Just today it was announced that Amazon has ended all plans to continue with developing its second headquarters (HQ2) campus in New York. After facing weeks of complaints and aggressive questioning from locals online, in public, and in-person the Mega-Corporation has decided the $3 billion in subsidies and access to New York’s rising tech industry are simply not worth the harassment. This is only the latest in the long saga that is the creation of Amazon’s HQ2 that began in late 2017 with the promise of 50,000 (wow!) new jobs and plans to spend $5 billion dollars on local construction wherever they decided to settle HQ2. Amazon requested cities around the US offer what benefits or other gifts they were willing to grant Amazon in exchange for becoming the home of HQ2. Over 200 cities put in requests to host HQ2. One town in Georgia even offered to build an entire new city called “Amazon”! But, the crux of Amazon’s announcement was a deep interest in the offering of “incentives”, i.e tax breaks, subsidies (ex. grants in exchange for each job created), and tax credits. New Jersey broke a world record with a tax break package offering of $7 billion dollars!
After much deliberation, and an embarrassing number of awkward videos of mayors saying why they’re great for Amazon (https://youtu.be/8bl19RoR7lc?t=232), the final winners were New York and Arlington, Virginia near Washington D.C. Both of which are rising tech hubs. The promised 50,000 jobs were now being split between these two locations but that is not what angered New Yorkers.
New Yorker complaints were based on the growing movement for taxing corporations in the US as seen by the Bernie Sanders presidential campaign and the rising Democratic Party star Representative Alexandria Ocasio-Cortez who take aggressive issue with what they perceived as “corporate welfare” and the continued accumulation of economic and political power within corporations. A very real subject of debate. For example, in Seattle, home of Amazon’s main headquarters, the company has gained enough sway to halt Seattle city council plans to tax the company in order to help with its homelessness and affordable housing problems by threatening to freeze its own local growth and the benefits (employment, taxes, local business patronage, etc. ) that come with that.
Overall, while this may be big news and rather surprising, that this saga could end with one of the winners of this assumedly prestigious opportunity would reject it, it is hard to deem it much of a loss. Amazon said itself it had been planning to continue expanding operations within New York through the 5,000 employees already there, regardless of the presence of any incentives. Amazon’s actions also act as a stress test for what economic impacts and muscle flexing people are willing to accept. Amazon is a company built upon big data and utilizing and learning from its experiences, and this hard rebuff will likely see Amazon be more nuanced and effective in future endeavors. It is already restructuring itself and the resources that were to be dedicated to New York back into its hundreds of other locations nationwide. Only time will tell what will be the next stage of this saga as HQ2 in Arlington welcomes waves of investors and goes all-in.
