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Speculation over Amazons HQ2 elections seizes investors

Amazon will report the results for the third quarter on Thursday, but investors are eagerly awaiting a larger announcement from…

Amazon will report the results for the third quarter on Thursday, but investors are eagerly awaiting a larger announcement from Seattle in the next few weeks.

The E-Commerce War said it would reveal its choice of where to find its second headquarters by the end of the year, finish a high-profile competition across the United States and Canada at a price that will bring billions of dollars in investment and tens of thousands of jobs to it winning city.

Amazon and the 20 cities on its short list have been tight about the bidding process. However, it has not hampered speculation about the city leading the package, ranging from Amazon’s Super Bowl ad and job list, to the airline record of chief executive Jeff Bezo’s private jet that spokes rumors.

What is HQ2?

] In September 201

7, Amazon offered a second home, dubbed HQ2, which would be “fully equivalent” to its headquarters in Seattle.

The company said it would spend at least $ 5 billion to build a website that would eventually accommodate 50,000 employees. The construction and operation would also “create tens of thousands of additional jobs and tens of billions of dollars in further investment in the surrounding community,” said Amazon.

Amazon is looking for a place with lots of local technical talents, a strong university, access to an international airport and perhaps most critical “a stable and business-friendly environment and tax structure”.

After receiving 238 answers to his first call, the Amazon list dropped to 20 finalists in January, ranging from major cities like New York and Los Angeles to regional challengers like Raleigh, North Carolina and Austin, Texas.

Why does Amazon go with this?

The HQ2 search acknowledges that Amazon’s next growth phase can not be absorbed by its hometown of Seattle.

Amazon was born in Jeff Bezo’s garage in 1994 but moved to Seattle shortly after. Its rapid expansion has transformed the South Lake Union and Denny Triangle blocks from parking lots and stocked into a forest with shiny high-rise buildings.

As Amazon’s Seattle staff has swung to over 40,000, its footprints have been expanded to 10m square feet – more than 40 of the 40 nearest 40 employers in the city, according to a 2017 Seattle Times analysis.

How has Amazon changed Seattle?

The company’s success has strengthened the city’s economy and attracted a new generation of technology workers and companies.

“Amazon is magnetic to talent,” said Jeff Shulman, marketing professor at the University of Washington Business School, hosting a podcast about the city’s latest boom.

But it has also pushed housing prices and commercial rents to the horror of many local residents – a lesson that officials and residents of the winning city of HQ2 must remember.

“It’s hard not to love much of what’s happening to the city, as it becomes more viable and tight and transitory-oriented,” says David Rolf, a long-term Seattle workforce. But “for the people priced, the teachers, the firemen, the home nurses, the long-shore men, hospital workers … the question is how can you handle growth in a way that’s inclusive?”

What does cities offer?

Amazon has kept details of its decision making under wraps. The finalist cities have also, due to non-disclosure agreements, Amazon demanded that they write.

Many cities have been able to bid privately because the economic development teams and public-private partnerships that put them together are not subject to the freedom of information inquiries. In some cases, local officials also do not know what their cities and states have promised.

But much attention has focused on how much the cities are trembling in tax breaks and other subsidies, both because Amazon said such incentives would be “important factors”

© Mark Summerfield / Alamy

The biggest offer published comes from Maryland where officials proposed a package of tax credits and infrastructure improvements worth as much as $ 8.5 billion if Amazon chooses a place in Montgomery County, just outside of Washington, DC.

Multi-dollar Inductions are also added to the Newark, New Jersey, where state officials have promised $ 7 billion in tax breaks. Chicago, Illinois and Columbus, Ohio, have each proposed more than $ 2 billion incentives.

Who are leading runners?

Financial sweeteners are expected to play a role in Amazon choice, given its long history of tax optimization. But other factors also play a role, and many have r sliced ​​and cut the Amazon’s list of preferences to wonder which city is best suited to the bill.

“Incentives are overrated in the HQ2 call,” said Jason Horwitz, Director of Public Policy and Economic Analysis at Anderson Economic Group, a consulting company. “I think what Amazon is looking for is a place where they can attract the world’s best talent for the next 40-50 years.”

Anderson’s index ranking factors are included in Amazon’s proposal for proposals, such as easy transportation and the cost of doing business, adding New York City to the top of the list – a result deemed unlikely by many observers.

Based on housing market and quality of life, Raleigh, North Carolina, peaked a separate list of ATTOM Data Solutions, a real estate database. A stockpicking artificial intelligence system at Wells Fargo picked Boston as the most likely candidate based on publicly available data.

Boston is in the driver’s seat to be the site of Amazon’s HQ2, according to Paddy Power © iStock

Data analysis aside, the strongest speculation in Washington DC or the two nearby suburban areas on Amazon’s shortlist, Northern Virginia and Montgomery County, Maryland. Northern Virginia tops betting odds at the Bovada playground, while Paddy Power gives Boston the best shot.

Why is DC a favorite?

The DC area has some great advantages to its advantage. It would bring Amazon near the seat of the government at a time when the regular control of its business increases. The company has already gathered the largest lobby company in any technology company in Washington.

“What is necessary for a large company to be present in Washington DC,” said Susan Wachter, a property and finance professor at the University of Pennsylvania Wharton School.

DC may also appeal to Bezos on a personal level. It is home to the Washington Post, the newspaper he bought in 2013, and last year he paid $ 23 million to the city’s largest private house.

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