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Pedestrians walk past the Amazon Go store in Seattle on Jan. 17, 2018.
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Amazon won't reopen HQ2 search but Pittsburgh may still benefit

Mike Kane/Bloomberg

Amazon won't reopen HQ2 search but Pittsburgh may still benefit

Battered by local opposition, Amazon dumped plans Thursday to build its second headquarters in New York. While the Seattle company does not plan to reopen its HQ2 search, Pittsburgh may still benefit.

In a statement, the e-commerce giant described the decision to ditch the project — which would have brought at estimated 25,000 jobs to the Long Island City neighborhood — as disappointing.

"For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long term," the company stated.

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"While polls show that 70 percent of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City."

Amazon's tech hub at SouthSide Works in the South Side
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At the same time, Amazon stated that it does not intend to reopen the HQ2 search "at this time." Pittsburgh was one of the 20 finalists for the coveted economic development prize, with its initial promise of 50,000 jobs and $5 billion in investment.

The online retailer ended up splitting the headquarters — with northern Virginia and Long Island City each getting half of the jobs.

Amazon, in its statement Thursday, reported that it will proceed with the northern Virginia headquarters and a smaller operations center in Nashville that involves 5,000 jobs and $230 million in investment.

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The company also stated that it "will continue to hire and grow across our corporate offices and tech hubs in the U.S. and Canada."

That could be good news for Pittsburgh, since Amazon has a tech hub at SouthSide Works in the South Side that employs more than 80 engineers who work on the company's popular Alexa voice technology and machine learning.

Allegheny County Executive Rich Fitzgerald said he expects Amazon to continue to expand that facility and grow in the region.

"They're going to grow here. We're excited about that. It's not like we're going to see 25,000 jobs. I don't think it's going to go to one city. I think it's going to go to a lot of cities," he said.

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Pittsburgh Mayor Bill Peduto said Thursday night that it would be “very smart” on Amazon’s part to branch out in his city.

“Over past 2 years, Amazon has invested in Pittsburgh. Over 80 jobs (last count) in South Side working on Alexa & automation. I think they would be very smart to continue to build out their presence here, with an expansion of their present campus,” the mayor said in a tweet.

Mr. Fitzgerald said the region's strong tech ecosystem, its quality of life, affordability, tech talent, and the presence of Carnegie Mellon University and other major colleges make expansion a strong possibility.

"I think obviously we will be in the mix," he said.

Stefani Pashman, CEO, Allegheny Conference on Community Development, was also happy to hear that Pittsburgh might see its Amazon presence increase. 

“We value the fact that Amazon is already a part of the Pittsburgh region’s business landscape, and we look forward to the company continuing to grow organically here,” she said in an emailed statement.

Should Amazon reopen the HQ2 search, Mr. Fitzgerald would not be hesitant to join the chase.

"If there's an opportunity that benefits the region, yes, I would go after it," he said.

In its losing bid for Amazon, the region offered $9.7 billion in incentives, including $4.6 billion in state subsidies. The bid also involved $4.2 billion in local subsidies generated mainly through taxes on Amazon employees; as much as $716 million in tax increment and similar transit-oriented financing; and up to $222 million in parking tax diversions.

Mr. Fitzgerald and other officials have said the money would not have gone directly to Amazon but to address needs to support the influx of employees. That would have included affordable housing, transportation, including a possible light rail extension, workforce development and infrastructure.

Local leaders also offered to build a business-class, high-speed transit connection between HQ2, Downtown and Pittsburgh International Airport using the West Busway and "shoulder-running transit options" as well as possible dedicated space at the airport.

Mark Belko: mbelko@post-gazette.com or 412-263-1262.

Updated at 4 p.m. Feb. 14, 2019

 

First Published: February 14, 2019, 6:22 p.m.

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