Amazon HQ2. Where does it end up?

STM317 said:

John Welsh said:

In reply to The0retical :

The cynic in me suspects this means "take ALL the money from two cities and deliver HALF the promise."

The truly cynical individual could say that NYC and DC were predetermined landing spots and that the search was just a way to keep Amazon in the news for a year, while simultaneously gathering tremendously valuable data from major cities across the country as they put their cards on the table regarding possible incentives, future infrastructure and spending plans, etc. This information is stuff that Amazon's competition doesn't know and Amazon can exploit on their quest to profit from every aspect of our lives.

I guess I'm super cynical, because while I hadn't thought of that, that makes perfect sense given the knowledge that those two locations already had the largest concentration of workers outside of California and Seattle.

californiamilleghia said:

Texas , they talked Toyota to move there from the Los Angeles area , 

 

Oddly the move of Toyota from California also caused them to reverse plans to leave Ann arbor, mi instead they are increasing their footprint. 

From a facility strategy and employment resource plan it makes sense to diversify your pool of employees and not recreate the Seattle situation or over saturating a city's real property. 

Don't blame any company for cities and states being stupid and idiotic. If everyone of the cities gave no concession on taxes or fees then Amazon would just have to choose between them. What else could Amazon do? Nothing but make a choice. 

The other reason for two cities is to spread your political impact. Having jobs in as many congressional districts as possible and cover both parties immunizes your business from being targeted by either side. 

It would be nice if Amazon was trying to follow some Japanese company strategies by actually trying to benefit a city as they have a philosophy that good schools and neighborhoods and active public life equals good workers and the ability to attract good workers. Robbing a city does the opposite.

GameboyRMH said:

I almost think the whole HQ competition is half about making the decision not appear to be somewhat of a foregone conclusion restricted to those places, and half to see if any city could convince them to make an unconventional choice with tax incentives, just for giggles.

Hah, turns out I was almost right, I was only wrong about WHY it was a foregone conclusion:

https://www.recode.net/2018/11/9/18077342/amazon-hq2-headquarters-jeff-bezos-dc-ny-virginia-long-island-kara-swisher-scott-galloway

The two locations chosen are within convenient driving distance of Bezos' houses. This whole thing was a charade to maximize government concessions for Amazon.

NY, state and city just out spent everybody else.   17+billion I heard.  

A lot of Long Island City citizens are unhappy.

I think something like $48,000 per job in the NYC location in incentives, that's mind blowing the most valuable company on earth can get away with that.

Stephanie Ruhle of MSNBC put it best:

Why did you do this massive search with all these cities if you’re going to pick New York City? Is that honest shopping? If I’m Baltimore right now? Come on now! So the richest man in modern history said to cities across America, ‘Dance!’ And they did.

In reply to The0retical :

That’s pretty much it in a nutshell. There is so much wrong in this deal it should be criminal. The governor and mayor both sidestepped their respective representatives to avoid chance at this being shot down or any of the details going public.  Almost every business that left NY has said taxes were their number on reason for leaving and now they’re cutting Amazon a huge break to move here.  If we can afford it for them why not the smaller businesses already here struggling to stay open? 

One good thing to come out of this is we’ll get a new sign for our building proclaiming “Hon. Amazon Cuomo, Governor”

In reply to The0retical :

The funny thing is there was some rhetoric in some of the original articles that they wanted to lower the cost of living to the employees. instead they selected 2 of the only about 4 markets more expensive than Seattle. Shoot, That's why I turned down an offer from them last year. Salary vs COL scale was really off.  

Glad they did not come to Los Angeles ,  but wish they had gone for a mid size city where the workers would get ahead and not spend the higher pay on expenses, 

Amazon wins again....

In reply to bmw88rider :

What irritates me is that Amazon created a false market to pull incentives out of the two already chosen markets while simultaneous wasting hundreds of municipalities time and resources that could have been put to better use.

Not only that, but now many municipalities are wrapped up in lawsuits to divulge what the offers to Amazon were in the first place wasting even more public resources.

This is seriously the most self interested thing that they could have done and nakedly shows the outsized influence big corporations have on government. I understand incentives are sometimes necessary to keep business in the area or foster a diverse range of industries in an area (which is why I may not like incentive packages but I'm not in favor of outright banning them), but watching muni's lick Amazon's boots this time around was a special kind of disgusting considering the result.

So, is there yet a nationwide call to boycott Amazon? 

... Right before the Christmas buying season? 

Personally, I'm glad Amazon didn't bite on Philly's $5.5B incentive bid.   I don't believe the economic impact is worth that level of public investment. At least not that type of investment.  

In reply to Ian F :

I agree completely about Pittsburgh. It seems like the only people disappointed about pgh not getting it are the newspapers, who are just trying to suggest Pittsburgh isn't "progressive" enough, instead of not being convenient enough for Bezos. But with Pittsburgh's mayor trying to set himself up for a national office run, it's easy to see why they pushed it so hard. 

This whole thing was a charade from the beginning, and our broke ass state really has no business offering a trillion dollar company 5 billion in tax breaks, not when we haven't had a solid budget in almost a decade. 

John Welsh said:

So, is there yet a nationwide call to boycott Amazon? 

... Right before the Christmas buying season? 

If people reading about the horrendous conditions, crummy pay, high rate of turnover, and generally just other crummy business practices.............this isn't going to do it.

Just like the raise to $15/hr, they did that by taking away pay from other people. 

Wally said:

In reply to The0retical :

That’s pretty much it in a nutshell. There is so much wrong in this deal it should be criminal. The governor and mayor both sidestepped their respective representatives to avoid chance at this being shot down or any of the details going public.  Almost every business that left NY has said taxes were their number on reason for leaving and now they’re cutting Amazon a huge break to move here.  If we can afford it for them why not the smaller businesses already here struggling to stay open? 

Hm, so what you're saying is, if cutting taxes to get Amazon jobs works, they should consider cutting all business taxes? I'm down with that :)

John Welsh said:

So, is there yet a nationwide call to boycott Amazon? 

... Right before the Christmas buying season? 

Ever since the situation here in the Lehigh Valley I linked earlier in the thread came to light (Amazon won't spring for AC in the warehouses but they'll be more than happy to have the Muni's station extra ambulances at the warehouses) I've been drawing back as much as possible from buying anything from them.

z31maniac said:

I think something like $48,000 per job in the NYC location in incentives, that's mind blowing the most valuable company on earth can get away with that.

Is that per year or one-time fee? 

Because if it is a one-time fee that feels like a great deal for NYC. NYC has a city income tax of 3-4% and a sales tax of 4.5%. So, if they pay $48k for a $100k job, NYC makes $5.25k per year(1). That's almost an 11% ROI investment, not too shabby! And that is not including any corporate taxes amazon will pay the city, nor does it include the effect of increasing demand on real-estate in the city (both commercial and residential) that helps drive prices (and therefore property taxes) up. 

As far as amazon "making" everyone dance - I guess I don't see the harm in fostering competition between municipalities. Sure it can feel kind of misleading to say: "let's see what Detroit can deliver" when Amazon is already 99.5% sure it's not going to Detroit, but would it be worse if amazon just never even gave anyone else the chance?

(1) 100k * 3% income = 3k per year, and assume about 50k of the income is spent in NYC so sales tax of 50k * 4.5% = 2.25k

In reply to Robbie :

The issue I take with it is that, by all appearances, the "contest" was started in bad faith.

If Amazon was going to go to those locations in the first place they probably could have obtained a similar or close to similar deal by pulling Cuomo and Bowser aside and asking for it. There was no need to waste the resources and stage the spectacle that they did. It may not be "wrong" legally speaking but the optics are pretty bad.

Now, if the $48k is a one time fee (or amortized over the length of time Amazon gets a tax break for) it's still a pretty good deal on a per job basis. Providing of course that they are new jobs and not just cannibalizing the talent already located in those areas. That remains to be seen.

Going to add on rather than edit.

The other issue is that the selection team and Mr. Bezos were out talking about affordability of areas, cost of living quotes, and access to talent pools (as well as incentives x27 times) then just ignored those criteria in favor of two areas which have a higher cost of living than Seattle.

Again, optics are bad on that one because it incentivized the waste of resources to smaller muni's because "Well, we might have a shot even though we may only have 1 top 100 engineering college nearby. But our cost of living is pretty low."

Additionally Amazon now has a very detailed set of demographics and knowledge of the willingness to negotiate, including potential incentive starting points, for other projects. That's not evil but it was gathered in bad faith.

The0retical said:

In reply to Robbie :

The issue I take with it is that, by all appearances, the "contest" was started in bad faith.

I definitely understand this feeling. But I don't think it addresses my question. 

Which is worse: Giving a city a shot when you are 99.5% sure they will fail, or not giving them a shot at all?

Maybe change the scenario: Should I give the guy without a college degree an interview? Or should I just do him a "favor" and save him some time?

Robbie said:

The0retical said:

In reply to Robbie :

The issue I take with it is that, by all appearances, the "contest" was started in bad faith.

I definitely understand this feeling. But I don't think it addresses my question. 

Which is worse: Giving a city a shot when you are 99.5% sure they will fail, or not giving them a shot at all?

Maybe change the scenario: Should I give the guy without a college degree an interview? Or should I just do him a "favor" and save him some time?

I think the difference is that you assume any of the cities besides 4-5 had anything more than an absolute ZERO PERCENT chance of getting it. And it turned into another data mining grab for them. 

I think that's where me and Theoretical and you are looking at it differently.

Robbie said:

The0retical said:

In reply to Robbie :

The issue I take with it is that, by all appearances, the "contest" was started in bad faith.

I definitely understand this feeling. But I don't think it addresses my question. 

Which is worse: Giving a city a shot when you are 99.5% sure they will fail, or not giving them a shot at all?

Maybe change the scenario: Should I give the guy without a college degree an interview? Or should I just do him a "favor" and save him some time?

What if it costs the guy without a college degree $100 to apply for the job? Is it ok to let him think he's got the same shot as pretty much everybody else because you say you want "experience" or somebody who's "teachable" or some other intangible, but all you're really looking for is that degree? What if the job is supposed to pay $200k/yr, but during the hiring process, it's determined that a single person can't realistically perform the job so it will be 2 $100k jobs instead? 

These municipalities spent significant resources putting these bids together and wooing the company. If they had known just how long the odds were, or that the payoff was only going to be half of what was initially stated, would they still have spent those resources?

Fair enough, but as the lottery continually proves, humans in general would rather have a chance (sometimes spending lots of money and effort) even when they know the odds are effectively zero.

I agree that if Amazon purposely manipulated (ie lied directly to a municipality - and I agree it feels like they did) to get information, then that's shady. 

But telling someone they have a shot at winning the lottery if they buy a ticket can be considered both true and a direct lie depending on what you believe.

In reply to Robbie :

Sorry it took me 3 hours to drive somewhere I could stop for the night. I'm not making it home. No one has snow tires on except me apparently and there's 6 inches of snow on the road. 4 High in an Xterra is an amazing thing.

Honest answer, most of the municipalities would have done it anyway. But at least then Amazon would have been up front about it.

A "change my mind" RFP is written in a totally different manner than this one was. There was no indication that the chosen cities were forgone conclusions, however the criteria laid out doesn't match the locations chosen. Again there may not have been malice but the optics are bad.

Municipalities were given a set of criteria which made them believe they may have a chance. The bids were made on that information. The result appears doesn't appear to match the request which is what annoys onlookers. 

At the end of the day I'm just a guy on the internet with an opinion that fills out a whole lot of RFPs. It's possible NYC and DC do meet the criteria from the point of view of the people who are currently looking for permanent housing in San Francisco and Seattle but a large number of on lookers lookers disagree.

I'm pretty sure they could have done better than this. Splitting the HQs while still demanding the full incentive is only something Amazon, Google, or Apple could do right at the moment. Frankly I wouldn't stand for it on one of my projects.