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Amazon HQ2


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I always thought that HQ2 didn't make sense for a New York or other super-large city. It just doesn't move the needle enough, with all the incentives they have to throw at it.

On the other hand, if this was for a city in like the just below to just above a million range for the metro - that's your Indianapolis, El Paso, Albuquerque, Memphis, Rochester, New Orleans range - it could be much better for all involved. Large enough to have a major airport and a decent population to draw at least some locals from, but small enough that it helps in a bigger way %-wise and sort of puts it "on the map" for other large businesses that add value beyond the direct stuff. Plus less worry there about traffic, housing price issues, etc. And for Amazon, everything there would be immensely cheaper.

 

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  On 2/14/2019 at 7:29 PM, NorthSideSox72 said:

I always thought that HQ2 didn't make sense for a New York or other super-large city. It just doesn't move the needle enough, with all the incentives they have to throw at it.

On the other hand, if this was for a city in like the just below to just above a million range for the metro - that's your Indianapolis, El Paso, Albuquerque, Memphis, Rochester, New Orleans range - it could be much better for all involved. Large enough to have a major airport and a decent population to draw at least some locals from, but small enough that it helps in a bigger way %-wise and sort of puts it "on the map" for other large businesses that add value beyond the direct stuff. Plus less worry there about traffic, housing price issues, etc. And for Amazon, everything there would be immensely cheaper.

 

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It needs a talent pipeline too. Indianapolis and Rochester are the only ones that would be able to provide that drawing from chicago, u of i engineering, umich engineering. 

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  On 2/14/2019 at 7:29 PM, NorthSideSox72 said:

I always thought that HQ2 didn't make sense for a New York or other super-large city. It just doesn't move the needle enough, with all the incentives they have to throw at it.

On the other hand, if this was for a city in like the just below to just above a million range for the metro - that's your Indianapolis, El Paso, Albuquerque, Memphis, Rochester, New Orleans range - it could be much better for all involved. Large enough to have a major airport and a decent population to draw at least some locals from, but small enough that it helps in a bigger way %-wise and sort of puts it "on the map" for other large businesses that add value beyond the direct stuff. Plus less worry there about traffic, housing price issues, etc. And for Amazon, everything there would be immensely cheaper.

 

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In the end, clearly they decided that the population of NYC/DC and access to the governments and facilities in those areas was more important than any of these other things, which is a great reason why those cities shouldn't be putting in extra money to lure them. They even said in their announcement they'd still be expanding in NYC. 

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  On 2/14/2019 at 10:45 PM, bmags said:

It needs a talent pipeline too. Indianapolis and Rochester are the only ones that would be able to provide that drawing from chicago, u of i engineering, umich engineering. 

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That's the downside (though I wasn't really meaning those specific cities beyond just being examples). But I also think, you can't practically put in that many people right away anyway, even in NYC. And people will move to some cities for good jobs (some cities more than others). I think Amazon ends up being forced to grow organically over time whether they want to or not, which takes away some of the advantage of a deeper pool in cities like New York.

I just think, if I'm NYC or Chicago, having HQ2 is overall a good thing, but not enough that I would throw absurd benefits at it. Paraoxically I'd be more willing to throw more at it if I were a smaller, but still decent-sized (million-ish people) city.

 

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  On 2/14/2019 at 6:21 PM, LittleHurt05 said:

Jeff Bezos is a way bigger crook and threat to this nation than the man in the White House.

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He's a good business man. Unless there are laws he's broken in this deal that haven't been publicized.  Good for NYC for not caving into whatever he was demanding. 

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  On 2/14/2019 at 11:19 PM, NorthSideSox72 said:

That's the downside (though I wasn't really meaning those specific cities beyond just being examples). But I also think, you can't practically put in that many people right away anyway, even in NYC. And people will move to some cities for good jobs (some cities more than others). I think Amazon ends up being forced to grow organically over time whether they want to or not, which takes away some of the advantage of a deeper pool in cities like New York.

I just think, if I'm NYC or Chicago, having HQ2 is overall a good thing, but not enough that I would throw absurd benefits at it. Paraoxically I'd be more willing to throw more at it if I were a smaller, but still decent-sized (million-ish people) city.

 

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I don't think there's anything paradoxical about this. New York, DC have huge advantages - strong transit systems, easy access to huge quantities of talented workers, high education rates. If they added 25,000 employees there, that's good for them, but that also taxes the resources in those areas heavily. The fact that it is one of THE few true cities in the country is already the draw for those areas. They shouldn't be needing to offer up huge tax incentives, if the company wants to be there it's not for the tax incentive it's for the benefits of the city.

A smaller city that could use the growth, that isn't going to grow on its own and could use the notoriety, and could also use those workers to help develop a highly educated work force that builds an industry to support the whole city - that's a place that does make sense to offer some money up.

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  On 2/14/2019 at 11:31 PM, ptatc said:

New Orleans has Tulane, Loyola  and LSU not too far away to support them.

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Tulane is wonderful, but that market has nowhere near the MBA and engineering pools to tap that the Midwest in places like Chicago or Indy has (Purdue, u or I, Michigan for computer engineering, Northwestern, u of c, Indiana, notre dame for mba/business)

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  On 2/14/2019 at 11:19 PM, NorthSideSox72 said:

That's the downside (though I wasn't really meaning those specific cities beyond just being examples). But I also think, you can't practically put in that many people right away anyway, even in NYC. And people will move to some cities for good jobs (some cities more than others). I think Amazon ends up being forced to grow organically over time whether they want to or not, which takes away some of the advantage of a deeper pool in cities like New York.

I just think, if I'm NYC or Chicago, having HQ2 is overall a good thing, but not enough that I would throw absurd benefits at it. Paraoxically I'd be more willing to throw more at it if I were a smaller, but still decent-sized (million-ish people) city.

 

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New York and Chicago calcs aren’t same. Chicago has declining population and great fundamentals but still immature tech ecosystem. It is worth more investment to add population and build an economy like that than NYC

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New Yorkers are outraged. There were going to be jobs galore, high paying jobs and other jobs jobs jobs. The neighborhood business owners are crushed; the real estate people are crushed. You give a big company tax breaks because of all the jobs created and ensuing money dumped in the neighborhoods. It's pretty simple. Socialists like AOC don't want to play hardball with companies. A lot of people are upset in New York as they continue to seek work. This would have helped the economy big time.

Read this take. AOC has some explainin' to do.

https://nypost.com/2019/02/14/smug-politicians-scammed-nyc-out-of-amazons-hq2-and-ruined-it-for-everyone/

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  On 2/15/2019 at 5:53 AM, greg775 said:

New Yorkers are outraged. There were going to be jobs galore, high paying jobs and other jobs jobs jobs. The neighborhood business owners are crushed; the real estate people are crushed. You give a big company tax breaks because of all the jobs created and ensuing money dumped in the neighborhoods. It's pretty simple. Socialists like AOC don't want to play hardball with companies. A lot of people are upset in New York as they continue to seek work. This would have helped the economy big time.

Read this take. AOC has some explainin' to do.

https://nypost.com/2019/02/14/smug-politicians-scammed-nyc-out-of-amazons-hq2-and-ruined-it-for-everyone/

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Nah she's representing her people.  If the state of NY was going to give them a 3 billion tax cut for the HQ to be placed there, then it was the state that would be paying those employees not Amazon.  She said they can invest that money elsewhere.  NY doesn't need Amazon some other state can do the subsidizing.

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  On 2/15/2019 at 1:01 AM, bmags said:

Tulane is wonderful, but that market has nowhere near the MBA and engineering pools to tap that the Midwest in places like Chicago or Indy has (Purdue, u or I, Michigan for computer engineering, Northwestern, u of c, Indiana, notre dame for mba/business)

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No but those schools would be sufficient for local talent. No one area is going to supply all 15000 to 25000 employees. It will draw from around the country to bring new people to the city.

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  On 2/15/2019 at 3:22 PM, pettie4sox said:

Nah she's representing her people.  If the state of NY was going to give them a 3 billion tax cut for the HQ to be placed there, then it was the state that would be paying those employees not Amazon.  She said they can invest that money elsewhere.  NY doesn't need Amazon some other state can do the subsidizing.

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I guess they can find 20000 jobs anywhere. Those tax payers would help the state revenue off set the millionaires leaving the state.

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  On 2/15/2019 at 5:11 PM, ptatc said:

I guess they can find 20000 jobs anywhere. Those tax payers would help the state revenue off set the millionaires leaving the state.

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You know, that whole people will leave the state tidbit is a myth, sure some will but not enough to make an impact.  Even after all the awful policies, people won't leave state with elite cities for small states with no revenue potential.

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  On 2/15/2019 at 5:30 PM, pettie4sox said:

You know, that whole people will leave the state tidbit is a myth, sure some will but not enough to make an impact.  Even after all the awful policies, people won't leave state with elite cities for small states with no revenue potential.

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There was an article in one of the NY papers discussing this with their governor Cuomo. He said that the top 1% of the tax payers paid 46% of the revenue in 2017. They raised the taxes on that group and one third of them moved their primary residence to Florida causing a 3.5 billion dollar loss in revenue last year.

People who can afford to move will, if they increase the burden to a critical amount. It's just depends if the state can figure out that critical amount.

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  On 2/15/2019 at 5:43 PM, ptatc said:

There was an article in one of the NY papers discussing this with their governor Cuomo. He said that the top 1% of the tax payers paid 46% of the revenue in 2017. They raised the taxes on that group and one third of them moved their primary residence to Florida causing a 3.5 billion dollar loss in revenue last year.

People who can afford to move will, if they increase the burden to a critical amount. It's just depends if the state can figure out that critical amount.

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You can't keep everyone there but if you think people will stop investing in NY because they wouldn't cave to Amazon's demand that is something else.

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  On 2/15/2019 at 5:08 PM, ptatc said:

No but those schools would be sufficient for local talent. No one area is going to supply all 15000 to 25000 employees. It will draw from around the country to bring new people to the city.

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This is key to what I was saying earlier. Even in NYC, you aren't hiring that many people right away, or even in a year. And any of the cities I listed have at least a handful of schools nearby with IT and/or business related disciplines, but more importantly, recent college grads move to new cities for THESE types of jobs all the time. You will have to import a lot of people, and have to spread the hiring over multiple years, no matter what.

 

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