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Much to everyone’s surprise, Amazon revealed mid-February this year that it will withdraw from building the new headquarters in Long Island, NY. The news of Amazon executives’ decision came only days short of three months following the initial announcement of the company’s plan to build two new headquarters in the US. The other HQ was planned for Arlington, Virginia – in close proximity to the Capitol.
The announcement that became a “breaking news” headline came as an unexpected epilogue to an intriguing storyline. Namely, pinpointing the location for the project was preceded by Amazon’s yearlong campaign and open, public calls to local authorities to pitch to become the place where the new HQ will be built.
The call for authorities to participate was nothing short of tempting. The investment promise of USD 5 billion, coupled with 50,000 new job vacancies with the annual average salary of USD 150,000 was the core of Amazon’s public pledge, with a promise to mirror the amazing corporate vibe of the current Seattle HQ that employs 40,000 people in 33 buildings with 24 employee canteens.
Two hundred and thirty eight cities and local administrations have pitched their offers, citing different reasons why they should be Amazon’s prime pick. Most frequent arguments revolved around tax benefits and free public land to host the new Amazon campus.
When the entire competitive process – closely monitored by the media – ended, Amazon decided to select not one, but two winners to share the first prize. Shortly after the announcement, the news of expected corporate benefits Amazon would receive due to choice of locations have circulated in the media. It was calculated that the value of different tax benefits and other financial stimulations Amazon would receive for the Long Island City undertaking would amount to USD 3 billion. At the same time, the company, as well as local politicians who heartily supported the deal, have actively taken part in consoling the public with approximations that the next twenty years would reap USD 10 billion in salary taxes and expenditures for the local communities of Long Island.
So, what the heck happened? Why did they say no in the end? Especially when everything seemed like a dream-come-true?
The official press release from Amazon cited both local and federal critique in different political circles as a reason not to proceed with the Long Island part of the project. This reflected Amazon’s impression that the venture would not benefit from a full, undivided governmental and local support, and that this particular scenario warrants their decision to abort the construction plans. In essence, it seems that providing most beneficial arrangements for the investment was, simply put, “not enough” if the enterprise lacked unanimous public affirmation. One might even get the impression that the lack of loud cheering and unequivocal excitement, coupled with inadequate applause led to this scenario.
To be clear, we are not picking sides in this melodrama. The story serves only to illustrate the extent of tectonic societal shifts, happening in front of our very eyes. Allow me to contextualize: one of the biggest and richest global companies is publicly inviting governmental representatives and public administration to create special conditions for utilizing public land and accruing tax benefits for the purposes of pursuing a private, corporate interest. In answering the call, public officials and elected representatives have fought hard to offer more, give more and allow more to win the Miss Amazon pageant. It is worth mentioning that due to its efficient tax policies and corresponding corporate structure in line with the US applicable legislation, Amazon paid zero federal corporate income tax in 2018.
The foregoing begs the question: shouldn’t roles be reversed? Wouldn’t it make more sense for public officials to defend the public interest and create better life/work conditions for the entire community that elected them? To identify the community potential and offer the benefits of using public goods to each interested individual, under equal terms? I would love to know whether Long Island City officials as well as all the other 236 cities that were not picked for the Amazon pageant are willing to offer the same benefits to another corporation or entrepreneur? Was this a special preview show put together just for Amazon? The answer to any of the questions seems to be painfully obvious.
In the meantime, just across the pond, a similar scene is taking place in the Balkans. Namely, media outlets reported that Volkswagen is planning to open a new production facility in Eastern Europe, investing EUR 1,4 billion with the expected annual turnover of EUR 4,5 billion. Among prominent contenders playing the potential host, Bulgaria and Serbia are labeled as frontrunners. Nonetheless, Romania, Turkey and North Macedonia are all – allegedly – also running for the title. The winds of speculation coming from media and ongoing cheerleading atmosphere to declare the winner of the rat race add further flavor to the story, minted by the official announcement from the Volkswagen company that sounds more like an official state bureaucratic proclamation than a corporate statement: due to ongoing negotiations with concerned parties we are currently not in position to provide further details related to the outcome of the venture.
One can only imagine the manner in which these negotiations unfold behind closed doors, or to what lengths are concerned politicians and state representatives willing to go to bargain and undersell public property. The not-so-secret ace up their sleeve is nation-wide cheap workforce – that allows auctioning more for less, selling off citizens like cheap market labor. Finally, the end goal is to persuade the grand investor that utilizing one’s country public resources will directly manifest into highest profits for its company.
Whichever country wins the race will only serve for local politicians to boastfully share evidence of another successfully secured foreign investment, equating that with better life for everyone, in a year, or two, five at most.
Perhaps one of those public servants will stop to think about finding a connection in Long Island City administration, or a public officer in the state of New York and ask for advice on how they made it? After all, it is anyone’s guess when Amazon’s search for a global business HQ might take place. Being prepped and ready makes sense, especially when the upcoming future will make us all citizens of Amazon, Google, Apple, Alibaba, Huawei or one of those new states appearing on the horizon; the old ones are disappearing as we speak.
Good night, sweet dreams.