In September 2017, the e-commerce giant Amazon announced it would be building a second headquarters, dubbed HQ2. In a blog post published on their official website, the company details its needs and goals, claiming the second headquarters will include as many as 50,000 high-paying jobs. This maneuver is meant to supplement the existing Seattle headquarters.
According to Quartz, Amazon received 238 bids to host its new headquarters. However, on January 18, the tech giant narrowed the list down to twenty cities. Toronto, Columbus, Indianapolis, Chicago, Denver, Nashville, Los Angeles, Dallas, Austin, Boston, New York City, Newark, Pittsburgh, Philadelphia, Montgomery County, Washington DC, Raleigh, Northern Virginia, Atlanta and Miami are now the candidates.
Amazon’s HQ2 project seems to have caused a bidding war of sorts, The Intercept reported. Cities are competing, state governments are offering different taxpayer giveaways to reel Amazon in and intensifying their roles in the bidding process. They are actively competing to win the affection of the tech giant and its tycoon owner Jeff Bezos.
For example, Chicago’s bid includes a minimum of $2.25 billion worth of incentives. The city is offering an “incentive package,” Chicago Sun Times reported, which includes $170 million in state sales tax breaks, $450 million in infrastructure improvements and free land worth $100 million, among other things.
Not everyone agrees with the bidding wars. University of Toronto professor Richard Florida wrote a column for CNN, in which he claims cities should do the exact opposite and force Amazon to make merit-based decisions, instead of begging the company for HQ2. Professor Florida thinks the bidding war is economically unproductive, among other things, but also asserts that Amazon is in the wrong for going after taxpayer dollars. They could be used on other public goods, such as schools, parks, transit and housing, he argues.
Mr. Florida is not the only vocal critic of Amazon’s monopolistic tendencies. Rohit Ro Khanna, U.S. Representative for California’s 17th congressional district as a member of the Democratic Party, told The Intercept: “The cities should not compete against each other in a race to the bottom. It’s absurd for the taxpayers to offer subsidies to one of the richest companies in the world.”
Instead of competing against each other, cities should bargain together, Khanna claims, adding that “cities have been left to fend for themselves and are desperate to attract any tech jobs. If the federal government were to support fiber and broadband in cities, an expansion of universities, strong credentialing and apprenticeship programs, and state of the art infrastructure, then they would not be as reliant on the whims of any given company.”
Khanna and Florida are not alone in their criticism. Representative Keith Ellison criticized the bidding wars via Twitter. “Tax breaks to Amazon promised by New Jersey: $7 billion. Tax breaks promised by Illinois: $2 billion. Something is deeply wrong with our economy & democracy when local governments offer up their tax base to a corporation worth over $500 billion,” he wrote.
According to CNN Money, Amazon is worth around $500 billion. Only Apple, Alphabet and Microsoft are worth more.