Amazon is reportedly close to selecting the winner of its second-headquarters project, known as HQ2.
Or, should I say “winners”?
It turns out, if The New York Times is right, that Amazon is close to agreeing to split its HQ2 project among two cities: New York City and Arlington, Virginia. The two cities will reportedly receive an as-yet-unknown portion of the 50,000 employees and $5 billion investment Amazon promised to winners of the project.
Wait, huh? That wasn’t part of the plan.
If Amazon selects two cities for HQ2, as reported, then everything Amazon promised goes out the window. What makes this different from Amazon’s presence in other cities where it has offices, such as Boston or Los Angeles?
Will the company refer to both sites, which are hundreds of miles from each other, as HQ2? Or are we just supposed to think of HQ2 as the entire eastern seaboard — any city or town that is accessible from Amtrak’s Acela service between New York and Washington, DC.
In fact, Amazon already has a sizable number of employees in both the DC area and New York City. The Times says it’s the largest number of employees outside Seattle, and it employs thousands of workers in each city.
Isn’t Amazon stretching the meaning of the word “headquarters” here? What’s the difference between having a large satellite office in a city and what Amazon purports to call a “headquarters.”
There may be a distinction for Amazon employees, but that’s unlikely to be the case for the tax-paying public — which will be footing a large part of the bill thanks to the tax incentives Amazon is demanding.
Critics of Amazon’s long-drawn-out HQ2 selection process already questioned that a “second headquarters” could even exist. Dividing the project into two equal-size headquarters just adds more fuel to the argument that the entire process was a ploy to pit cities against one another to maximize incentives.
It also breaks Amazon’s original mandate for the project that HQ2 would be a “full equal” to the company’s Seattle headquarters. If it’s separate, it’s not equal.
Amazon hyped up its HQ2 investment so much that cities were willing to do anything for the chance of landing it. Amazon probably at least figured that into its calculus, and when it realized it would be easier to count the cities that didn’t jump at the chance to have Amazon in the backyard, the strategy shifted to just maximizing gains.
While we don’t yet know what tax incentives were offered up for Amazon to select these two cities, nor what Amazon offered up in return, we can safely assume it totaled in the billions.
City and state leaders jumped at the chance for what they saw as a high-profile win — and obvious benefit that constituents would see and appreciate. The upsides for local communities and governments — economic or otherwise — are now not so immediately obvious.
If Amazon is able to get away with essentially robbing Virginia and New York of millions in tax revenue and not even offering up in return what they originally promised, what else are they capable of?