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You are here: Home / Economics / Free Markets Solve Everything / Amazon Out

Amazon Out

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After much ado, it turned out to be nothing.

Amazon said Thursday it was canceling plans to build a headquarters campus in New York City because of local opposition.

“There are a number of folks on the ground who oppose our presence,” Amazon spokeswoman Jodi Seth said. “We don’t think there’s a path forward in terms of working with them over the long term.”

The company issued a statement shortly before noon saying it did not intend to reopen its search for a second headquarters at this time, but would continue with plans to put at least 25,000 jobs in Arlington in Northern Virginia and 5,000 in Nashville.

Here in the Rochester area, there were months of hype about HQ2, with areas wishing and hoping and praying they’d be chosen, even though it was clear from that start that only a big urban area with a well-developed mass transit system was going to satisfy Amazon.

Reader Interactions

81Comments

  2. 2.

    blackcatsrule

    Maybe it’s my tin foil hat talking but why are they not reopening the search for another city? Did some other backroom deal fall through?

  3. 3.

    Roger Moore

    Good for New York. Amazon was demanding so much from the city that all the benefits would flow to the company and not the community. We need a better way of preventing companies from playing cities off against each other so this kind of bidding war doesn’t happen again.

  4. 4.

    trollhattan

    The whole affair had a strong odor of “Capone’s Vault” for me, i.e, more about free publicity than 11-dimensional corporate decision-making.

    That and the largest attempted shakedown in US history.

  5. 5.

    Leto

    even though it was clear from that start that only a big urban area with a well-developed mass transit system was going to satisfy Amazon.

    So why the hell are they looking in the US?

    Edit:

    That and the largest attempted shakedown in US history.

    Doh! The grift. Always the grift. Carry on!

  6. 6.

    Yarrow

    Amazon could get a tremendous amount of goodwill if they decided to put their new HQ in some mostly rural area in a place that really needs jobs. It would be a case of ‘if you build it they will come’ as far as good employees go. It would be super cheap for them too.

  7. 7.

    Enhanced Voting Techniques

    We really should expect stuff like this from a guy who knowingly starts a scandal just to see the headline “Bezos exposes Pecker”. A man like that is capable of doing anything.

    Anything.

  8. 8.

    Roger Moore

    @Yarrow:

    Amazon could get a tremendous amount of goodwill if they decided to put their new HQ in some mostly rural area in a place that really needs jobs.

    Or a run-down big city that desperately needs revitalization, like Detroit, which has a lot of infrastructure that’s being underutilized.

  9. 9.

    Walker

    @Yarrow:

    They would never be able to attract tech talent there. It is one thing to build a service center to exploit (literally) local talent. It is another thing to convince a young software developer to live in a rural area. Won’t happen.

  10. 10.

    [Individual 1] mistermix

    @Yarrow:

    Amazon could get a tremendous amount of goodwill if they decided to put their new HQ in some mostly rural area in a place that really needs jobs. It would be a case of ‘if you build it they will come’ as far as good employees go. It would be super cheap for them too.

    If they want a 25K workforce a rural area just can’t supply that number of skilled workers quickly.

  11. 11.

    Yarrow

    @Roger Moore: Yep. Another good option. I was thinking West Virginia because Amazon jobs would be so much better than coal jobs. But yeah, any place that needs the help would be great. And they’d get so much goodwill and the place would bend over backwards for them so it would be super cheap for them.

  12. 12.

    NotMax

    Heh. “The eight most outrageous things cities did to lure Amazon for HQ2 :”

    Stonecrest, Georgia

    Honestly, it’s hard to top this one. This small, recently formed town, located close to Atlanta, offered to rename itself Amazon, Georgia, for the company, as we noted at the beginning of October. Stonecrest’s proposal also includes 345 acres of land if Amazon selects it as the HQ destination. Source

  14. 14.

    PJ

    So glad to hear this. I thought for sure Cuomo would ram it through, since it doesn’t require City Council approval.

    They have to put it someplace where their engineers would want to live, and Bezos probably wants a place that would also give him more political muscle. Newark, NJ is ripe for redevelopment, is on the PATH train, and is a reverse commute from NYC, and, no matter how much in subsidies they gave Amazon, it would be a big deal for the city (whereas Amazon was just another corporation in NYC).

  15. 15.

    HeleninEire

    I dunno. I was kinda happy they were coming here. 25,000 jobs not in Manhattan was a big deal.

    I honestly believe there are people who bitch just to bitch. I’m 3 weeks back and all I hear is bitching. About Amazon. About the new bike lanes down Queens Blvd. About the new jail being opened behind the courthouse in Kew Gardens.

    Enough. Bitching and protesting is fine and very NYish. What I am not hearing are alternate solutions. I went onto a local FB site and in response to my describing how bike lanes work; really, really work in Dublin I got people screaming at me that we’re not Europe. Clearly.

    But….I still THRILLED to be back. In fact all these controversies are making me think I should get way more civically involved.

  16. 16.

    different-church-lady

    Unfortunately NYC is about the only place big enough to say no to the Borg.

    “My fair city” dodged a bullet when we acted a little too prickly to make the finals.

  17. 17.

    Walker

    I live in a ruralish area with a university with a top ranked CS program. We have great quality of life, mass transit (busses), and a several satellite tech companies because of the engineering school. My wife works in one of these software companies. She has benefits similar to what she had when she interned at Google at the early days of that company.

    Despite all this, they cannot hire and retain talent. It is difficult to get talented people to move here. You can capture a student before they graduate, but that is it.

    Amazon is never, never, never going to build in any of these places people are suggesting.

  18. 18.

    eclare

    @Yarrow: Good idea, but there are some plants in MS running at less than capacity in rural areas. No one lives there, no one wants to move there.

  20. 20.

    NotMax

    @PJ.

    People don't go to Newark, people come from Newark.

    ;)

    Also too, PATH makes the LIRR look like the bullet train, and until a new tunnel sustem under the Hudson is constructed is destined to retain poor stepchild status.

  22. 22.

    cmorenc

    @ [Individual 1] mistermix:

    Here in the Rochester area, there were months of hype about HQ2, with areas wishing and hoping and praying they’d be chosen, even though it was clear from that start that only a big urban area with a well-developed mass transit system was going to satisfy Amazon.

    …So instead, Amazon is adding 5K jobs to Nashville, Tennessee – where “TRAFFIC-CHOKED NASHVILLE SAID ‘NO THANKS’ TO PUBLIC TRANSIT” (link is to a 2016 article in Wired). OK, so they’re also adding 25K jobs instead to mass-transif rich Arlington, Va, but clearly the availability of mass transit in Amazon’s planned expansion areas is more of a “nice to have” than “must have” if Nashville’s in their expansion plands.

  23. 23.

    Kay

    Maybe this will break the fever:

    State tax incentives for businesses are on the rise. Proponents say they help keep companies in a state and create jobs, making them important to statewide economic development. What they often don’t show is who pays for these costly incentives. Increasingly, employees foot the bill – often without their knowledge.
    Most employees assume that states use their state income taxes to improve school systems, pave roads, or hire more police. That is, after all, part of the social contract we have with our government. We pay taxes and get public services.

    But more and more of those tax dollars aren’t funding services; they aren’t even getting to the state capital. Sixteen states now allow corporations to withhold state income taxes from employees and keep the money as an incentive to locate to or remain in a state. That means that, in effect, employees pay personal income tax to their company rather than their state government. (The 16 states are: Colorado, Connecticut, Georgia, Illinois, Indiana, Kansas, Kentucky, Maine, Mississippi, Missouri, New Jersey, New Mexico, North Carolina, Ohio, South Carolina, and Utah.)

    Completely insane and out of control. Maybe this makes people stop and think about it. They always, always go too far. There isn’t enough money in the world for these people. They want to suck up every dime.

  25. 25.

    Another Scott

    People should remember that these “25,000 jobs”-type numbers are over a decade or two.

    Amazon’s deal with Virginia was much more comprehensive than I initially expected. It really should help benefit the whole region – not just line Bezos’s pockets. And it’s something that only large metropolitan areas can conceivably do.

    Loudoun Times:

    But Amazon’s announcement that it plans to put at least 25,000 highly paid new workers in a new Arlington headquarters is no ordinary economic development deal. Likewise, the incentive package that comes with it is unlike any the state has ever offered.

    […]

    Virginia’s contract with Amazon agrees to pay the online retailer up to $750 million if it creates 37,850 jobs by 2039. Virginia’s grants are divided into two phases, with the state paying $22,000 per job for the first 25,000 jobs, for a total of $550 million in grants to the company. For any additional jobs, the company would get $15,564 per employee. Amazon won’t get paid until after the jobs are created.

    Stephen Moret, head of the state’s economic development agency, said the per-job figure is not even in the top 10 of what the state has previously paid to other companies. In current dollars, Virginia has paid as much as $80,000 per job for some economic development deals, he said.

    Virginia’s per-job incentive is effectively only about a third of what Amazon is getting from New York, where Amazon is also planning a new 25,000 employee expansion.

    […]

    A lynchpin of Virginia’s bid to Amazon is the state’s promises to double the number of students who graduate each year with bachelor’s and master’s degrees in computer science and related fields. The state plans to spend $375 million to boost the number of tech-related master’s degrees at George Mason University and Virginia Tech, which is planning to open a $1 billion graduate campus near the new Amazon headquarters.

    […]

    The state is also promising to put up to $295 million into five transportation projects. They are a connector bridge from Crystal City to Reagan National Airport, improvements to a major thoroughfare, two new Metro station entrances – including to an as-yet-to-be built station – and expansion of transit service in the area. Local governments said they’ve committed to spend $570 million on a collection of projects that will directly benefit Amazon’s new employees.

    […]

    The Virginia Housing Development Agency plans to spend an extra $15 million a year on to promote affordable housing in areas affected by Amazon’s new headquarters for the next five years, according to Gov. Ralph Northam’s office. The quasi-governmental agency is funded through the sale of securities and loans to private investors.

    Arlington and the city of Alexandria plan to use new revenues from Amazon to fund at least $15 million in the next decade to create and preserve 2,000 to 2,400 units of affordable housing.

    […]

    We’ll see.

    Cheers,
    Scott.

  27. 27.

    Kylroy

    @Walker: How rural are you? I’m in Madison, WI, and Epic has done a decent job getting hires both from UW graduates and convincing folks to move here. We’re not rural by any conventional definition, but 95% of the US is rural compared to NYC.

  30. 30.

    TomatoQueen

    DC has the 2nd worst traffic congestion in the country, according to this morning’s tv news, only Boston is worse. And Amazon has chosen to dump 25K more entitled overpaid techies in the most crowded part of the area, right in the middle of the last bastion of so-called affordable housing, which will push out the 1st and 2nd gen Central Americans who live there (oh that couldn’t have been intentional), thanks to rollover and scratch my tummy tactics on the part of local and state official greedheads. Fuckem.

  31. 31.

    PJ

    @HeleninEire: The solution is to get rid of corporate welfare unless it is demonstrated that there is a net gain in tax dollars to a community. The kinds of outrageous subsidies that Amazon would have received have been going on since the financial crisis of 1975 (out of which Trump got his career started with the right to redevelop the Commodore Hotel for a song), and there has never been any proof of a benefit to the city. Two smaller tax breaks for developers in lower and upper Manhattan have cost the city over $400MM and counting over the past two decades, and are set to be phased out because there is no indication they have been anything other than a giveaway to RE developers and owners: http://gothamist.com/2019/02/12/nyc_tax_breaks_development.php. And $400MM, while kind of a drop in the bucket as far as these subsidies would go, would go a fair bit towards fixing the many physical problems of the city’s public housing.

  34. 34.

    rp

    Rochester would have been a good choice. Buffalo, Hartford, or Baltimore also could have worked, NYC was a dumb choice.

  35. 35.

    PJ

    @NotMax: I’m well aware that the PATH is nobody’s idea of transit heaven, and thanks to the Great Joisey Whale, there are no new tunnels under the Hudson (which would be finished about now if they had been started when Obama gave the money to the state) and no one wants to go to Newark if they don’t have to, which is one reason why Amazon won’t go there either, but if Amazon actually gave a shit about helping out wherever they move (which there is no indication they do), they would take a good look at Newark.

  36. 36.

    Ohio Mom

    There are many perfectly capable OLDER computer engineers who would be happy to relocate for the right job. Some of them might actually prefer to live in a lower-cost, somewhat slower-paced area.

    No need for everyone here to unthinkingly echo the pervasive age bias of the engineering field.

  37. 37.

    chopper

    @TomatoQueen:

    crystal city is a weird place. yeah it and pentagon city/aurora highlands are white as fuck. but just south in arlandria yeah it’s got a huge hispanic community that are gonna be priced out right quick.

    my hope here is since CC is on the metro and VRE people can afford to move farther out and not ruin shit nearby.

  39. 39.

    dr. bloor

    @rp: NY Daily News article pointed out that Amazon’s anti-union stance appears to have been an important element. Amazon wouldn’t even pledge to stay “neutral” in response to any unionization efforts in the city, which put Cuomo and DiBlasio in an awkward position, and pissed off the local unions. I suppose that wouldn’t have been as big an issue upstate, though.

  40. 40.

    Mikeindublin

    Lived in Arlington for 10 yrs and my home is still there. Amazon locating there is mostly positive.

    I’m for it as it’ll help solidify my homes rental prospects. Not that it had much trouble being in a highly desirable neighborhood.

    Arlington’s decision was more inclusive of local government while NY’s was not rly from my understanding.

  41. 41.

    Ian G.

    @Roger Moore:

    Yeah, a place like Detroit or Cleveland or Buffalo or St Louis would be a good choice for the PR effect of revitalizing a rust belt city. Also, land for a big campus would be a helluva lot cheaper than in Queens.

    Also, if tech workers are willing to relocate to Pittsburgh, I don’t imagine they’d have a problem with relocating to other revitalized rust belt towns. I mean, Portland and Seattle were both once gritty lumbermill towns.

  42. 42.

    Major Major Major Major

    @PJ:

    The kinds of outrageous subsidies that Amazon would have received have been going on since the financial crisis of 1975

    Indeed, it’s my understanding that most of the amazon incentives were already available to any corporation who wanted to do such a thing; the ones negotiated just for amazon were like a third of it? Depending on how you want to count rezoning and stuff. Could be remembering wrong.

  43. 43.

    Kylroy

    @NotMax: Does it? We’re kind of a colder, smaller Austin, but with proportionally less self-regard.

    In general, I think Amazon can’t go outright rural, but the hinterlands (20-30 minutes out) of some economically depressed Midwest city should provide both cheap land and sufficient infrastructure to meet their needs.

  44. 44.

    Doug R

    One of the things that bugs me here in Western Canuckistan is that west coast American companies as soon as they get a Canadian office, put it in Toronto, even though most stuff shipped from Asia comes through the Port of Vancouver. Nike out of Beaverton/Portland, Micro$oft and Starbucks and Costco and Amazon all out of Seattle-all have Canadian head offices in the greater Toronto area. Even though the first non US McDonalds is in Richmond, BC and the first non US Starbucks was downtown Vancouver. Plus there’s lots of software work done in metro Vancouver, but the Micro$oft office here is just a branch.

  45. 45.

    NotMax

    @PJ

    IMHO if Amazon (or any such behemoth employer) provided significant employee incentives and support to live in Newark, incrementally adjusted over X number of years’ residence, it would have a greater effect than would situating buildings there and having employees commute in and out.

  48. 48.

    Roger Moore

    @TomatoQueen:

    DC has the 2nd worst traffic congestion in the country, according to this morning’s tv news, only Boston is worse.

    I sincerely question any measure of traffic congestion that doesn’t rank Los Angeles as the most congested city in the country.

  51. 51.

    Roger Moore

    @PJ:

    The solution is to get rid of corporate welfare unless it is demonstrated that there is a net gain in tax dollars to a community.

    FTFY. Trying to demonstrate a net gain to the community will just lead to creative accounting. The rule should be no corporate welfare period.

  52. 52.

    PJ

    @NotMax: Good luck getting their workers to decide to live in Newark NOW, even with subsidies (which Amazon is not about to give; it works the other way around – cities give subsidies to Amazon). It would take maybe 5-10 yrs of them commuting to work and amenities coalescing around the offices for people to start seriously considering living there. It took a long time for Jersey City, which is right across the Hudson from Manhattan (unlike Newark) to get redeveloped to the point where it became a desirable (and increasingly unaffordable) place to live.

  53. 53.

    ruemara

    @HeleninEire: Non-NYers don’t know what the fuck is going on. I may not have liked the tax deals, but the areas they were coming into need real jobs. That’s the facts. We shouldn’t have to offer billions in tax breaks. That’s the facts. Amazon should be unionized, because they’re a bigger Walmart. That’s also the facts. The job loss is real as is everything else.

  54. 54.

    Martin

    I kind of object to the characterization of the objection to Amazon. It’s not that the residents objected to Amazon being there, per-se. They objected to $3B of taxpayer money being spent and not getting what they perceived to be $3B of benefit out of Amazon.

  55. 55.

    Roger Moore

    @Ian G.:

    Also, if tech workers are willing to relocate to Pittsburgh

    A lot of the tech workers in Pittsburgh are graduates of the local universities. Carnegie Mellon doesn’t have the cachet of a place like MIT, but it’s one of the top engineering schools in the country, and a huge part of that focus is on computers. The tech industry is big in Pittsburgh because of the local talent, not the other way around.

  56. 56.

    Martin

    @Roger Moore: Yeah. I agree. It’s not that hard to attract business by simply investing in education, quality of live, infrastructure, and so on. You know, all the stuff taxes are supposed to pay for.

  57. 57.

    NotMax

    @PJ

    Don’t disagree on the hurdles. Yet tech workers, particularly, are a ready pool of first adopters. Thinking along the lines of an in-house (and subsidized) mortgage service.

  58. 58.

    Roger Moore

    @Martin:
    Pittsburgh also has a great location. It’s hooked into transportation networks, and the environment is physically attractive when it’s not being ruined by heavy industry.

  59. 59.

    PJ

    @ruemara: LIC has plenty of “real jobs.” Development there is crazy. And if you think more than a small percentage of the promised 25,000 jobs were going to be given to already here NY residents, I hear the Queensboro Bridge is for sale.

    I’m not against Amazon moving here (it’s already here with appx 5000 jobs), I’m against the subsidies, which only make residents poorer.

  63. 63.

    Squidly

    Amazon’s engineers stick around for about two years before rage quitting, and the company runs with a lot of junior engineers. The rest is worse. Other tech companies will spring up to hire the former Amazon employees, since they tend to be good.

    25,000 jobs is 12,500 new residents per year — young, mostly male, with a crapload of spending money and no taste. Most communities can’t handle that growth.

  66. 66.

    Kay

    G. Elliott Morris
    ‏@gelliottmorris
    23h23 hours ago
    More
    Americans are souring on Trump’s tax plan as more and more are filing their 2018 returns

    The “oppose” line just goes straight up in January. I wonder what they thought they were getting? It isn’t the Trumpsters- they don’t care- they’re the steady “support” line, 30 to 35%, I bet. I’m curious what the non-Trumpsters thought was in it for them.

  67. 67.

    Gin & Tonic

    @PJ:

    out of which Trump got his career started with the right to redevelop the Commodore Hotel for a song

    Funny thing, the Hyatt he put in its place is now going to be torn down. The architecture community in NYC is unanimous in its apathy.

  68. 68.

    Martin

    @PJ: That’s really good to hear. LIC was pretty much a shit-hole when I lived there in the 70s. I mean, as I kid I liked it because it was interesting and exciting, but the job situation was not remotely good.

  69. 69.

    NotMax

    @Martin

    Yup. Long Island City was the dingy pits in many ways, a tired, wrung out enclave. Ditto now chic Greenpoint in Brooklyn.

  70. 70.

    Major Major Major Major

    @Kay: from that thread,

  72. 72.

    Kay

    Ronan Delexical
    ‏@delexical
    Just to point out, the tax etc inducements American states, cities and communities are shaken down for by large corporations are illegal in the EU as unfair state aid. It’s amazing that this corporate welfare is tolerated in the US. It’s anti-free market.

  73. 73.

    Gravenstone

    @Kay: Next step, letting the corps set their own tax rates to funnel into their own coffers. Sort of reminiscent of the “company store”, only instead of company scrip, workers just have their own Benjamins rolled back into their employer.

  74. 74.

    PJ

    @Kay: Once a business reaches a certain size in America, it is never in favor of a level playing field in the market. The “free market” is a joke.

  75. 75.

    Jamey

    @PJ: Amazon already has a sizable presence in Newark.They could punch their civic-mindedness card by replacing Prudential as the “Rock” and redeemer of that city.

  77. 77.

    Kay

    @Gravenstone:

    People are actually horrified by this when you tell them about it. It’s the deception, I think. That they believed their taxes were going to the state. The article talks about how taxes are a “compact” between the public and government, that it’s more than money changing hands, and this severs that connection.

  78. 78.

    Kay

    @Gravenstone:

    What’s also amazing is they get paid FIRST. All the other tax users have to get in line and haggle over a budget and they might get cut! They take that portion directly, where no other service has a chance to get any of it. So if you “trim” the budget they’ve already gotten theirs.

  80. 80.

    Uncle Cosmo

    @Walker:

    Far above Cayuga’s waters
    There’s an awful smell.
    Some say it’s Cayuga’s waters,
    We know it’s Cornell!

    :^p

    Spent an annus horribilus in grad school at the Big Red, watching helplessly as most all of my youthful hopes, dreams & plans were crushed. As goldie sez, Fuckem.

    (o/t – Anyone heard from efg recently? 8^O)

  81. 81.

    J R in WV

    @Ruckus:

    Europe had well developed bike lanes long before most places in the US had even heard the term. Also far ahead in mass transit.

    The one time (so far) we visited SW France, we stayed in a rural town, in a nice hotel, where we were told “We hope the train doesn’t bother you!”

    It was electric, two cars for passengers, the loudest part was the bell at the road crossing, which rang for about 90 seconds as the train crossed the road in front of the hotel.

    The thing that astonished us was that there was passenger rail service along a rural river valley that would NEVER have mass transit or any public transit, in America! And light rail in downtown Toulouse, France, outside the cafe we ate lunch in…

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