its continued investment in the state of Tennessee and are excited about the additional 5,000 corporate jobs they will be creating in Nashville,” Gov. Bill Haslam said. “It has never been clearer that Tennessee is a great place to do business, and we continue to attract a wide variety of global companies that provide high-paying, quality jobs for our residents.”

“Amazon’s decision to expand its presence in Nashville is a direct result of the talented workforce and strong community we’ve built here,” Mayor David Briley said. “These are quality, high-paying jobs that will boost our economy, provide our workers with new opportunities, and show the rest of the world that Nashville is a premiere location for business investment. We thank Amazon for investing in Nashville, and we look forward to welcoming them to this community.”

“It’s a testament to the vitality of the region’s economy that an industry leader such as Amazon has chosen Nashville for its new Operations Center of Excellence,” said Ralph Schulz, president and CEO of the Nashville Area Chamber of Commerce. “Nashville’s unique vibe, in-migration trends and strong business growth helped set us apart as a top 20 city for Amazon’s HQ2. Ultimately, being selected as a finalist opened the opportunity for Nashville to be chosen for this significant operation – a historic win for our region.”

“We are looking forward to joining the community and are excited to be creating high-paying jobs in Nashville. Our new Operations Center of Excellence will become the Eastern U.S. hub for our Retail Operations division,” said Holly Sullivan, Amazon Public Policy.

The Chamber served as the project leader, coordinating the Nashville response with its regional partners, including the Nashville Mayor’s Office, the State of Tennessee’s Department of Economic and Community Development and Tennessee Valley Authority, among others.

“We are grateful for Amazon’s significant investment in our region and look forward to supporting the company as they grow their presence here,” said Courtney Ross, chief economic development officer for the Chamber. “We’re also thankful for the collaboration and support of our Partnership 2020 regional partners and other team members throughout this process. Being among the top 20 HQ2 finalists was a critical step, and we’re proud of our economic development team and partners for positioning us well every step of the way.”

The news comes as the online giant announced it will split its second headquarters between Long Island City in New York and Crystal City in northern Virginia.

The online retailer is expected to make an official announcement later Tuesday.

The decision would end an intense competition between North American cities to win Amazon and its promise of 50,000 new jobs. Some locations tried to stand out with stunts, but Amazon made clear that it really wanted incentives, like tax breaks and grants. The company received 238 proposals before narrowing the list to 20 in January.

Long Island City and Crystal City would meet Amazon's other requirements: be near a metropolitan area with more than a million people; be within 45 minutes of an international airport; have direct access to mass transit; and have room to expand. Amazon also wants to able to attract top technical talent and be able to expand the headquarters.

Rapidly growing Long Island City, in the borough of Queens, is an old manufacturing area where warehouses are being replaced with apartment-filled glass towers.

And Crystal City, across from the nation's capital, is made up of 1980s-era office towers. The area is trying to revive itself after thousands of federal jobs moved elsewhere.

In setting off the flurry of interest, Amazon said it could spend more than $5 billion to build its second headquarters over the next 17 years.

But splitting the second headquarters between Long Island City and Crystal City would beg the question of whether the new locations would be headquarters at all. It's unclear where Amazon's executives — such as CEO and founder Jeff Bezos — would spend much of their time. If each location gets 25,000 jobs, that would make it smaller than Seattle's, which houses more than 40,000 workers.

Nonetheless, the extra space will help the rapidly growing company . Launched in 1995 as an online bookstore, Amazon now produces movies, makes voice-activated Echo devices, runs the Whole Foods grocery chain, offers online services to businesses and designs its own brands of furniture, clothing and diapers.

Amazon's employee total has ballooned to more than 610,000 worldwide, and that's expected to increase as it builds more warehouses across the country to keep up with online orders. The company recently announced that it would pay all its workers at least $15 an hour, but the employees at its second headquarters will be paid a lot more — Amazon says they'll make an average of more than $100,000 a year.

The Associated Press and Business Wire contributed to this report.

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