Amazon HQ2 thread

[Khantilever]

Originally Posted by the urban politician

Most people on this forum will celebrate this, of course. We love our big cities.

Truth is, I think our country (America) needs to have healthy smaller towns and midsize cities. We had it good in the 60’s, 70’s, 80’s when we had literally tens of thousands of robust towns everywhere, offering a good quality of life.

There’s a reason small towns are dying, despite all of the subsidies we provide them. So much policy is tilted toward their favor, from tax policy (which transfers money from cities out) to political representation. But they lack inherent economic advantages of certain sites (like coastal cities) and the benefits that density provides. Add to that the fact that big cities make it hard for people to move into them by restricting development.

Those facts imply that it is probably the case that cities are currently too small and too numerous.

[whatnext]

Progressive backlash builds against Amazon's HQ2

Cities should resist the temptation to throw money at Amazon and CEO Jeff Bezos just because the company is promising to create high-paying jobs. That's the message from progressive groups and some local policymakers in New York City and Washington.

In a 14-month frenzy, cities across North America bent over backward to court Amazon's second headquarters, or HQ2, by offering subsidies and tax breaks. Recent reports suggest Amazon might split its the new office campuses between Long Island City in Queens and Crystal City in Arlington, Virginia.
The company has pledged to spend at least $5 billion and create 50,000 jobs as part of the project. Even divided over two locations, that represents an enormous infusion into a local economy.
But as Amazon's decision (AMZN) nears, opposition to cities' huge packages of economic incentives is getting louder. Groups organizing to pressure local leaders say financial sweeteners are unnecessary due to Amazon's size and wealth, and they think the money would be better spent on services for the community...

.."My understanding is the public subsidies that are being discussed are massive in scale," New York state senator Michael Gianaris, who represents the Long Island City area, told CNN Business. "Why we would need to give scarce public dollars to one of the richest companies on Earth is beyond me."..(bold mine)...
https://www.cnn.com/2018/11/09/tech/amazon-hq2-progressive-backlash/index.html

I've bolded the comment as it makes a lot of sense.

[chris08876]

^^^^^^^^

I think long term is key. Let's say you give out 4 billion in benefits, over the long run, the economic gain from such a move in all sectors of industry will net a much larger gain.

In other words, the short term hit of giving subsidies will long term make the initial hit worth it, because the economic benefit will far exceed the initial loss.

Transit being the limiting reagent in LIC, but out of this move, if it happens, the increase in business, the increase in capital investment in NY in the form of residential, new businesses to cater to the future projected residents... will add more to the economy than the initial hit.

A prosperous local economy... benefits a lot of folks. Also, let's look at the taxes long term that a company like Amazon... or even Google will yield. Even if the taxes are lower, long-term, that extra business with huge revenue streams will provide the state or city a lot of money.

So yeah... there's a reason why cities want the business. It may be a drop in the bucket in NYC, but in some cities, its a big deal!

[the urban politician]

^ An old but tired argument.

Check out the Foxconn deal in Wisconsin and you will see how well that is working out.

[twister244]

I think the question of whether the subsidies are worth it is a very subjective question. If it were something like moving Amazon's HQ from Seattle, which would mean the vast sums of institutional tech knowledge/connections that come with that, then yes, a few billion may be well worth it. In that scenario, the long-term will produce spin-offs and other startups nearby that could further infuse the local economy. In this case, if "HQ2" is nothing more than a simple outpost of simple/boring corporate jobs, then billions may be an oversell for what the local economy might get in the long-term. If Amazon where to ever trim off in the future, "HQ2" will probably see jobs go first before Seattle's office. I think a lot of people had this idea in their minds that HQ2 was going to be something like their original HQ, fostering massive amounts of tech talent, etc. Maybe in the end it will play out like that, but it's also possible the nature of "HQ2" will be nothing like that at all.

[Pedestrian]

Originally Posted by the urban politician

^ An old but tired argument.

Check out the Foxconn deal in Wisconsin and you will see how well that is working out.

I'll make it easy:

Foxconn Considers Bringing Chinese Workers to Wisconsin as U.S. Labor Market Tightens
By Yang Jie, Shayndi Raice and Eric Morath
Updated Nov. 6, 2018 4:00 p.m. ET

MOUNT PLEASANT, Wis.— Foxconn Technology Group is considering bringing in personnel from China to help staff a large facility under construction in southern Wisconsin as it struggles to find engineers and other workers in one of the tightest labor markets in the U.S.

The company, the Taiwanese supplier to Apple Inc., has been trying to tap Chinese engineers through internal transfers to supplement staffing for the Wisconsin plant, according to people familiar with the matter.

The state pledged $3 billion in tax and other “performance-based” incentives to help lure Foxconn, and local authorities added $764 million. Foxconn must meet hiring, wage and investment targets by various dates to receive most of those benefits.

The company promised the state it would invest $10 billion and build a 22-million-square-foot liquid-crystal display panel plant, hiring 13,000 employees, primarily factory workers along with some engineers and business support positions.

Foxconn said its “Wisconsin first commitment remains unchanged,” in a written statement to The Wall Street Journal in response to questions about its hiring plans. In a separate statement it said it still plans to ultimately hire 13,000, and the majority “will work on high-value production and engineering assignments and in the research and development field” . . . .

A tight labor market is making recruiting a challenge. Unemployment in the state reached a record low earlier this year. At 3.0% in September, Wisconsin’s jobless rate is well below the national average, which hit 3.7% that month—itself a 49-year low . . . .

“It’s very difficult to find skilled labor in our market,” said Loretta Olson, who owns an Express Employment Professionals staffing office in Racine, Wis., near the planned plant. She also serves on the board of the Racine County Economic Development Corp., which worked to attract Foxconn to the area . . . .

Foxconn Chairman Terry Gou is looking to company engineers in China to transfer, according to people familiar with the matter. Some engineers have expressed reluctance to relocate to Wisconsin, which is less well-known to Chinese workers than U.S. tech hubs in California or New York.

One engineer who declined to give his name said he wouldn’t want to move to a place he worried could be as cold as Harbin, a northern Chinese city known as “Ice City.”

Racine County isn’t particularly diverse. More than 80% of the population is white, and less than 2% is of Asian origin, according to the Census Bureau.

Mr. Gou is upset that few Chinese workers have volunteered to move . . . .

https://www.wsj.com/articles/foxconn-con...541505600?mod=searchresults&page=1&pos=4

So one wonders why they picked a small community like Racine in the first place. I don't think Amazon is going to make a mistake like that.

[Khantilever]

Originally Posted by whatnext

Progressive backlash builds against Amazon's HQ2

There's some cognitive dissonance going on with progressive critics of Amazon.

On the one hand, there are numerous articles exhorting Amazon to choose Detroit or Pittsburgh or even some other non-elite town in order to bring investment to areas that are struggling. In other words, they want Amazon to take into account the effects it will have on the community they choose.

On the other hand, they insist that cities should not offer any incentives to guide Amazon's choice. Instead, Amazon should choose a sub-optimal location out of the goodness of their hearts. More importantly, these struggling cities shouldn't be able to try and make up for their relative economic weakness by offering incentives to compete with the big dogs. Begging is okay, but bidding is not.

If you believe that Amazon's choice affects the community they choose, and that the effects vary by city--so Detroit would benefit tremendously while NYC won't--then that is a strong argument for cities competing using incentives in order to get Amazon.

[Austin55]

Dallas had "Zero chance"

https://www.wfaa.com/mobile/article/news...utm_medium=trueAnthem&utm_source=twitter

[The North One]

Originally Posted by Khantilever

There's some cognitive dissonance going on with progressive critics of Amazon.

On the one hand, there are numerous articles exhorting Amazon to choose Detroit or Pittsburgh or even some other non-elite town in order to bring investment to areas that are struggling. In other words, they want Amazon to take into account the effects it will have on the community they choose.

On the other hand, they insist that cities should not offer any incentives to guide Amazon's choice. Instead, Amazon should choose a sub-optimal location out of the goodness of their hearts. More importantly, these struggling cities shouldn't be able to try and make up for their relative economic weakness by offering incentives to compete with the big dogs. Begging is okay, but bidding is not.

If you believe that Amazon's choice affects the community they choose, and that the effects vary by city--so Detroit would benefit tremendously while NYC won't--then that is a strong argument for cities competing using incentives in order to get Amazon.

New York and DC are still both offering incentives so your point is moot.

[BrownTown]

Originally Posted by whatnext

The company has pledged to spend at least $5 billion and create 50,000 jobs as part of the project. Even divided over two locations, that represents an enormous infusion into a local economy.

Another thing that amazes me is how relatively small of an impact Amazon is actually likely to have compared to how insane the bidding for it was. There's currently something like 100 Billion dollars in petrochemical projects going on in Cameron Parish alone and far more when you include the entire Gulf Coast, but you rarely hear about these sort of projects and the jobs they create. I guess it's because oil refineries and chemical plants obviously aren't going to end up in NYC or DC and those (along with a few other large cities) are all the US media actually cares about.

[skyscraperpage17]

Originally Posted by BrownTown

Another thing that amazes me is how relatively small of an impact Amazon is actually likely to have compared to how insane the bidding for it was. There's currently something like 100 Billion dollars in petrochemical projects going on in Cameron Parish alone and far more when you include the entire Gulf Coast, but you rarely hear about these sort of projects and the jobs they create. I guess it's because oil refineries and chemical plants obviously aren't going to end up in NYC or DC and those (along with a few other large cities) are all the US media actually cares about.

Can you please provide a link to these projects you speak of?

[Crawford]

Originally Posted by BrownTown

Another thing that amazes me is how relatively small of an impact Amazon is actually likely to have compared to how insane the bidding for it was. There's currently something like 100 Billion dollars in petrochemical projects going on in Cameron Parish alone and far more when you include the entire Gulf Coast, but you rarely hear about these sort of projects and the jobs they create. I guess it's because oil refineries and chemical plants obviously aren't going to end up in NYC or DC and those (along with a few other large cities) are all the US media actually cares about.

Petrochemical plants are poison-spewing blights with minimal jobs and no spinoff effects. Louisiana has a horrible, no growth economy.

You're seriously comparing Amazon with Cancer Alley?

[skyscraperpage17]

Below is a sobering article from a Seattle resident about Amazon.

It's all a matter of perspective, so pick your poison...

https://www.geekwire.com/2018/hq2-heartb...t-fine-without-amazon-take-hq1-survivor/

..."Even so, cities need to ask themselves: Do they want the Amazon wild card in their community? Can they possibly harness it? Is it worth it?

Sure, the promise of high-paying jobs and construction cranes is enticing. We’ve watched those rise almost over night in Seattle, but it’s not all pretty along the shores of Puget Sound.

Sorry, Perry Como, the bluest skies you’ve ever seen are … not necessarily in Seattle.

There are byproducts — the $15 speciality cocktails; the demolition of the local bowling alley; the loss of a sense of place.

Homelessness. Congestion. Failing infrastructure. A growing divide between the haves and have nots.

A Seattle freeze that’s now icing over to pure anger.

Seattle’s soul skipped a beat as Amazon mushroomed in size.

Of course, not all of this can be placed on the shoulders of Amazon. And I always like to ground Seattle’s problems in a Rust Belt reality.

I moved to Seattle from northern Ohio in 1995, a year after Bezos started Amazon. And the issues and challenges Seattle now faces in terms of skyrocketing rents, congestion, new construction — in large part due to Amazon’s rise and the booming tech economy — pale in comparison to the issues facing Akron or Cleveland.

I’d still rather be in Seattle."...

[The North One]

Why do you keep bringing up cities that have nothing to do with HQ2???

[skyscraperpage17]

Amazon’s HQ2 Decision: A Disruptive Opportunity Lost

https://www.barrons.com/articles/why-amazons-hq2-decision-was-an-opportunity-lost-1541809801

While there were pockets of surprise across the U.S. on election night, the new congressional map once again showed a nation divided between urban coasts and a more rural heartland. As the map filled in, it was hard not to think about Amazon.com ’s decision, reported on Monday, to split its new HQ2 between New York City and Northern Virginia.

A day later The Wall Street Journal reported that Alphabet ’s Google was preparing to add 12,000 new employees to its New York City office.

Amazon’s heavily-touted HQ2 search was ultimately as predictable as the election map. That’s an opportunity lost. With 50,000 HQ2 employees and a big budget, Amazon had a unique chance to redraw the map and perhaps change the tenor of debate. Among the other cities under consideration by Amazon were Columbus, Ohio, Denver, Nashville, Tenn., Dallas and Austin, Tx., Raleigh, N.C., and Atlanta.

With any of those cities, one could imagine an Amazon conference call in which Seattle employees were challenged and enriched by colleagues from different backgrounds. Instead, Amazon will be connecting West Coast blue staters to like-minded East Coasters.


This is not just about nation-building. The risk for shareholders is that Amazon accelerates the groupthink that threatens big companies. As originally explained —“a full equal to our current campus in Seattle”—HQ2 seemed like another disruptive Amazon idea. Now it feels uninspired. That’s not a word Amazon is used to hearing.

--Alex Eule

[mhays]

HQ1 is a united nations, and HQ2 will be too. That's certainly a type of diversity, and one that could be diminished in a city without a decent number of direct overseas flights and existing international communities.

Actually a third type of diversity might be useful...non-tech people who don't like newfangled websites or have trouble using them.

[KB0679]

Originally Posted by JMKeynes

A lot of people (outside of very cosmopolitan cities like SF, LA, DC, and Boston) have issues with NY being the ultra-dominant Alpha city, and the Amazon decision only compounds that. People from places like Atlanta, for example, were really hoping that this would help their claim to being a real city. People just need to accept that NY is in a league of its own.

Where do you get the idea that people in Atlanta have issues with NYC's stature or needed validation from Amazon as far as being a "real city"? Sounds like nonsensical drivel to me.

[jd3189]

I don’t think people in Atlanta wanted HQ2 to come just to finally become a “real city”. Although, like I kept saying in this thread, this would be a good economic boost and a good way to get any city outside of the mega giants like NYC and Chicago or the mid-sized tech centers like Austin, SF, and Seattle into the industry even more.


I know it’s been discussed already, but it’s ultimately dumb to consolidate all these companies into a few metro areas. I don’t believe for a fact that every tech person wants to live in just New York, Los Angeles, or San Francisco, especially when those are becoming more expensive. I know talent will go where it wants but there are other options.


LIC is still a good location though. NYC’s center of significant economic activity is starting to really expand beyond Midtown and Lower Manhattan. Brooklyn is becoming more significant as well as Queens. Eventually the Bronx and Staten Island may join the party and the Jersey side ( especially with JC, Hoboken, etc) are growing too. Newark is eventually going to become more significant if NJ become more proactive in providing more connections between its communities and the City.


NYC is constantly a work in progress and since Manhattan is closely reaching the point of limited growth, stuff is going to have to spill over to add density throughout the Tri-State area if they want to continue to be relevant.

[the urban politician]

Originally Posted by Pedestrian

I'll make it easy:


https://www.wsj.com/articles/foxconn-con...541505600?mod=searchresults&page=1&pos=4

So one wonders why they picked a small community like Racine in the first place. I don't think Amazon is going to make a mistake like that.

Uh.....duh.....

The whole point of Foxconn is precisely that they would hire American workers.

Silly article.... what were the douchebags that wrote this elitist article proposing, that Foxconn should’ve built their factory in California instead? Fat chance of that happening.

[chris08876]

Originally Posted by jd3189

NYC is constantly a work in progress and since Manhattan is closely reaching the point of limited growth, stuff is going to have to spill over to add density throughout the Tri-State area if they want to continue to be relevant.

Newark NJ is a gold mine just waiting to be tapped. Ras Baraka has been good for business and is advocating for development; finally, somebody that gets it.

Newark has long had corrupt, poor leadership. I'm not saying Baraka will be the savior but the city needs a pro-development advocate. Somebody who at least is pragmatic with development.