The latest twist in the search for an ideal equal to Seattle makes plenty of sense. The supposed front-runners offer what Amazon wants as much as incentives.
According to the Wall Street Journal and New York Times, Amazon may break its HQ2 in two.
The winners of the great competition would be the Long Island City section of Queens in New York and Northern Virginia, perhaps Crystal City near D.C. and the Pentagon. Dallas is also said to still be in the running.
It may be true, as reported, that Amazon leaders wanted to spread the company’s bets to soak up maximum talent.
Back in the early 1990s, Microsoft’s Bill Gates startled a Forbes writer when he said Goldman Sachs was the competitor that worried him the most.
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“Software is an IQ business,” Gates said. “Microsoft must win the IQ war, or we won’t have a future. I don’t worry about Lotus or IBM, because the smartest guys would rather come to work for Microsoft. Our competitors for IQ are investment banks such as Goldman Sachs and Morgan Stanley.”
This was before the investment banks nearly brought on a second Great Depression, but you get the idea. Having large footprints in two additional highly educated, appealing metropolitan areas gives Amazon an edge on recruiting talent.
Even filling 25,000 positions, much less 50,000, is a heavy lift, even over several years. An economy essentially at full employment has further complicated the mission.
It may also be true that Amazon didn’t want to put so many employees in one place and become a lightning rod for criticism, as it has by some in Seattle. Perhaps. But New York City, Washington and even Dallas are more sophisticated, less captives of college-town outrage culture.
The nearly 240 localities that made proposals for HQ2 would have loved to get Seattle’s “problems” supposedly caused by Amazon. Most, especially the final 20, were willing to put up big incentives for an asset we essentially got for free.
But would two HQ2s really be “full, equal” headquarters with Seattle? No.
So, if this plays out as reported, Seattle has dodged a bullet. Very few companies have two headquarters that wield supreme power. One would have been ascendant — the other stagnant or fading. With two large satellites, Seattle will still be top cat.
Or perhaps Seattle faces a loaded gun. Two large and capable offices, either one of which could become the headquarters of the future, might be a risk. Seattle could see its largest employer fade even without a bone-headed move by City Hall.
What happens in the next recession? Look for where the jobs are cut and where they remain or grow. Would Amazon demand incentives from taxpayers to keep a major presence here, or play us off against the other two “HQ2s” like a certain airplane company I know?
With a corporation as opaque as Amazon, we may never know the full back story to the switcheroo.
For example, was Amazon’s recent bumpy stock ride enough to make Jeff Bezos and his lieutenants more cautious? With two “HQ2s,” it might be easier to be flexible about how, and either whether, each one was built out.
The old Amazon was bracingly willing to ignore Wall Street’s whims and demands for short-term performance. Today’s Amazon is one of Big Tech’s five giants, with plenty to lose if the magic of Amazon shares wears off.
A cynic might say HQ2 was a massive con all along, meant to win corporate welfare from cities where it had already decided to expand.
We will learn more about the incentives when the “HQ2s” announcement comes.
I’m sure the company will happily pocket the scratch, but I’m not sure it would prove decisive.
The three supposed finalists share superior advantages that aren’t found in the other cities on Amazon’s top 20 list. New York has Wall Street and America’s corporate heart. D.C. has federal agencies that are important Amazon clients. Dallas is also an important corporate hub with plenty of less-expensive land (although I am skeptical Big D can make the cut).
All have strong mass-transit systems, universities, cultural offerings and dense, walkable urban fabric. Amazon was never going to a car-dependent suburban office “park,” despite the fever dreams of hundreds of economic-development recruiters.
The company’s request for a “business friendly” environment also seems malleable. Texas is a red state but Dallas is a blue city. Northern Virginia is blue. And bluest of all is New York City.
As it turns out, “business friendly” includes transportation options, inclusiveness, valuing education and science, and the nearness of vibrant cities. No wonder Forbes recently named Seattle the best city for business and careers.
Thus ends this episode of “As The HQ2 Turns.” The finale should come soon.