Amazon is purposely close to choosing the winner of its second headquarters project, known as HQ2. Or should I say…
Amazon is purposely close to choosing the winner of its second headquarters project, known as HQ2.
Or should I say “winner”?
It appears that the New York Times is right that Amazon is close to agreeing to share its HQ2 project between two cities: New York City and Arlington, Virginia. As a result, the two cities will receive a not yet known part of the 50,000 employees and $ 5 billion investment that Amazon promised to the winner of the project.
Wait, huh? It was not part of the plan.
If Amazon chooses two cities for HQ2, as reported, everything that Amazon promised through the window goes. What makes this different from Amazon’s presence in other cities where it has offices like Boston or Los Angeles?
Will the company refer to both sides, which are hundreds of miles apart, like HQ2? Or should we just think of HQ2 as the entire east coast ̵
1; which city or city is available from Amtrak’s Acela service between New York and Washington, DC.
In fact, Amazon already has a large number of employees in both the DC area and New York City. The Times says it’s the largest number of employees outside Seattle, and it employs thousands of workers in every city.
Is not Amazon meaningful of the word “headquarters” here? What is the difference between having a big satellite office in a city and what Amazon intends to call a “headquarters”.
It may be a difference for Amazon employees, but it is unlikely that it is the case for the taxpayer public – which will be a major part of the bill thanks to the tax incentives Amazon requires. People are furious about Amazons reported decision to divide their HQ2 between New York City and Virginia after months of deliberation
Critics of Amazons elongated HQ2 selection process already questioned that a ” other headquarters “could even exist. Divide the project into two major cities of equal size just giving more fuel to the argument that the whole process was a trick to pit cities against each other to maximize incentives.
It also violates Amazon’s original mandate for the project that HQ2 would be “fully equivalent” to the company’s headquarters in Seattle. If it is separate it is not equal.
Amazon raised its HQ2 investment so much that the cities were willing to do anything for the chance to land it. Amazon probably assumed at least that in its calculation, and when it realized that it would be easier to count the cities as not hoped for the chance to get Amazon in the backyard, the strategy went to maximizing profits.
While we do not yet know what tax incentives were offered for Amazon to choose these two cities, or what Amazon offered in return, we can surely assume that it amounted to billions.
City leaders and government leaders jumped at the chance of what they saw as a high-profile profit – and obvious benefits that the constituents would see and appreciate. The ups and downs of local communities and governments – economic or different – are now not as readily apparent.
If Amazon can get rid of essentially digging Virginia and New York out of millions in tax revenues and not even offering in return what they originally promised, what more can they do?