Amazon's new headquarters: finding the best fit, and the best deal


This is an developing story that needs contributions and expansion. EDIT to add information or discuss in TALK. 

There were 238 North American cities that requested to be home to the next Amazon headquarters, accompanying the online-shipping giant’s original Seattle location. The list of suitors narrowed to 20 metros on Wednesday. They were:

Atlanta, Austin, Boston, Chicago, Columbus OH, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County, Md., Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, N.C., Toronto, Washington, D.C.

Amazon said that the location of the new HQ must have at least 1 million people and have access to good education and mass transit — in short, it must be livable for the modern corporate executive.

But what Amazon is really looking for is a good deal. In their call out for pitches the corporate office said that they were looking for the “best real estate,” “a stable and business-friendly environment and tax structure,” and most importantly “incentive programs.”

The bidding war over Amazon’s next headquarters largely boils down to economic incentives, and which local government is willing to make the most generous offer. Political leaders must determine the tax breaks and treasury money they can afford to give in order to bring high paying jobs and economic activity to their constituents.

Whether an economic incentive package is a corporate giveaway or a coup for taxpayers is difficult to predict. There are many factors in a large corporation’s interactions with a city, and then gradations within each category.

Jobs, Jobs, Jobs. Amazon says that the new headquarters could employ as many as 50,000 people. But no timeline was given as to when this number might be reached, only that it will take “multiple years.”

Investment. Amazon says it will invest $5 billion to build the new campus. It is likely that the concentration of business executives will attract other construction projects as well. Part of the lure of the new corporate headquarters is the possibility of other businesses sprouting up around it.

Housing. While high-paying jobs bring a glut of benefits, it also puts pressure on the housing market. This can put a strain on middle-class and working class families who typically rent.

Amazon’s headquarters in Seattle is in the most expensive real estate market in the USA, according to a study from PwC Research. The shipping company’s presence is a major reason for this.

Activist groups like Obviously not DC indicate that Amazon’s new HQ is not universally welcome by U.S. city residents. Their focus is on what they see as waste in economic incentives, taxpayer money that should be allocated elsewhere.

Contribute to this section using EDIT STORY. Use the format below to add your suggestions to each city.

City offers and challenges

  • Atlanta
    • Location: Atlanta Hartfield-Jackson airport is the busiest in the world, according to Airports Council International, giving Amazon employees access to an international hub that served 104 million passengers in 2016.
  • Austin, Texas
  • Boston
  • Chicago
    • Incentive: A total of $2.25 billion in state and city incentives, including — $1.4 billion in Economic Development for a Growing Economy (EDGE) tax credits from Illinois. The Chicago Sun-Times reports that the bid could be even higher if Amazon chooses specific locations — the Thompson Center or the Michael Reese Hospital – -both large, under-utilized structures.
    • Location: Ten different sites around the city, all with access to public transportation and two international airports. (Chicago Reader)
  • Columbus, Ohio
    • Incentive: The Columbus Dispatch reported the incentive package that Ohio and Columbus put together to lure Amazon.
      • Full property-tax abatement for 15-years. This means that Amazon would not have to pay any additional property taxes for new construction or renovation projects.  says this would save Amazon $456,750 per $1 million of investment in property costs for the 15-year period.
      • 35 percent income-tax refund on withholdings for new full-time employees for 15-years. For every worker hired, Amazon can get a refund of 35 percent of taxes spent on pensions and other saving accounts. That would be up to $50 million annually. (Columbus Dispatch).
    • Existing Presence: Amazon has three data centers in municipalities nearby Columbus, employing over 1,000 workers (Columbus Dispatch). Ohio state government gave Amazon $81 billion over 15 years for the centers (Bloomberg).
    • Construction: 60 percent of city income-tax from Amazon employees will go towards supporting the development and transit. (Columbus Dispatch).
  • Dallas
  • Denver
  • Indianapolis
    • Housing market: The Indianapolis housing market is surging, but prices are still far below the other cities on the Amazon shortlist. Median price to buy a home is $149,000 (Zillow).
    • Infrastructure: The city has become a hub of American transit. Besides the Indianapolis international airport, there are several interstates that run through the metro area.
  • Los Angeles
  • Miami
  • Montgomery County, Md.
  • Nashville, Tenn.
  • Newark, N.J.
    • Incentives: The state of New Jersey offered $7 billion in tax credits, the second largest economic incentive package in U.S. history. (NJ.com). The proposal was made in October 2017 along with the initial 238 offerings.
      • The proposal comes through the Grow New Jersey Assistance Program, which gives tax breaks to businesses that move to the most economically depressed areas of the state. Since Newark is not one of the most depressed areas of NJ, the legislature will have to amend the program in order to give the incentive package to Amazon.
    • Location: Newark is a 19 minute train ride to New York City, giving Amazon potential access to the U.S. financial hub without paying for real estate costs of Manhattan.
    • Presence: Audible, an Amazon company, has headquarters located in Newark.  This gives Amazon a large foot in the door already.
  • New York City
  • Northern Virginia
  • Philadelphia
  • Pittsburgh
  • Raleigh, N.C.
    • Business ClimateCNBC ranked Raleigh as the most suitable destination for Amazon’s HQ2 mainly because of North Carolina’s state tax and regulatory environment.
  • Toronto
  • Washington, D.C.

This is an developing story that needs contributions and expansion. EDIT to add information or discuss in TALK. 

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