With billions of dollars and tens of thousands of jobs at stake, Amazon’s search for a second location in North America has pushed 20 cities into a fierce Hunger Games style contest, but at what price?
The US technology and lifestyle giant reduced the list of candidates for 238 applications for the award last week, which could provide an estimated US $ 5bil (RM19.58bil) in investments and 50,000 new jobs.
Amazon hopes to announce a decision later this year on “HQ2,” which will be the same as its Seattle headquarters and is asking the finalists to refine their releases.
This winning city would get a massive economic infusion that could instantly transform it into an important technology centre, said Joseph Parilla, a member of the Brookings Institution.
“The size and scale of Amazon’s investment in its current headquarters have been transformative for that city, so we would also expect that to happen in a winning city,” said Parilla.
Parilla said that each created technology job would have a “domino effect”, creating another three to five jobs for the local economy, including some companies looking for a presence near Amazon.
While many political leaders are taking up the challenge, some analysts have mocked the measure as a trick similar to the dystopian novel where citizens must watch young people fight to the death.
“The real disappointment is the Hunger Games beauty pageant will result in steeping of taxpayers,” said Scott Galloway, a marketing professor at New York University.
Galloway said the competition “highlights the perversion of our nation at the hands of great technology.”
Is it already decided?
Greg LeRoy, executive director of the non-profit group Good Jobs First, suggested that Amazon is organizing “a public relations trick to get the highest tax exemption for the place it had already decided” for its headquarters.
The organization of LeRoy has calculated that Amazon has already received tax subsidies for more than US $ 1bil (RM3.91bil) for its deposits and other facilities and that it is not clear if it is a good business for taxpayers.
“You will have an influx of people; you will have to hire new teachers, expand the lanes, pick up garbage,” he said.
Amazon has said it is looking for metropolitan areas with more than one million people and that they offer a “stable and business-friendly environment”. You will want a region with skilled technical labour and access to international airports.
‘Think big, creatively.’
In its announcement last year for the competition, Amazon urged communities to “think big and creatively when considering real estate locations and options.”
Margaret O’Mara, a professor at the University of Washington who studies high-tech economics, said the list of finalists suggests that Amazon’s move aims to find the best and brightest workers.
“Many of the finalists are grouped on the East Coast, in general, providing a way for Amazon to attract the best talent that can not or does not want to move to Seattle,” O’Mara said.
“It also points out that, despite the abundance of tax breaks that competing cities were hanging before the company, low costs are not the main driver.” The list of finalists includes some of the most expensive places to live in the United States. ”
The list includes the capital of the USA. UU., Washington, where Amazon founder Jeff Bezos has a residence and owns the Washington Post newspaper, as well as the suburban areas of “Northern Virginia” and Montgomery County, Maryland.
The city of New York was also on the list, as was the nearby city of Newark, New Jersey.
Other cities on the list are Boston, Philadelphia, Pittsburgh, Raleigh (North Carolina), Atlanta, Miami, Nashville, Chicago, Indianapolis, Columbus (Ohio), Denver, Los Angeles and two Texas cities: Dallas and Austin. Toronto is the only Canadian city on the list.
The city of Washington has offered a freeze on property taxes for five years in any building that occupies Amazon, salary reimbursements of up to $ 10,000 (RM39,165) for new employees and a corporate tax exemption for five years, according to published documents after a request for public records of WAMU radio.
According to reports, Amazon also received incentives from US $ 7bil (RM27.41bil) from Newark and US $ 2bil (RM7.83bil) from Chicago.
The governor of Maryland, Larry Hogan, presented a package worth US $ 3bil (RM11.74bil) in tax incentives and the US $ 2bil (RM7.83bil) in transportation improvements, calling HQ2 “the greatest opportunity for economic development in a generation “.