Amazon Announces 2,000 Tech Jobs Coming to Boston

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Aaron Nicodemus

Amazon.com Inc. has officially announced its plans to add 2,000 technology jobs in Boston by 2021.

This isn’t Amazon’s second national headquarters (HQ2) with its anticipated 50,000 jobs, although Boston is still one of 20 cities in the running to land the Seattle-based retail giant’s second headquarters.

The city of Boston and WS Development recently finalized a $5 million tax break for the property, spread out over 15 years. An additional $5 million tax break will be enacted if Amazon brings in 2,000 more employees to offices located within 25 miles of the city, all within Massachusetts. WS Development may house some of these new jobs in a separate office tower at the site.

The jobs announced May 1 represent an expansion of Amazon’s Boston Tech Hub in fields including machine learning, speech science, cloud computing, and robotics engineering, according to a company news release. Amazon’s tech teams in the Boston metropolitan area focus primarily on company products Alexa, Amazon Web Services, and Audible.

“In particular, the Boston-based machine learning scientists and engineers contribute to enhancing the experience of customers interacting with Alexa, leading the industry in its shift toward conversational artificial intelligence through cutting-edge research and development in machine learning,” the company said.

The Boston Tech Hub is currently located in Cambridge, Mass., one of more than a dozen such offices nationwide, Amazon said. The company has tech-hub-related offices in Boston’s Back Bay and Fort Point neighborhoods; the Amazon Robotics development center in North Reading, Mass.; and a million-square-foot warehouse/fulfillment center on the border of Freetown and Fall River, Mass.

Amazon has created 3,500 jobs in Massachusetts since 2011, the company said.

‘Consolation Prize’

Amazon will occupy 430,000 square feet—floors 3 through 17—in an 18-story office tower planned for Boston’s Seaport District, to be built by WS Development. The site of the development is a parking lot, formerly a rail yard that served the port of Boston. Construction of the office tower is planned to begin later this year, and the building is scheduled to open in 2021.

Getting 2,000 jobs is a “consolation prize” for Boston, said Paul Rafelson, a Pace University law professor. He thinks HQ2 will be built in Newark, N.J., with its cheap available land, its international airport, and its proximity to New York City. Boston is just too expensive for the type of campus setting Amazon is imagining, he said.

“It’s really been a brilliant play. Amazon saw everyone’s best and final offer” when cities handed over detailed incentive packages to lure HQ2, he told Bloomberg Tax. Corporations have been picking winning and losing cities for expansion “forever,” he said, “just not usually with as much publicity.”

To contact the reporter on this story: Aaron Nicodemus in Boston at anicodemus@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

Copyright © 2018 Tax Management Inc. All Rights Reserved.

Request Daily Tax Report: State