The Week in Tech: Amazon Finally Makes an HQ2 Decision
Until recently, Amazon barely involved itself in Seattle’s civic politics. Its growth was steady for more than a decade, only kicking into high gear the past few years. For a while, Amazon’s main involvement with city hall was more about small things like approvals for street vacations than major politics.
That began to change in 2015, when Amazon’s real estate head, John Schoettler, who was deeply involved in the HQ2 search, led the local Chamber of Commerce. Earlier this year, Amazon publicly fought a new tax to pay for homeless services and affordable housing. But there was never a singular moment like this when Seattle got to ask: Do we want Amazon here? If so, do we want taxpayers to pay for it?
When news of a split HQ2 broke, Mayor Jenny Durkan of Seattle said, “I’d call those branch offices.” It’s a good zinger, but while Seattle may want to call it a win, several experts pointed out to me that Amazon will now have three cities to pit against one another for decades to come. Talk about leverage.
And Amazon is still calling the two new locations headquarters. “We know there will be leaders and teams in all three headquarters as we map out the growth,” Jay Carney, a senior vice president at Amazon, told me. “We are already a company that spans the country, with employees in over 45 states. I’m on the leadership team but live in D.C. and am in Seattle today. It reinforces what already exists for us.”
How that division shakes out will be interesting to track. The New York office is already home to much of Amazon’s growing advertising group, which has become almost an obsession among investors because of its high margins. That’s a mix of the technical and creative work that’s already thriving in the city.
Many had suggested that a Washington-area choice could signal a growing dependence on government contracts, like a $10 billion cloud deal for the Defense Department that Amazon is favored to win.
But Amazon’s agreement with Virginia specifically states that the incentives Amazon gets will decrease if more than 10 percent of the work done at that location is for federal contracts, something that reflects the state’s goal of diversifying its economy away from government work. So what’s Amazon’s vision there?