Amazon is reportedly splitting HQ2 into two cities, which would prove the whole contest was a massive sham
- Amazon will reportedly split its second headquarters project, known as HQ2, among two cities: Arlington, Virginia and New York City.
- Each city will split the promised $5 billion investment and 50,000 employees.
- Splitting the project among two cities would give fuel for critics of the HQ2 contest who called it a sham designed to maximize tax breaks from cities.
Amazon is reportedly close to selecting the winner of its second headquarters project, or HQ2.
Or should I say "winners."
Turns out, if the New York Times is right, Amazon is close to agreeing to split its HQ2 project among two cities: Arlington, Virginia and New York City. Each city will 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 as HQ2 as reported, everything Amazon promised goes out the window. What makes that different from Amazon's other cities where it has offices, like Boston and Los Angeles?
Will they refer to both sites, which are hundreds of miles away, 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 of Seattle, and they employ 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 might be a distinction for Amazon employees, but for the tax-paying public - who will be footing a large part of the bill thanks to the tax incentives Amazon is demanding - there likely won't be much of one.
Critics of Amazon's long-drawn-out HQ2 process already questioned that a "second headquarters" could even exist. Splitting it into two equal sized headquarters just adds more fuel to their argument that the entire process was a ploy to pit cities against each other 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 its 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?
Read more about Amazon's HQ2 project:
- Amazon made an important investment in Seattle, and it highlights a key issue for HQ2
- Amazon HQ2 candidates are going to great lengths to keep their plans secret
- HQ2 is making cities consider projects they've been ignoring for years - and it shows the power of Amazon
- 7 horrible things that could happen to cities if they win Amazon's HQ2 bid
- The cities where homeowners will benefit the most if Amazon's second headquarters lands there