A report from Bloomberg reveals new details about Amazon’s thinking throughout the HQ2 search process and how its secretive approach and push for tax incentives strained relationships with New York officials to the point that the tech giant eventually pulled out of the Big Apple.
What happened: Amazon captivated the globe — for better or worse — with its search for a second North American headquarters. Cities and states competed to put together the best incentive package possible to land the tech giant. Bloomberg reported that Jeff Bezos was a driving force behind the push for huge tax incentives. He was motivated by two past deals, according to the report: A Tesla plant in Nevada that got $2.4 billion in incentives following a five-state bidding war and Boeing’s $8.7 billion package from the state of Washington.
What it means: Amazon got 238 HQ2 responses, but the process also hurt the tech giant’s image and rankled officials in cities and states that didn’t make the cut. The company scrapped its traditional so-called “welcome wagon” playbook that it has used to build relationships when embarking on a project in a new place, Bloomberg reported. Amazon went away from being open and willing to answer questions about its plans and instead favored secrecy and the belief that it would be welcomed warmly by the HQ2 winners, according to the report.
The shifting strategy appeared to backfire, as New York officials angry with being left in the dark planted the seeds of resistance to Amazon’s proposal that eventually led to the company backing out of the Big Apple HQ2 deal. In the wake of the process, some states are banding together to try and put an end to HQ2-like economic development bidding wars.
What Amazon is saying: Amazon hasn’t responded to our request for comment, but the company told Bloomberg it has invested $270 billion in 40 states and created more than 500,000 high-quality jobs. Here’s Amazon’s statement to Bloomberg: “We partner with hundreds of communities across the country to bring them new jobs and investment. Like many other companies, we are eligible to access incentive programs created and regulated by cities and states to attract new investors — as they know that these investments pay a long-term dividend in the form of jobs, new economic opportunity, and incremental tax revenue.”
