"That means that what Amazon is really looking for is something else: that special something."
Massive tax breaks and giveaways. That's all this is about. It's a dog and pony show to see who will fork up the most to buy in to the delusion that it will pay off somehow.
That's what I suspect. Ask for all these things, and then wait for states and municipalities to say "Well, we don't have all of those, but here are a massive tax breaks in return".
It's sad watching cities fall over themselves to give Amazon (a half a trillion dollar company) a handout. Handouts no one can afford.
> (but where cities take the hit if the company town fails)
As a country [1], states [2], and many municipalities [3], we're very much insolvent as it relates to future obligations. Could we please stop supporting reckless behavior making it worse?
I suspect having a good talent pool, good infrastructure, and a responsive city government is worth more to the company than a few billion dollars in tax breaks.
This is a very bad idea .. there is no need for so many people to sit in one place and terrible for housing and commute. Amazon should come up with a better idea .. this is so not like Amazon.
Right, but if Amazon pre-selects from a menu of the former, then cause a competitive bidding war for tax breaks from compliant cities then that's even better from Amazon's perspective isn't it? I personally disagree with the approach, but I would guess that's why the search was publicized.
And what is particularly galling about Amazon is they essentially pay no taxes. Since 2008, Amazon has paid $1.8B in income tax while Walmart has paid $64B [1]. So they're basically leeches demanding public services while contributing virtually nothing. As someone whose name I've forgotten said, the fundamental question surrounding silicon valley / SV type companies is how do you run a country when a company with $0.5T market cap / Fortune #12 essentially pays no taxes. Who pays for roads/fire services/schools.
Do the thousands of employees contribute economic benefit, as well as taxes, to Seattle or other cities?
It's absurd to think that there is no tax money being injected into the city simply because the corporate tax collected is low. They are spending their profits! Some of it in Seattle, and in other places they have physical presence on wages, real estate, etc.
Honestly you need to explain your premise that they contribute nothing... it's illogical. Where is the money going?
Why are "taxes" the only way citizens of a community can prosper? Do wages not count? If they do count, would you like to argue that Amazon is not paying wages to thousands of employees?
Do those employees pay taxes? Taxes aside, are the wages themselves beneficial?
One final point: "tax breaks" in and of themselves seem silly to rail against, like a shareholder being upset at "discounts".
Is your contention that a city giving any tax breaks will see less tax revenue as a result of Amazon coming into their city than if they didn't? Surely it's a question of how much no?
This might not be as big a part of their calculation as you think. Homegrown companies like Microsoft and Boeing avoid paying tax by incorporating in different states.
>> Can any city provide a net increase in 5,000 housing units? Well, that’s a speculative question, but one thing we can do is ask if any city did produce 5,000 extra housing units beyond household formation over the last 5 years
Calgary (Alberta, Canada, not Texas) added triple that in 2014[1]. Since the province's economy is commodity driven the major city centers are accustomed to boom and bust cycles and are used to adding housing quickly. Also of note, Calgary has rated quite high based on a number of other metrics given by Amazon[2] (though, to be fair its really hard to trust all bias is left behind in these analyses)
The #1 problem with the article is that it restricts the analysis to the U.S.. With the current political climate around immigration, Amazon can't easily bring engineering talent from around the world to its headquarters. A site outside the US could solve that. The RFP said "North America".
It may be true that no city fits what Amazon wants, but I think Atlanta comes very close. It has plenty of housing, low cost of living, major airports, universities, a large population, and a decent rapid transit that could be expanded given a catalyst like Amazon. I think Amazon should opt for a low cost, big city, and let that city build around Amazon.
>It has plenty of housing, low cost of living, major airports, universities, a large population, and a decent rapid transit that could be expanded given a catalyst like Amazon.
I live in Atlanta and all of these things are true except that last one. MARTA has neither the coverage or the competence to qualify as 'decent'. Even if they plopped the HQ right on top of Five Points (as is being proposed), most employees are still gonna drive, and encounter that world-class ATL rush hour traffic.
That said, Atlanta is still definitely in play, and our department of economic development (which I used to work for) is one of the most effective in the country. They brought Hollywood to Atlanta already, Amazon shouldn't be that much harder. Culturally, I expect it would encounter a mixed reception.
MARTA has neither the coverage or the competence to qualify as 'decent'.
Compared to New York, Chicago, DC, Boston, or SF sure. Assuming Amazon isn't going to expand to a more expensive city, the only competing subway system is in Philadelphia. MARTA is unpopular, but cleaning it up and buying new trains is cheap compared to digging new tunnels through an existing city. No one points out that the Gulch site is currently a wasteland because we all know that if Amazon shows up, it won't be.
MARTA coverage is only a problem if you don't choose your work place or housing with it in mind.
500k people ride MARTA every week day. As long as Amazon builds their HQ close to a station plenty of the workers will have the option to live close to one, or drive to a park and ride as opposed to dealing with the traffic.
I have a home in Atlanta, and so I share in your pain about Marta. There's a lot of societal resistance to Marta, for various reasons I won't get into because I sense you know them already. With a major player like Amazon, the city (and counties for that matter) could afford to ignore the people and plow ahead with expansion. Imagine a giant, beautiful parking deck, a-la-Lindberg up in Cobb County somewhere.
FWIW when I lived in midtown and worked in Dunwoody I had excellent MARTA usage. It took my daily commute to a very predictable 45 minutes door-to-door.
Now that my walk to marta is 20 minutes and on east-west line I am using it less, but would if I worked downtown. <shrug>
The problem with Detroit is they would have to import nearly every worker. Plus you need to convince all of those workers to move to Detroit. There may be some overlap between former autoworker and whatever it is Amazon wants, but there's still going to be a gap.
There is little to no way Amazon is going to be able to import their workforce to live in the city of Detroit. A whole lot of the housing options there are extremely outdated or require extreme renovation, the city’s infrastructure is in crumbles, and blight is still a problem.
Source: I have some friends that live in Detroit. Like, the actual city, not the Detroit Metro area.
Detroit would be a tough sell to six-figure earners. Huge crime rate, terrible schools, dysfunctional bankrupt government, lack of local talent. Maybe an affluent suburban community outside Detroit, but those aren't going to be supportive of a huge new corporate HQ with all the traffic, construction, etc.
The premise is interesting, but some of the calculations aren't convincing. The first map of cities that "did produce 5,000 extra housing units beyond household formation" is particularly strange. Which city is more prepared for such an expansion, one that built zero units and lost 5,000 residents, or one that built 100,000 units and gained 100,000 residents? Without greater clarity into the data, many of these maps fall into "lies, damn lies, and statistics".
Yeah, that struck me as odd too. Under normal circumstances, you wouldn't expect private developers to build that much excess inventory on spec with no expectation of being able to sell quickly.
In the 6 years from 2010 to 2016, metro Atlanta has added 94,000 "housing units". No one would even notice an extra 5%. Over the same period we also added 259,000 jobs, and 4% more isn't going to fundamentally change anything.
Completely unrelated to the topic at hand, but I've gain a new-found respect for Medium, having not seen this on the site before:
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I think that's the first time I've seen visible evidence of the DNT setting actually doing something. Now whether or not that offsets the header/footer turds that litter their mobile site, I'm still deciding. :-)
Everything about this article is kind of dumb. Using this exact same argument, it would be impossible for any company to build any headquarters, and yet somehow the American economy still continues to grow.
It's not like amazon is going to airlift in 50k people on day 1.
Anyway, Northern Virginia is still the obvious place for second HQ, given metro access to DC, Dulles airport, the millions of datacenters, fios penetration and large numbers of local it workers.
I agree that the article fails to explain why a city can't increase it's housing creation when the market demands (sort of like most places already do, albeit with issues).
BUT I think it's fair to point out that Amazon going anywhere where it represents a large change in the population will have a notable housing impact. Construction lags behind demand and the current markets in high tech areas have lots of problems with difficult local regulations, extreme rents, very limited availability, and general gentrification issues. Amazon will likely be a net positive for wherever they go, but it's a good idea to anticipate and try to reduce the inevitable negatives.
I want to disagree with your NoVa conclusion, but I can't. It has location, population, infrastructure, though transportation is notoriously bad - almost always ranked worse for traffic than San Francisco and Seattle, usually beating Boston, and challenging LA depending on what you measure. (that's from memory and a few google searches to make sure I'm not crazy, take with salt) North Carolina would be the next natural match, but I don't see Amazon taking on that political mess.
With AOL closing up shop in NOVA, theres a huge real estate gap that Amazon might be over to take over too on top of all the other speculative talk Northern VA already offers. I'm sure FFX County / Loudoun will place an appealing bid.
Let’s go over this. As a previous DC metro area resident, I agree and disagree with this statement.
1. Transportation: the vast majority of workers in NoVa drive to work, either to drive to Metro or drive to their workplace. Traffic is unacceptably bad now. Going from Bethesda to McLean, which is about a 15 mile drive, can take over an hour.
Solution: Amazon locates west of Manassas, in Front Royal or Leesburg.
This still puts them close to their us-east datacenters, but it’s still far from nightlife and city attractions for their workers. Maybe Richmond would be better, except there is a dearth of tech workers there.
That's not fair. The article is pointing out that Amazon's criteria are unrealistic, and implying deliberately so. It's not implying that companies can't relocate headquarters.
When I was in Chicago the other weekend there was so much talk about Amazon moving their headquarters there, with a number of possible sites including the Old Main Post Office.
There is a building boom going on right now. Chicago has 54 high-rises in construction, many with residential living space. Some are smaller 50-unit buildings and the biggest, One Grant Park, has 792 units.
Readit News
Massive tax breaks and giveaways. That's all this is about. It's a dog and pony show to see who will fork up the most to buy in to the delusion that it will pay off somehow.
Because it doesn't work for sports stadiums. It works in the sense of corporate welfare, but it is not a net gain for the community.
https://www.brookings.edu/blog/brookings-now/2016/09/09/top-...
http://www.pbs.org/newshour/rundown/public-money-used-build-...
https://www.forbes.com/sites/jeffreydorfman/2015/01/31/publi...
https://www.youtube.com/watch?v=xcwJt4bcnXs
It's sad watching cities fall over themselves to give Amazon (a half a trillion dollar company) a handout. Handouts no one can afford.
> (but where cities take the hit if the company town fails)
As a country [1], states [2], and many municipalities [3], we're very much insolvent as it relates to future obligations. Could we please stop supporting reckless behavior making it worse?
[1] https://www.washingtonpost.com/news/fact-checker/wp/2013/10/...
[2] https://www.bloomberg.com/graphics/2017-state-pension-fundin...
[3] https://govrank.org/research/researchText/61
And what is particularly galling about Amazon is they essentially pay no taxes. Since 2008, Amazon has paid $1.8B in income tax while Walmart has paid $64B [1]. So they're basically leeches demanding public services while contributing virtually nothing. As someone whose name I've forgotten said, the fundamental question surrounding silicon valley / SV type companies is how do you run a country when a company with $0.5T market cap / Fortune #12 essentially pays no taxes. Who pays for roads/fire services/schools.
[1] https://www.l2inc.com/daily-insights/no-mercy-no-malice/brea...
It's absurd to think that there is no tax money being injected into the city simply because the corporate tax collected is low. They are spending their profits! Some of it in Seattle, and in other places they have physical presence on wages, real estate, etc.
Honestly you need to explain your premise that they contribute nothing... it's illogical. Where is the money going?
Why are "taxes" the only way citizens of a community can prosper? Do wages not count? If they do count, would you like to argue that Amazon is not paying wages to thousands of employees?
Do those employees pay taxes? Taxes aside, are the wages themselves beneficial?
One final point: "tax breaks" in and of themselves seem silly to rail against, like a shareholder being upset at "discounts".
Is your contention that a city giving any tax breaks will see less tax revenue as a result of Amazon coming into their city than if they didn't? Surely it's a question of how much no?
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Deleted Comment
Seattle costs are ginormous.
Calgary (Alberta, Canada, not Texas) added triple that in 2014[1]. Since the province's economy is commodity driven the major city centers are accustomed to boom and bust cycles and are used to adding housing quickly. Also of note, Calgary has rated quite high based on a number of other metrics given by Amazon[2] (though, to be fair its really hard to trust all bias is left behind in these analyses)
[1] http://calgaryherald.com/life/homes/new-homes/calgarys-housi... [2] http://www.cbc.ca/news/canada/calgary/amazon-headquarters-ca...
A crack down on H1B abuse will free up tens of thousands of spots for companies like Amazon to bring in real talent.
You have companies like Tata getting 5x as many H1B visas as Amazon. And yet they pay their H1B staff on average ~$50k/year less than Amazon.
Deleted Comment
If they put it in Calgary I'd consider moving. That salary hit is massive though.
I live in Atlanta and all of these things are true except that last one. MARTA has neither the coverage or the competence to qualify as 'decent'. Even if they plopped the HQ right on top of Five Points (as is being proposed), most employees are still gonna drive, and encounter that world-class ATL rush hour traffic.
That said, Atlanta is still definitely in play, and our department of economic development (which I used to work for) is one of the most effective in the country. They brought Hollywood to Atlanta already, Amazon shouldn't be that much harder. Culturally, I expect it would encounter a mixed reception.
Compared to New York, Chicago, DC, Boston, or SF sure. Assuming Amazon isn't going to expand to a more expensive city, the only competing subway system is in Philadelphia. MARTA is unpopular, but cleaning it up and buying new trains is cheap compared to digging new tunnels through an existing city. No one points out that the Gulch site is currently a wasteland because we all know that if Amazon shows up, it won't be.
500k people ride MARTA every week day. As long as Amazon builds their HQ close to a station plenty of the workers will have the option to live close to one, or drive to a park and ride as opposed to dealing with the traffic.
Now that my walk to marta is 20 minutes and on east-west line I am using it less, but would if I worked downtown. <shrug>
see you on reddit/r/Atlanta :)
There is little to no way Amazon is going to be able to import their workforce to live in the city of Detroit. A whole lot of the housing options there are extremely outdated or require extreme renovation, the city’s infrastructure is in crumbles, and blight is still a problem.
Source: I have some friends that live in Detroit. Like, the actual city, not the Detroit Metro area.
https://www.huduser.gov/portal/publications/pdf/AtlantaGA-co...
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I think that's the first time I've seen visible evidence of the DNT setting actually doing something. Now whether or not that offsets the header/footer turds that litter their mobile site, I'm still deciding. :-)
It's not like amazon is going to airlift in 50k people on day 1.
Anyway, Northern Virginia is still the obvious place for second HQ, given metro access to DC, Dulles airport, the millions of datacenters, fios penetration and large numbers of local it workers.
BUT I think it's fair to point out that Amazon going anywhere where it represents a large change in the population will have a notable housing impact. Construction lags behind demand and the current markets in high tech areas have lots of problems with difficult local regulations, extreme rents, very limited availability, and general gentrification issues. Amazon will likely be a net positive for wherever they go, but it's a good idea to anticipate and try to reduce the inevitable negatives.
I want to disagree with your NoVa conclusion, but I can't. It has location, population, infrastructure, though transportation is notoriously bad - almost always ranked worse for traffic than San Francisco and Seattle, usually beating Boston, and challenging LA depending on what you measure. (that's from memory and a few google searches to make sure I'm not crazy, take with salt) North Carolina would be the next natural match, but I don't see Amazon taking on that political mess.
1. Transportation: the vast majority of workers in NoVa drive to work, either to drive to Metro or drive to their workplace. Traffic is unacceptably bad now. Going from Bethesda to McLean, which is about a 15 mile drive, can take over an hour.
Solution: Amazon locates west of Manassas, in Front Royal or Leesburg.
This still puts them close to their us-east datacenters, but it’s still far from nightlife and city attractions for their workers. Maybe Richmond would be better, except there is a dearth of tech workers there.
When I was in Chicago the other weekend there was so much talk about Amazon moving their headquarters there, with a number of possible sites including the Old Main Post Office.
There is a building boom going on right now. Chicago has 54 high-rises in construction, many with residential living space. Some are smaller 50-unit buildings and the biggest, One Grant Park, has 792 units.