It seems Amazon finally chose the two locations for her new main building: Queens, New York and Arlington, Virginia.
The company has not yet officially announced its decision, but news on HQ2 sites began to leak out last week. The Wall Street Journal reported on Monday that instead of a city, Amazon would divide the HQ2 between two locations. A few hours later, the New York Times followed a report that the company "is approaching offers" in Long Island City neighborhood of Queens and Crystal City neighborhood of Arlington, suburb of Washington, DC.
More than 200 local and state governments have submitted proposals to estimate Amazon last year after the company announced that it was looking for a North American city to house its central center of $ 5 billion, 50,000 workers, a second center outside its headquarters her in Seattle. Some cities promised the company millions of dollars in tax breaks and other incentives.
New York, for its part, claimed that it had not offered Amazon additional incentives. New York governor Andrew Cuomo, however, offered Amazon a package of benefits that is not yet revealed. Meanwhile, Virginia hired McKinsey & Co. to draw up its proposal, which has not yet been released publicly.
The road to HQ2
Amazon first asked local and state governments to submit proposals for HQ2 in September 2017, noting that municipalities with more than 1 million inhabitants and a "stable, business-friendly environment" will walk alongside those with strong public transit systems and large airports with direct flights to and from Seattle.
"We expect HQ2 to be exactly the same as Seattle Headquarters," said CEO Jeff Bezos in a statement at the time. "The Amazon HQ2 will bring billions of dollars in preliminary and ongoing investments and tens of thousands of high pay jobs."
Hundreds of cities, from New York to Gary, Indiana, jumped on the occasion for their potential to boost the local economy and the labor market. A new Amazon headquarters would create 50,000 new jobs in the selected city, which means a larger tax base and opportunities for further economic growth. And that's just jobs at Amazon: Construction crews will need to build the new campus of the company or renovate an existing structure and all these Amazon employees will need places to eat and shop.
A total of 238 cities and states have come up with proposals. Some, including Detroit, Las Vegas and Pittsburgh, have created videos that explain why it was the right choice. Orlando had more than one.
Amazon announced its 20 finalists in January. The list includes some obvious contenders, such as New York and Chicago, as well as some less likely choices like Indianapolis and Dallas.
Some of these cities tried to attract the company with huge financial incentives.
A letter received from the Chicago Tribune revealed that Illinois, mayor Rahm Emanuel and city leaders promised Amazon $ 2 billion in privileges, including $ 1.32 billion in EDGE tax credits – subsidies for companies promising to create jobs as well as $ 172.5 million in government sales tax and utility exemptions and $ 61.4 million in real estate tax rebates. The largest of these incentives, EDGE credits, would amount to 50% of employees' income tax deductions, Tribune said.
New Jersey offered Amazon $ 5 billion in incentives, as well as another $ 2 billion from Newark – the company's second-largest public offering, according to CityLab. Maryland has made an even bigger bid: $ 8.5 billion in subsidies and infrastructure funding, as reported by Baltimore Sun, in addition to an incentive package not revealed by Montgomery County.
"I do everything I can," Cuomo told reporters when he was asked about his administration's efforts to win the Amazon. "I will change my name to Amazon Cuomo if that's what it takes, because it would be a great economic boost."
Was the competitive selection process of HQ2 a very popular lease?
Some experts argued that the massively excessive selection process was overwhelmed from the beginning and that Amazon knew where he wanted to locate his HQ2 throughout. Scott Galloway, a professor at NYU Stern School of Business, said the same month at Commode Code Commerce last month when he predicted Amazon would choose – and always plans to choose – Washington, DC, but has allowed cities to compete in order to gain more motivation from both the selected city and its competitors.
"The Amazon has played an important role in the HQ2 process and essentially created a game that will result in the transfer of wealth from municipalities – fireplaces, schools and police forces – to Amazon shareholders," said Galloway. "I think it is a [ruse]. I believe they have no intention of being in any of these [other] 18 cities. I think this game was over before it started. "
Co-founder of CityLab and Professor Richard of Florida at the University of Toronto also said in May that the Amazon always knew what would be the place for his second headquarters. "Like all corporate selection centers, the HQ2 process is a game without cassettes, where the company knows the answer in advance and creates a fictitious contest to win the maximum motivation," Florida wrote. "What is happening is bigger than looking for a second home, it's about the company's continued expansion in North America."
The HQ2 process, he said, was a way for Amazon to gather information about locations across the country – not a genuine competition for a new headquarters – to have information on where to place new distribution or logistics centers. He called it a "highly cynical exercise in corporate placement strategy" and may be right.
In May, the Wall Street Journal reported that the Amazon had begun to call cities whose HQ2 proposals had been rejected to tell them why they had not been chosen – and some of these cities receive the Amazon's suggestions in the heart. Cincinnati, for example, responded to Amazon's criticism that he did not have enough local technological talent, redefining the high school apprenticeship program in information technology. Orlando, who reportedly received similar criticism, believing that it would launch a community development fund to invest in local technology companies. Detroit seeks ways to boost its public transit, responding to the loss of Amazon's offer.
What does this mean for the winner?
It is likely that despite the towns and the wreaths that passed to show Amazon that it was worthy to be chosen as the home of HQ2, the company knew what it wanted to do all along. In the case of New York and Virginia, all this could mean that any additional employees offered may be at the expense of long-term residents.
In May, Vox's Matt Yglesias wrote that the Amazon's promise of 50,000 jobs may not be as polite as it may seem. Instead of creating jobs that need "people who really need help", ie underprivileged and low-skilled workers, the Amazon's presence will probably lead to an increase in well-designed staff, even farther.
It is almost impossible to overestimate the results of Amazon's presence in the Seattle housing market, which hosts more than 45,000 company employees. Amazon's high-paid employees in the city have contributed to steadily rising property prices in the city and its outlying suburbs, causing housing costs to rise and leading to the displacement of low-income families. In 2015, King County declared a state of emergency for the homeless. conditions have improved little since then and local lawmakers have repeatedly highlighted the lack of affordable housing in the city as the main culprit in homelessness. Household prices in the city have increased by 70% since 2011, according to a Guardian report, while rents have risen along with them. Traffic is also a concern. Seattle faces an extra burden on the city's public transport system.
What remains to be seen is the type of impact that HQ2 will have on New York and Arlington, and if the cities will take steps to protect their residents from the presence of the Amazon.