retail news in context, analysis with attitude

Now that Amazon has formally announced that its second North American headquarters (HQ2) will in fact be split between two of the finalists - New York’s Long Island City, just across the East River from Manhattan in the borough of Queens, and Arlington, Virginia, in the Crystal City neighborhood, adjacent to National Airport and just across the Potomac River from Washington, DC - there continues to be backlash against the decision and its implications.

The Washington Post writes:

“A big gap in the size of incentives promised by New York and Virginia also stirred concern in the Empire State — and quiet satisfaction in the Old Dominion — that Richmond had cut a better deal than Albany. In the largest single subsidy offered by each state, New York offered tax credits equal to $48,000 per new job, while Virginia agreed to workforce cash grants of $22,000 per job.

“The incentives packages also worried affordable housing activists that too little was promised to deal with the potential effect on housing costs of an influx of tens of thousands of new employees with an average salary of more than $150,000 a year.”

The Post also writes that “the prospect of granting hundreds of millions of dollars of subsidies to a company led by the world’s richest man — Amazon CEO and founder Jeffrey P. Bezos — also drew condemnation in some quarters. (Bezos owns The Washington Post.)

“Two New York lawmakers representing constituents in Long Island City, where one of the two new Amazon headquarters will be located, have pledged to oppose the deal.”

The New York Times writes:

“The anger is real: More than 100 people gathered Wednesday at a protest near the proposed site of Amazon’s new offices, where the company has promised to employ more than 25,000 people in exchange for tax credits, direct state grants and city tax incentives.”

The Times notes that just-re-elected New York Senator Kirsten Gillibrand - a potential contender for the 2020 Democratic presidential nomination - pout out a Tweet saying, “While I’m glad that Amazon recognizes that Queens is a great place to do business, I’m concerned about the lack of community input and the incentives that Amazon received in order to convince them to bring these jobs to New York. One of the wealthiest companies in history should not be receiving financial assistance from the taxpayers while too many New York families struggle to make ends meet.”

The Amazon announcement even brought together strange political alliances, as Tucker Carlson of Fox News found himself agreeing with Democratic Representative-elect Alexandria Ocasio-Cortez.

“Amazon is a billion-dollar company," she wrote on Twitter. "The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here … "Displacement is not community development. Investing in luxury condos is not the same thing as investing in people and families. Shuffling working class people out of a community does not improve their quality of life.”

While Carlson said he hated to admit it, he said he agreed with her: “That’s the only time I’ve ever agreed with Alexandria Ocasio-Cortez, but it’s hard to argue with the internal logic of her point," Carlson said on his nightly program. "The richest man in the world just got $2 billion in taxpayer subsidies? How does that work?"

Seeking Alpha refers to the decision as “a rare Amazon misstep,” and writes:

“The main risk to Amazon was the prospect of antitrust action against it, though I didn't see antitrust action likely in the near future.

“Amazon's recent hike in its minimum wage for American workers was a savvy step to ward that off.

“But the way Amazon has handled its second headquarters saga has squandered some of the good will from the pay raise.”

And here’s another intriguing passage from the Post story (which is ironic considering Bezos’ personal ownership of the Post):

“One provision in Virginia’s package is not financial at all. Virginia agreed to give Amazon at least two days notice if the media or the public filed a Freedom of Information Act request about the agreement. This would ‘allow the Company to seek a protective order or other appropriate remedy’.”
KC's View:
It shows you where my priorities are that this last piece is the one that really outrages me.

It seems, more than I might’ve expected, that maybe this debate has really just begun. I’m not sure that local communities will be able to stop these developments, but I certainly hope that Amazon steps up to address their concerns. There are so many ways that Amazon can be transformational … beyond the ways in which it already has transformed the world.

I hope it steps up.