Amazon has published an open call for cities to pitch it for business. The company wants to open “Amazon HQ2”, a new hub that will mirror its enormous presence in Seattle, rather than act as a secondary location. That site in Washington state has grown to 33 buildings across 8.1 million square feet, housing more than 40,000 employees. All since 1994.
Amazon wants its new hub to house 50,000 employees, and it says it will invest $5 billion (£3.82bn) to achieve that.
It will be an enormous endeavour, taking years of development. But instead of privately exploring locations, the company appears to want the whole process to be public and transparent.
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In reality it will no doubt have more than a pretty good idea of where it wants to be based. Yet the public call-out reads like a job advert for cities that want to become Amazon’s new second home. First behaving like an over-zealous job applicant, the company lists estimates of just how profitable it has made Seattle, before asking: what can you do for us?
Its preferences? Metropolitan areas with more than one million people, a “stable and business-friendly environment”, locations suitably attractive for young self-starters and communities that “think big and creatively when considering locations and real estate options”. It continues, “HQ2 could be, but does not have to be” urban or downtown; similar to Seattle; et cetera.
The 50,000-strong employee base will mean massive new hires for Amazon, though it hasn’t specified in what sectors of its business. Senior executives will also be able to choose to relocate their teams to the new city or split them across the two.
There are a few things Amazon has left out. It does not explain what the presence of 40,000 new employees did to Seattle’s social fabric, and who exactly benefited from the $17 billion increase in personal income to non-Amazon employees there.
In 2016, Seattle-based Zillow released a report estimating how rental costs would continue to spike in certain neighbourhoods, attributing that to their popularity among Amazon workers. It’s a trend we have seen wherever the tech industry lays hold – with San Francisco routinely coming high up in ‘most expensive cities in the world’ lists.
As of 2017, it has been shown that Seattle – also home to another massive tech employer, Microsoft – has seen rents rise 57 per cent in the space of six years, with average renters paying $635 extra compared to 2011. The unending upward trend has forced Seattle’s city council to pass a new law this year preventing landlords from offering special rates to employees of specific companies – as they had been doing with Amazonians.
An investigation concluded that the practices may amount to discrimination – and not just the obvious, pro-Amazon kind. The council commented on the ingrained problem of discrimination within the wider tech industry itself: “Data has shown workforce gaps exist in the tech sector, for example, based on gender and race, which negatively impact groups who are currently underrepresented in the tech workforce. Given Seattle’s high rents and increasing unaffordability, incentives and opportunities for certain groups over others may perpetuate existing racial, gender and other social inequities.”
The council voted unanimously to ban the practice, arguing tech employees “aren’t the tenants that need assistance in the affordability crisis Seattle faces”. What Amazon doesn’t mention in its brief for proposals, but will surely influence its decision, is tax. And states will no doubt be looking to offer preferential rates (where legally possible) to attract the tech giant.
Amazon has been a Seattle stalwart since its humble beginnings storing books in a city basement. And throughout most of that time, Amazon has only collected sales tax in that state, thanks to a legal loophole that came to an end this year. Now, it does not matter where Amazon is based – the argument that a company only charges sales tax in the state it’s based no longer holds, so its good timing to look further afield.
Even Donald Trump – not a great fan of Bezos, whose Washington Post Trump has deemed ‘fake news’ on multiple occasions – weighed in on the matter this year, despite Amazon’s change of tact. “Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep politicians from looking into Amazon no-tax monopoly?” The tweet may have been typically incoherent. But like most tech giants Amazon has tried its best to pay as little tax as possible. Through legal proceedings with the Internal Revenue Service, in which it sought to reclaim $1.5bn in back taxes, it was revealed that Amazon had opened a base in Luxembourg in order to pay lower federal taxes.
In the press release calling for proposals, Amazon does include an extraordinary 205-word disclaimer explaining that although it estimates it contributed $38 billion to Seattle’s economy between 2010 and 2016, any predictions for the future “could differ materially for a variety of reasons, including […] the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims”. The list goes on and on and on, and even includes the unknown trajectory of the global economic climate.
Whatever applicant is successful in wooing Amazon, by whatever means, it will likely put it on the map. A city somewhere in the US will be bracing itself for an influx of 50,000 new “high-paying jobs”, changing the landscape of its rental market and developing a new hipster scene complete with $15 coffees. And with a 205-word disclaimer refusing to guarantee any actual monetary benefit.