Amazon is reportedly about to select the winner of its second headquarters project (HQ2).
Or should I say "winner".
If the New York Times is right, Amazon is close to agreeing to divide the HQ2 project into two cities: Arlington, Virginia, and New York City. Each city receives a hitherto unknown part of the 50,000 employees and $ 5 billion that Amazon has promised the winners of the project.
Wait, right? That was not part of the plan.
When Amazon, as reported, selects two cities as HQ2, everything that Amazon has promised is removed from the window. What sets this apart from other Amazon cities where there are offices like Boston and Los Angeles?
Will they refer to both hundreds of miles away as HQ2? Or should we just think of HQ2 as the entire east coast – any city or city reachable from Amtrak's Acela service between New York and Washington, DC.
In fact, Amazon already has a significant number of employees in DC and New York City. The Times says it is the largest number of employees outside Seattle, and they employ thousands of workers in each city.
Does Amazon not extend the meaning of the word "headquarters" here? What is the difference between a big satellite office in a city and what Amazon calls a "headquarters"?
There may be a distinction for Amazon employees, but there probably will not be much for the taxpaying public – which will pay a large part of the bill, thanks to the tax incentives that Amazon demands.
Continue reading:People are angry at Amazon's decision to divide HQ2 between New York City and Virginia after months of deliberation
Critics of Amazon's protracted HQ2 process have already challenged the question of whether a "second headquarters" could even exist. Dividing into two equally sized headquarters adds fuel to maximize incentives, arguing that the entire process was a trick to attracting cities against each other.
It also breaks Amazon's original mandate for the project that HQ2 would be "fully equivalent" to its Seattle headquarters. When it's disconnected, it's not the same.
Amazon has hindered its HQ2 investment so much that the cities were ready to do anything for the chance to land it. Amazon probably took that into account, at least, and realized it would be easier to count the cities Not To take advantage of the opportunity to have Amazon in the backyard, the strategy shifted to maximizing profits.
Although we do not yet know what tax incentives Amazon has offered to select these two cities, and what Amazon offered in return, we can safely assume that they are billions of dollars.
City and state leaders seized the opportunity for a high-level profit – and an obvious advantage that constituents would see and appreciate. The benefits to local communities and governments – economically or otherwise – are now not so obvious.
If Amazon is able to essentially rob millions of dollars of tax revenue from Virginia and New York and not even offer what they originally promised, what else can they do?