Last week Amazon pulled out of plans to develop a second headquarters, dubbed “HQ2” in Long Island City, Queens, New York.
They promised to bring 50,000 jobs with average salaries of around $100k per year. As a result, around $27.5 billion of taxes, over a decade would flow into state coffers due to this expansion of Amazon in NYC. Not bad. On paper.
The catch - Amazon would get around $3 billion in incentives to develop its HQ2 on an abandoned site in Long Island City.
In anticipation of the proposed development, real estate speculators and business owners bet on an uptick of business in the area. An area underserved with an overcrowded subway and inadequate infrastructure.
Although the expansion of Amazon in the area would be a good boost, so many things were wrong with this publicized campaign by Amazon.
First, a corporation - and a corporation with the world’s richest man - shouldn’t be allowed to run a public competition to see which state would throw the most benefits their way. Other tech companies (Google & Apple for instance) have expanded in the area without much fanfare.
Second, Amazon already has a heavy blue collar tech presence in NYC. NYC was a logical location to scale up for a second headquarters anyway. This competition was just a way to drive a bargain in Amazon’s favor.
Who is the biggest loser here? Amazon? Local politicians & council representatives?
No. Local businesses in Long Island City who were expecting an increase in services (dry cleaning, restaurants etc).
Biggest winner. Amazon. Hard to see them not losing anything at the moment unless steps are proposed to break up Amazon just like Standard Oil was.
The most difficult thing now, facing that idea, compared to the days of Standard Oil is that, there are several Big Tech giants in play. If you break up one, you’ll have to break up them all. Quite a challenge.