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I think they want large amounts of upper management on the east coast because it's work day overlaps with Europe and it would allow Amazon to solidify global connections.
I don't really get the author's point here. Of course, Amazon is hurting traditional retail. But this is not a Seattle problem, it is a national and even international issue.
As for Amazon controlling employment in the Seattle area...that is beyond ridiculous. Boeing still builds their airplanes there, Microsoft still employees huge number of tech employees. Costco, Starbucks, Weyerhaeser, Nordstrom, and Expedia all are HQ'rd in the Seattle area.
I think they want large amounts of upper management on the east coast because it's work day overlaps with Europe and it would allow Amazon to solidify global connections.
Same is true for the Central time zone (i.e. Chicago). Boeing took into consideration the same European connections, as well as the Seattle manufacturing connections for a balance in choosing Chicago.
I don't really get the author's point here. Of course, Amazon is hurting traditional retail. But this is not a Seattle problem, it is a national and even international issue.
As for Amazon controlling employment in the Seattle area...that is beyond ridiculous. Boeing still builds their airplanes there, Microsoft still employees huge number of tech employees. Costco, Starbucks, Weyerhaeser, Nordstrom, and Expedia all are HQ'rd in the Seattle area.
My own take is that the company is expressing a willingness to invest in the kind of quality of life some of their employee's may want, or have expressed a desire to have. Seattle is a beautiful city, but it has also experienced an accelerated cost of living, rise in housing costs. Its climate is also not everyone's cup of tea. Amazon is happy to look at ways to accommodate a talent pool that might otherwise be more comfortable living and working some place other than Seattle. And after a while, people want to have the ability to comfortability afford to have kids, raise families and have nice things. In several years millennials - who they hope to continue hiring - will be reaching peak-child rearing years and smallish apartments in a super-expensive urban center like Seattle may not be as attractive. You've got to lower your costs while preserving Amazon culture, and find a suitable alternative. This is why I think HQ2 will be in a lower-cost urban metro in the S.E., TX or some place like Philadelphia (not Boston).
You might want to do some fact checking. The Philadelphia region has an extremely high concentration of world class institutions and people who travel and have some sort of education are aware of that. Falling under the radar does not downplay the city, and that is a total insult to Philadelphia comparing it to Cincinnati.
I don't care about Amazon, I am just correcting you.
I never said Philly was unimportant as actually it is one of the few US cities I haven't been to that I would like to visit. That said, if you ask anyone in the US or out what the 3 most important NE cities are you would always get Boston, NY, and Washington even though Philly is bigger than Boston. Boston is known for it's schools, NY for commerce/entertainment, and Washington for politics and Philly for nothing in particular.
Philly's lack of recognition has nothing to do with Philly itself but rather it's location stuck between NY and Washington.
Back to the Amazon thread, I still see, as I always have, Philly as a major contender.
I never said Philly was unimportant as actually it is one of the few US cities I haven't been to that I would like to visit. That said, if you ask anyone in the US or out what the 3 most important NE cities are you would always get Boston, NY, and Washington even though Philly is bigger than Boston. Boston is known for it's schools, NY for commerce/entertainment, and Washington for politics and Philly for nothing in particular.
Philly's lack of recognition has nothing to do with Philly itself but rather it's location stuck between NY and Washington.
Back to the Amazon thread, I still see, as I always have, Philly as a major contender.
Disagree with that big time. If nothing else, Philly is known for its history; I mean how could it not, being the birthplace of the United States of America? That's not small potatoes. And when you take local/pop culture into account, it's known for even more. I agree that Philly is overshadowed by NYC but to say that it essentially lacks an identity in the national consciousness is a bit silly.
A saving point for Boston is that they already have their workforce living in the area. Amazon won't have to worry about the high COL being a factor because chances are, there are already thousands of educated people (many probably already home owners), just waiting for an opportunity like Amazon. Also include the thousands of graduates from prestigious universities. I would say the same can apply to New York or DC. With the tens of millions of people already living in the North East region of the country, I am guessing there would be very few relocation's.
This is just a guess, but it seems like the North East is a fairly "sticky" region. It's not as transient as places like Florida, Texas, California, or really anywhere out west. There are probably thousands of intelligent people that Amazon would love to hire who would refuse to move away from the north east.
The below is just my perspective, so try not to take anything personally please. I don't have anything against these places but just giving something of an honest assessment, is all.
My Elimination List:
1. Memphis: Memphis has offered Amazon only $50 - $60 million in tax incentives. Generally this makes me happy because Memphis gets it, you shouldn't be shelling out an exorbitant amount of money for this but given that Amazon will get an offer they like by probably dozens of places, this lowball of an offer would effectively eliminate Memphis straight from contention.
2. Seattle: When I say Seattle, or really any city's name, I am always referring to not just the city but its entire metropolitan region. Seattle you are eliminated. While Jeff Wilke will convince you that Amazon will seriously take a hard look at the local bids for HQ2, it's not in the realm of possibility that Seattle will have both HQ1 AND HQ2.
Seattle you are eliminated IMO.
3. San Antonio: San Antonio pulled itself out of contention by itself. The city emphatically stated that handing out corporate welfare is not their modus operandi and I for one totally respect them for it. San Antonio also called Amazon's bluff, they stated that Amazon already knows where it is headed and that this is all a smoke screen to up the tax incentives and bidding war between cities and states. Here's the quote by a San Antonio city leader saying just that, "it's hard to imagine that a forward-thinking company like Amazon hasn't already selected its preferred location." Right you are San Antonio, right you are. A company that plans its quarterly operations years in advanced, in addition to having its succession line for executives and CEO already planned out surely has this HQ2 thing already figured out too or at the minimum, at least a shortlist of places they want to be.
4. Portland: Amazon executives saying that they want to diversify their portfolio by choosing an HQ2 location that represents a different culture and different type of draw than Seattle essentially disqualifies Portland. Not that Portland and Seattle are culturally the same but they have a good deal of overlap, just as all cities in the proximate region do with one another.
Portland you are eliminated IMO.
5. Vancouver: See Portland.
Vancouver you are eliminated IMO.
6. Denver: I personally thought Denver would be a Top 5-10 selection and if Amazon creates a shortlist, I expect it to be on it but the fact that the city isn't bending to Amazon's will with regard to corporate welfare eliminates Denver in my perspective. Amazon can get a compatible culture somewhere else that meets their criteria and ponies up the tax incentives. Don't think for a second that Amazon will put HQ2 in Denver just because they like the area and its culture, they want their corporate welfare too. They used strong language in their RFP with regards to corporate welfare, they went as far as suggesting that states appoint a special session to get the finances worked out to give them that corporate welfare. Special Sessions cost the state's taxpayers their money to hold, so yes, Amazon wants its money.
Here are the important excerpts straight from Amazon's own mouth, I've taken the liberty of underlining the parts I want to emphasize:
Quote:
Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount.
Please describe any specific or unique eligibility requirements mandated by each incentive item. With respect to tax credits, please indicate whether credits are refundable, transferable, or may be carried forward for a specific period of time. If the incentive includes free or reduced land costs, include the mechanism and approvals that will be required. Please also include all timelines associated with the approvals of each incentive. We acknowledge a Project of this magnitude may require special incentive legislation in order for the state/province to achieve a competitive incentive proposal. As such, please indicate if any incentives or programs will require legislation or other approval methods. Ideally, your submittal includes a total value of incentives, including the specified benefit time period.
Capital and Operating Costs – A stable and business-friendly environment and tax structure will be high-priority considerations for the Project.Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process.
Incentives – Identify incentive programs available for the Project at the state/province and local levels. Outline the type of incentive (i.e. land, site preparation, tax credits/exemptions, relocation grants, workforce grants, utility incentives/grants, permitting, and fee reductions) and the amount.The initial cost and ongoing cost of doing business are critical decision drivers.
Oh, they definitely want their incentive money. Frankly they want a whole lot of things and with over 130 cities bidding for their HQ2, they'll get a better fit than Denver if Denver doesn't want to pony up the corporate welfare. I totally respect Denver for doing this but understand that it puts your bid on thin ice.
Denver you are eliminated IMO.
5. Boston: It came out yesterday that Boston has taken the Denver approach, or at least it seems that way. That's a tough blow to Boston's chances of landing this thing. Boston was my pick to get HQ2 but if they're not going to pay an exorbitant or even competitive offer with regard to tax incentives, then they don't have a shot. Amazon can literally just play pick'em with North America, so many cities are bidding that if one or two cities decide to not comply with the corporate welfare, Amazon can quickly move on because somewhere else will (i.e. New Jersey, so on). Like Denver and San Antonio, totally respect Boston for not shelling out big bucks for this but understand that it puts your bid on life support. Giving Amazon a "smile" is simply not enough. Oh, it will take more than smiles and laughter and exchanging complimentary pleasantries and kind words to land HQ2 in Boston. You need to bring your wallet to the table too.
6. Charlotte: Amazon's executives as well as their RFP go out of their way to state that prominent universities, especially those for computer science and engineering is crucial to them. Charlotte does not qualify and it takes hits on a number of other Amazon criteria points as well.
Charlotte you are eliminated IMO.
7. Albuquerque, Tucson, El Paso, Grand Rapids, Greenville, Columbia, Hartford, Buffalo, Rochester, Milwaukee, Cincinnati, Cleveland, Columbus, Sacramento, Boise, Spokane, Reno, Colorado Springs, Kansas City, Ottawa, Edmonton, Calgary, Winnipeg, Quebec City, Chattanooga, Knoxville, Birmingham, New Orleans, Baton Rouge, Oklahoma City, Tulsa, Omaha, Harrisburg, Albany, Richmond, Virginia Beach/Norfolk, Greensboro/Winston-Salem, Charleston (S.C.), Little Rock, Fayetteville (AR), Las Vegas, Jacksonville, Cape Coral/Naples/Fort Myers, Orlando, Indianapolis, Louisville, Honolulu, and a few others:
You are all eliminated IMO for being too small, or barely meeting some of the criteria, or not being able to absorb something like this, or not having the infrastructure or institutions in place, or not being able to afford the tax incentives, and in general just always being a longshot of a possibility (or a combination of some or most of these factors).
I want to re-emphasize, I have nothing, not a single thing against any of these cities but yeah, going off objective fronts and recent developments: you're all eliminated from my vantage point IMO.
There are a few others that I haven't mentioned in this post that I would also eliminate as well but will wait for more detail to unfold before doing as such. For now.
My frontrunner now is Chicago. Despite the number of bids that Amazon will get (over 130 interested cities), the true contention line is probably much much much smaller. Probably just no more than 5 actual places, comprising a neat and small shortlist for this.
Last edited by Trafalgar Law; 10-13-2017 at 01:20 PM..
5. Boston: It came out yesterday that Boston has taken the Denver approach, or at least it seems that way. That's a tough blow to Boston's chances of landing this thing. Boston was my pick to get HQ2 but if they're not going to pay an exorbitant or even competitive offer with regard to tax incentives, then they don't have a shot. Amazon can literally just play pick'em with North America, so many cities are bidding that if one or two cities decide to not comply with the corporate welfare, Amazon can quickly move on because somewhere else will (i.e. New Jersey, so on). Like Denver and San Antonio, totally respect Boston for not shelling out big bucks for this but understand that it puts your bid on life support. Giving Amazon a "smile" is simply not enough. Oh, it will take more than smiles and laughter and exchanging complimentary pleasantries and kind words to land HQ2 in Boston. You need to bring your wallet to the table too.
Boston hasn't "formally" decided to go the Denver approach with this just yet. It's only so far been a contemplation among some factions within city-council. Boston's city-council member, a person named Jackson is running for mayor and replied that he wouldn't give Amazon a handout. He's running against the current mayor, someone named Walsh, who didn't answer the question on whether he would or not. They were openly debating on the debate floor for election.
So with that said, I'll pull Boston back out from the elimination list. At least for now until more details emerge on Boston's financial position on the matter. I re-figured that it would be premature to eliminate them on basic suppositions but I may have misinterpreted some of the minor details in this one case. That said, I don't think Boston would shell out the mega-billions needed to land this HQ2 but I presume the city's hope is that they make the best offer they can and hope that their attributes have convinced Amazon to give them a steep discount compared to the competition. That's not enough for Amazon IMO. I do think it is telling that factions within the city government are opposed to large incentives though.
Though, it seems irrefutable, given the company's language in the RFP, it's plain as day they want their money and they want you to break bank to give them that money. The winner is going to have to write a huge check, regardless of who the winner is. No city can dodge having to provide enormous corporate welfare, it's an open field competition, if you don't, somewhere else will (plenty of somewhere elses at that) and that somewhere else will land it.
Last edited by Trafalgar Law; 10-13-2017 at 07:45 PM..
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