1 00:00:04,480 --> 00:00:12,440 Speaker 1: Welcome to tech Stuff, a production from iHeartRadio. He there, 2 00:00:12,520 --> 00:00:16,520 Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland. 3 00:00:16,560 --> 00:00:20,119 Speaker 1: I'm an executive producer with iHeart Podcasts and how the 4 00:00:20,200 --> 00:00:23,080 Speaker 1: tech are you at? So today I thought we could 5 00:00:23,160 --> 00:00:27,600 Speaker 1: revisit something that really happened just a few years ago. 6 00:00:27,800 --> 00:00:30,880 Speaker 1: In fact, I actually did an episode of tech Stuff 7 00:00:31,120 --> 00:00:36,280 Speaker 1: about this back in the fall of twenty eighteen. But 8 00:00:36,400 --> 00:00:40,040 Speaker 1: a lot has changed since then, including the COVID nineteen 9 00:00:40,040 --> 00:00:43,400 Speaker 1: out break, which would throw an enormous monkey wrench into 10 00:00:43,400 --> 00:00:47,960 Speaker 1: the whole thing. And it's all about the controversial Amazon 11 00:00:48,479 --> 00:00:53,559 Speaker 1: HQ two decision and how everything kind of unfolded from 12 00:00:53,680 --> 00:00:58,600 Speaker 1: the moment when Amazon announced a request for proposal. So 13 00:00:59,160 --> 00:01:01,840 Speaker 1: let's get to it. And as I said, there's an 14 00:01:01,880 --> 00:01:05,040 Speaker 1: episode in twenty eighteen about this, and it's so funny 15 00:01:05,080 --> 00:01:08,720 Speaker 1: because obviously a lot, a lot would change from then 16 00:01:08,800 --> 00:01:13,200 Speaker 1: to now, including one of the locations picked for HQ 17 00:01:13,319 --> 00:01:18,759 Speaker 1: two would be dismissed between then and now. At the time, 18 00:01:18,800 --> 00:01:21,080 Speaker 1: I didn't know that was gonna happen, all right, So 19 00:01:21,560 --> 00:01:24,960 Speaker 1: let's get some background before we jump into all this. 20 00:01:25,680 --> 00:01:31,959 Speaker 1: Jeff Bezos founded Amazon in Bellevue, Washington, way back in 21 00:01:32,120 --> 00:01:36,399 Speaker 1: nineteen ninety four, which means it celebrated its thirtieth birthday 22 00:01:36,440 --> 00:01:39,759 Speaker 1: this year. And like a lot of famous tech companies, 23 00:01:39,840 --> 00:01:43,680 Speaker 1: Amazon got its start in a garage. Now. Back then, 24 00:01:44,160 --> 00:01:48,440 Speaker 1: Amazon's business was all about books. You remember, books. You 25 00:01:48,480 --> 00:01:51,920 Speaker 1: would pop onto Amazon dot Com. Actually before it was 26 00:01:52,280 --> 00:01:56,160 Speaker 1: Cadabra as an abracadabra, but it became Amazon. But you 27 00:01:56,160 --> 00:01:58,720 Speaker 1: would pop on Amazon and you would order a book 28 00:01:59,200 --> 00:02:01,200 Speaker 1: that you wanted. You know, maybe it was a book 29 00:02:01,440 --> 00:02:03,400 Speaker 1: it was just hard to track down in your neck 30 00:02:03,400 --> 00:02:06,400 Speaker 1: of the woods, Like maybe there was a limited printing 31 00:02:06,560 --> 00:02:08,720 Speaker 1: of those books and no one near you had it, 32 00:02:08,840 --> 00:02:11,440 Speaker 1: or maybe you live someplace that wasn't close to a bookshop, 33 00:02:11,800 --> 00:02:15,040 Speaker 1: so you go on to Amazon, you'd place your order 34 00:02:15,320 --> 00:02:17,799 Speaker 1: and you wait for a while for Amazon to ship 35 00:02:17,960 --> 00:02:22,480 Speaker 1: the book to you. It was a pretty humble start 36 00:02:22,680 --> 00:02:26,480 Speaker 1: to a business, and it gave no indication that the 37 00:02:26,520 --> 00:02:30,359 Speaker 1: company would grow into one of the largest wealthiest organizations 38 00:02:30,360 --> 00:02:32,720 Speaker 1: in the world, propelling Jeff Bezos to be in the 39 00:02:32,800 --> 00:02:36,960 Speaker 1: running for richest person on Earth. And it would also 40 00:02:37,400 --> 00:02:40,560 Speaker 1: end up being a company that would hoard enormous amounts 41 00:02:40,560 --> 00:02:44,400 Speaker 1: of customer information, mostly to put to the use of 42 00:02:44,600 --> 00:02:49,000 Speaker 1: selling stuff to you more effectively than it had before. Well, 43 00:02:49,320 --> 00:02:51,360 Speaker 1: I'm not going to do a full rundown on the 44 00:02:51,400 --> 00:02:54,120 Speaker 1: history of Amazon. I have done episodes about that in 45 00:02:54,160 --> 00:02:56,680 Speaker 1: the past, and even though a lot has happened since 46 00:02:56,720 --> 00:02:59,919 Speaker 1: the last of those, we're just focusing on really one 47 00:03:00,240 --> 00:03:02,600 Speaker 1: element to it. But I will hit a few high 48 00:03:02,680 --> 00:03:05,440 Speaker 1: points just to kind of mark the passing of time. So, 49 00:03:05,960 --> 00:03:09,720 Speaker 1: unlike lots of other web based businesses that were founded 50 00:03:09,800 --> 00:03:12,840 Speaker 1: in the nineties, Amazon was actually one of the few 51 00:03:12,919 --> 00:03:17,000 Speaker 1: that weathered the insane storm that was the dot com 52 00:03:17,040 --> 00:03:21,080 Speaker 1: bubble burst, as well as the tragedy of the terrorist 53 00:03:21,160 --> 00:03:23,920 Speaker 1: attacks in the United States on nine to eleven. In fact, 54 00:03:24,280 --> 00:03:30,160 Speaker 1: Amazon ultimately posted its first ever profitable quarter at the 55 00:03:30,280 --> 00:03:34,040 Speaker 1: end of two thousand and one. Like many other internet startups, 56 00:03:34,040 --> 00:03:37,000 Speaker 1: the company operated at a loss for the first several 57 00:03:37,120 --> 00:03:41,680 Speaker 1: years of its existence. It required regular investment rounds in 58 00:03:41,760 --> 00:03:45,960 Speaker 1: order to stay afloat, so it was generating more and 59 00:03:46,000 --> 00:03:48,600 Speaker 1: more revenue. Like things were moving in the right direction, 60 00:03:48,800 --> 00:03:51,440 Speaker 1: The losses were coming down, the revenues were coming up, 61 00:03:51,440 --> 00:03:54,280 Speaker 1: but you were still operating mostly in the red. Amazon 62 00:03:54,360 --> 00:03:57,680 Speaker 1: was still losing money year over year, and finally made 63 00:03:57,680 --> 00:03:59,840 Speaker 1: a profitable quarter at the end of two thousand and 64 00:03:59,840 --> 00:04:02,080 Speaker 1: one one, which was an interesting thing to have happened, 65 00:04:02,120 --> 00:04:05,600 Speaker 1: considering that that was in the wake of the September 66 00:04:05,600 --> 00:04:11,600 Speaker 1: eleventh terrorist attacks, so Amazon wouldn't have its first profitable 67 00:04:11,720 --> 00:04:14,960 Speaker 1: year until two thousand and three. That year, it earned 68 00:04:15,080 --> 00:04:18,400 Speaker 1: thirty five million dollars, as opposed to the previous year 69 00:04:18,680 --> 00:04:22,880 Speaker 1: in which it lost nearly one hundred and fifty million dollars. 70 00:04:23,279 --> 00:04:25,960 Speaker 1: So yeah, Amazon was really turning things around. This was 71 00:04:26,040 --> 00:04:28,840 Speaker 1: kind of like the inflection point for the company, and 72 00:04:28,920 --> 00:04:35,000 Speaker 1: also Amazon obviously branched out beyond just selling books. They 73 00:04:35,040 --> 00:04:38,880 Speaker 1: started selling all sorts of stuff. In fact, books would 74 00:04:38,920 --> 00:04:42,640 Speaker 1: just become one of millions of different items carried by 75 00:04:42,680 --> 00:04:47,280 Speaker 1: Amazon over the following years, and it would also experiment 76 00:04:47,320 --> 00:04:50,919 Speaker 1: in other areas as well, such as in digital streaming 77 00:04:51,200 --> 00:04:54,080 Speaker 1: many years later, so Amazon kind of got its hands 78 00:04:54,120 --> 00:04:56,839 Speaker 1: into everything. But two thousand and three was a big year. 79 00:04:56,880 --> 00:05:00,520 Speaker 1: That was also the year that Amazon introduced Amazon webs Services, 80 00:05:00,560 --> 00:05:03,040 Speaker 1: at least in full. The company had already been dipping 81 00:05:03,040 --> 00:05:06,080 Speaker 1: its toe in those waters in previous years, but two 82 00:05:06,120 --> 00:05:08,599 Speaker 1: thousand and three was really where that became a thing, 83 00:05:08,920 --> 00:05:11,880 Speaker 1: and the average person is probably much more familiar with 84 00:05:11,960 --> 00:05:17,240 Speaker 1: Amazon's online storefront, but it's really Amazon's Web Services that 85 00:05:17,400 --> 00:05:20,920 Speaker 1: brings in big bucks. Or to be more precise, actually, 86 00:05:21,240 --> 00:05:24,480 Speaker 1: Amazon Web Services doesn't make the most money out of 87 00:05:24,520 --> 00:05:26,920 Speaker 1: all of Amazon's divisions. I think it's closer to like 88 00:05:27,080 --> 00:05:30,919 Speaker 1: between fifteen and twenty percent on average, so not the most, 89 00:05:31,440 --> 00:05:36,919 Speaker 1: but it's the most profitable division within Amazon because the 90 00:05:36,960 --> 00:05:39,960 Speaker 1: amount of money it's bringing in versus how much it 91 00:05:40,080 --> 00:05:43,640 Speaker 1: costs to operate the division, there's a much larger profit 92 00:05:43,680 --> 00:05:47,120 Speaker 1: margin there. When you're looking at Amazon's other businesses, the 93 00:05:47,520 --> 00:05:52,280 Speaker 1: cost of doing business is so high comparatively speaking, that 94 00:05:52,720 --> 00:05:57,039 Speaker 1: less profit is generated from that revenue. So AWS is 95 00:05:57,080 --> 00:06:01,360 Speaker 1: Amazon's business to business service. They offer cloud computing and 96 00:06:01,520 --> 00:06:05,440 Speaker 1: online development platforms to their various clients, and these days 97 00:06:05,480 --> 00:06:09,560 Speaker 1: that includes providing compute power for startup AI companies, but 98 00:06:09,720 --> 00:06:14,039 Speaker 1: you know, that's another story for another episode. The company 99 00:06:14,080 --> 00:06:17,760 Speaker 1: introduced Amazon Prime in two thousand and five, so at 100 00:06:17,800 --> 00:06:21,039 Speaker 1: the time, for seventy nine bucks a year, customers could 101 00:06:21,080 --> 00:06:24,880 Speaker 1: sign up and receive unlimited two day shipping on their orders. 102 00:06:25,160 --> 00:06:29,320 Speaker 1: Amazon was busy building out distribution centers around the world 103 00:06:29,400 --> 00:06:31,880 Speaker 1: in order to make this a possibility. So the company 104 00:06:32,080 --> 00:06:35,599 Speaker 1: was hard at work streamlining supply chains and making sure 105 00:06:35,640 --> 00:06:38,719 Speaker 1: that goods were really close to where they would be needed. 106 00:06:38,960 --> 00:06:42,080 Speaker 1: And knowing so much about customers through the process of 107 00:06:42,120 --> 00:06:45,560 Speaker 1: like data mining and stuff, Amazon could actually anticipate the 108 00:06:45,640 --> 00:06:48,800 Speaker 1: sorts of things that were needed in different areas and 109 00:06:49,240 --> 00:06:52,839 Speaker 1: move things to where they needed to be proactively and 110 00:06:53,120 --> 00:06:56,080 Speaker 1: be able to deliver on that two day promise in 111 00:06:56,160 --> 00:06:59,719 Speaker 1: lots of different regions. So we have this big company 112 00:06:59,720 --> 00:07:02,839 Speaker 1: that's based out of Washington State, and it has distribution 113 00:07:03,000 --> 00:07:07,479 Speaker 1: centers and data centers all over the place. It is huge. 114 00:07:07,960 --> 00:07:11,480 Speaker 1: By twenty seventeen, the company employed more than half a 115 00:07:11,600 --> 00:07:15,080 Speaker 1: million people. Now, of course, only a fraction of those 116 00:07:15,240 --> 00:07:19,480 Speaker 1: were working at the corporate headquarters in Seattle, Washington. Many 117 00:07:19,560 --> 00:07:22,560 Speaker 1: people were working in things like warehouses and stuff like that. 118 00:07:22,880 --> 00:07:26,520 Speaker 1: But the company's growth was insane, and the higher ups 119 00:07:26,560 --> 00:07:30,520 Speaker 1: decided that what was needed was a second corporate HQ, 120 00:07:30,760 --> 00:07:34,080 Speaker 1: potentially one on the opposite side of the United States 121 00:07:34,080 --> 00:07:39,120 Speaker 1: of America. So on September seventh, twenty seventeen, Amazon released 122 00:07:39,120 --> 00:07:42,480 Speaker 1: a statement alerting the world that the company was looking 123 00:07:42,520 --> 00:07:47,400 Speaker 1: to establish a secondary headquarters HQ two, and this would 124 00:07:47,400 --> 00:07:51,480 Speaker 1: be equivalent to the home operations in Seattle, Washington. The 125 00:07:51,480 --> 00:07:55,840 Speaker 1: company issued an RFP that stands for request for proposal, 126 00:07:56,040 --> 00:07:59,000 Speaker 1: and essentially this was Amazon saying, hey, y'all, we're looking 127 00:07:59,040 --> 00:08:02,840 Speaker 1: to build ourselves away real nice operation someplace. It surely 128 00:08:02,880 --> 00:08:05,440 Speaker 1: will bring a whole message jobs to your doorstep, and 129 00:08:05,520 --> 00:08:07,720 Speaker 1: getting us on your map is certain to put a 130 00:08:07,760 --> 00:08:10,920 Speaker 1: big old feather in your political cap. So if you're interested, 131 00:08:11,200 --> 00:08:15,640 Speaker 1: send us your thoughts, hugs, and kisses. Amazon. Clearly I'm 132 00:08:15,920 --> 00:08:20,720 Speaker 1: paraphrasing here. USA Today's Elizabeth Weiss wrote that at the 133 00:08:20,840 --> 00:08:26,200 Speaker 1: time of Amazon's announcement, the Seattle HQ was the workplace 134 00:08:26,280 --> 00:08:30,640 Speaker 1: for around forty thousand people. Now that's hard for me 135 00:08:30,800 --> 00:08:34,000 Speaker 1: to even imagine. I have only ever worked in offices 136 00:08:34,200 --> 00:08:36,920 Speaker 1: where there were fewer than two hundred people there, and 137 00:08:37,040 --> 00:08:39,800 Speaker 1: usually most of those offices it was actually fewer than 138 00:08:39,880 --> 00:08:43,560 Speaker 1: one hundred people. Why said the Amazon's workforce took up 139 00:08:43,679 --> 00:08:46,920 Speaker 1: nearly twenty percent of all the office space in the 140 00:08:46,960 --> 00:08:50,520 Speaker 1: city of Seattle. So imagine that. Imagine you live in 141 00:08:50,559 --> 00:08:53,320 Speaker 1: a city and you run into someone who's dressed up 142 00:08:53,320 --> 00:08:56,160 Speaker 1: in say, business attire, and you figure there's a one 143 00:08:56,200 --> 00:09:00,560 Speaker 1: out of five chance they work for Amazon. That's crazy. Anyway, 144 00:09:01,160 --> 00:09:03,920 Speaker 1: everyone seemed to take it at face value that Amazon 145 00:09:03,960 --> 00:09:08,040 Speaker 1: of course needed to build a secondary corporate HQ. The 146 00:09:08,080 --> 00:09:11,000 Speaker 1: operations of the company had grown so large and so 147 00:09:11,320 --> 00:09:15,040 Speaker 1: complex that there was really no doubt that expansion was 148 00:09:15,120 --> 00:09:18,520 Speaker 1: required and that it made more sense to move away 149 00:09:18,600 --> 00:09:22,000 Speaker 1: from Seattle, not because Seattle is not a good location, 150 00:09:22,200 --> 00:09:25,760 Speaker 1: but because Seattle was getting tapped out for things like talent, 151 00:09:26,120 --> 00:09:29,400 Speaker 1: So you wanted to locate this partly because it would 152 00:09:29,400 --> 00:09:32,640 Speaker 1: also mean if you say, had a location on the 153 00:09:32,679 --> 00:09:36,199 Speaker 1: East Coast, you would have operating hours that would span 154 00:09:36,520 --> 00:09:39,439 Speaker 1: more of the day, right because the East coast of 155 00:09:39,480 --> 00:09:43,120 Speaker 1: the United States is three hours ahead of the West coast. 156 00:09:43,320 --> 00:09:46,440 Speaker 1: So that seemed like that was a good idea. But 157 00:09:47,120 --> 00:09:50,200 Speaker 1: who was going to get this and in fact, who 158 00:09:50,320 --> 00:09:54,280 Speaker 1: was going to throw their proverbial hat into the ring 159 00:09:54,679 --> 00:09:58,560 Speaker 1: for consideration. Well, actually, let's answer that second question first, 160 00:09:58,600 --> 00:10:01,520 Speaker 1: like who got involved, because, as it would turn out, 161 00:10:02,000 --> 00:10:04,960 Speaker 1: the answer was a whole bunch of cities and various 162 00:10:05,000 --> 00:10:09,200 Speaker 1: other regions that were begging for consideration. In fact, Amazon 163 00:10:09,280 --> 00:10:14,520 Speaker 1: received two hundred thirty eight submissions to their RFP. That's 164 00:10:14,559 --> 00:10:17,920 Speaker 1: a lot of responses, and the applicants included cities in 165 00:10:17,960 --> 00:10:21,640 Speaker 1: the United States as well as in Canada. From October nineteenth, 166 00:10:21,720 --> 00:10:26,600 Speaker 1: twenty seventeen, to January eighteenth, twenty eighteen, the team at 167 00:10:26,679 --> 00:10:29,600 Speaker 1: Amazon began to whittle the list down to a group 168 00:10:29,679 --> 00:10:32,600 Speaker 1: of just twenty finalists, and I'm going to tell you 169 00:10:32,640 --> 00:10:36,839 Speaker 1: what they were. So the finalists for Amazon's HQ two, 170 00:10:37,080 --> 00:10:53,240 Speaker 1: in alphabetical order, They included Atlanta, Georgia, which is my hometown, Austin, Texas, Boston, Massachusetts, Chicago, Illinois, Columbus, Ohio, Dallas, Texas, Denver, Colorado, Indianapolis, Indiana, 171 00:10:53,760 --> 00:11:00,160 Speaker 1: Los Angeles, California, Miami, Florida, Montgomery County, and Maryland. As 172 00:11:00,160 --> 00:11:05,040 Speaker 1: they say in seventeen seventy six, Nashville, Tennessee, Newark, New Jersey, 173 00:11:05,480 --> 00:11:08,960 Speaker 1: New York City, New York State, a region in northern 174 00:11:09,240 --> 00:11:20,040 Speaker 1: Virginia called Arlington County, Philadelphia, Pennsylvania, Pittsburgh, Pennsylvania, Raleigh, North Carolina, Toronto, Ontario, Canada, 175 00:11:20,480 --> 00:11:26,640 Speaker 1: and Washington, DC. Those were the contenders who would win. Well, 176 00:11:26,720 --> 00:11:30,079 Speaker 1: that would be something of a surprise. I'll talk more 177 00:11:30,120 --> 00:11:32,840 Speaker 1: about that, but first, let's take a quick break to 178 00:11:32,880 --> 00:11:45,400 Speaker 1: thank our sponsors. Okay, before the break, I mentioned a 179 00:11:45,679 --> 00:11:48,520 Speaker 1: list of twenty regions that had kind of made the 180 00:11:48,559 --> 00:11:53,120 Speaker 1: short list for Amazon. But even before that list was announced, 181 00:11:53,160 --> 00:11:56,240 Speaker 1: there was this crazy period in which various cities and 182 00:11:56,320 --> 00:11:59,240 Speaker 1: regions that were trying to pull out all the stops 183 00:11:59,280 --> 00:12:03,080 Speaker 1: in an effort to cox Amazon into choosing them for 184 00:12:03,200 --> 00:12:07,520 Speaker 1: the location for HQ two. And it got pretty absurd 185 00:12:07,679 --> 00:12:10,080 Speaker 1: and more than a little gross, or at least it 186 00:12:10,120 --> 00:12:13,360 Speaker 1: was gross if you find some aspects of capitalism to 187 00:12:13,400 --> 00:12:16,560 Speaker 1: be icky, you know, like how some cities will spend 188 00:12:16,600 --> 00:12:20,160 Speaker 1: way more money in an effort to lure businesses into 189 00:12:20,280 --> 00:12:23,040 Speaker 1: them than they would spend to do stuff like, I 190 00:12:23,040 --> 00:12:29,360 Speaker 1: don't know, address infrastructure problems, or fund schools or address 191 00:12:29,480 --> 00:12:32,560 Speaker 1: housing crises. And yeah, we'll have more to say about 192 00:12:32,600 --> 00:12:36,120 Speaker 1: that later because that becomes a big critical point when 193 00:12:36,120 --> 00:12:39,360 Speaker 1: we talk about New York City. So through the first 194 00:12:39,520 --> 00:12:42,640 Speaker 1: half of twenty eighteen or so, you would occasionally see 195 00:12:42,679 --> 00:12:47,920 Speaker 1: news about some city or another making outlandish promises or 196 00:12:48,000 --> 00:12:51,800 Speaker 1: ridiculous public displays in an effort to stand out among 197 00:12:51,880 --> 00:12:56,000 Speaker 1: the other candidates. For example, the city of Tucson, Arizona, 198 00:12:56,080 --> 00:12:58,560 Speaker 1: which I'm sure you'll notice was not on that list 199 00:12:58,600 --> 00:13:02,040 Speaker 1: of twenty on the short list, Tucson sent a plant 200 00:13:02,320 --> 00:13:05,520 Speaker 1: to Jeff Bezos. Not just any plant. It was a 201 00:13:05,679 --> 00:13:11,480 Speaker 1: twenty one foot tall saguaro cactus. Amazon News responded to this, 202 00:13:11,800 --> 00:13:15,040 Speaker 1: saying the company was not allowed to accept gifts, so 203 00:13:15,120 --> 00:13:18,760 Speaker 1: instead it had donated the cactus to a desert museum 204 00:13:19,320 --> 00:13:23,840 Speaker 1: in Birmingham, Alabama. The city put up three giant Amazon 205 00:13:23,880 --> 00:13:28,600 Speaker 1: delivery boxes around town and encouraged citizens to go out 206 00:13:28,640 --> 00:13:31,760 Speaker 1: and take selfies with the boxes, and then to tweet 207 00:13:31,840 --> 00:13:36,360 Speaker 1: their selfies using the hashtag that read bring a to 208 00:13:36,520 --> 00:13:39,000 Speaker 1: b which is cute, but in the end it didn't 209 00:13:39,040 --> 00:13:44,239 Speaker 1: really move the needle. Here in Georgia, to our great embarrassment, 210 00:13:44,880 --> 00:13:47,920 Speaker 1: the city of stone Crest was vying to become the 211 00:13:47,960 --> 00:13:50,480 Speaker 1: new home of Amazon HQ. This was seen as a 212 00:13:50,520 --> 00:13:53,480 Speaker 1: long shot, as stone Crest itself is not a very 213 00:13:53,559 --> 00:13:56,640 Speaker 1: large city. It's actually kind of in the metro Atlanta area. 214 00:13:57,000 --> 00:14:00,120 Speaker 1: It's outside the perimeter. The perimeter, by the way, for 215 00:14:00,160 --> 00:14:03,120 Speaker 1: those not in Atlanta, that's a highway called two eighty five, 216 00:14:03,480 --> 00:14:06,319 Speaker 1: and two eighty five encircles all of the city of 217 00:14:06,400 --> 00:14:10,360 Speaker 1: Atlanta and some of the outlying metro areas. Stonecrest is 218 00:14:10,440 --> 00:14:13,319 Speaker 1: outside of that. It's a little less than a half 219 00:14:13,320 --> 00:14:17,160 Speaker 1: hour drive from downtown Atlanta. The traffic's not bad, but anyway, 220 00:14:17,679 --> 00:14:23,280 Speaker 1: Stonecrest's proposal included the chance for Amazon to essentially have 221 00:14:23,600 --> 00:14:28,720 Speaker 1: its own city within Stonecrest itself. Stonecrest would continue to exist, 222 00:14:29,160 --> 00:14:33,200 Speaker 1: but the city of Amazon would be carved out from 223 00:14:33,240 --> 00:14:39,000 Speaker 1: a space within Stonecrest's holdings, with Stonecrest apparently handling all 224 00:14:39,120 --> 00:14:43,440 Speaker 1: the utilities and municipal things that would be required for 225 00:14:43,520 --> 00:14:46,880 Speaker 1: Amazon to operate. But people figured that Stonecrest didn't really 226 00:14:46,920 --> 00:14:50,640 Speaker 1: have a chance because Atlanta had its own proposal into Amazon, 227 00:14:51,000 --> 00:14:54,440 Speaker 1: and as we would see on that short list, Atlanta 228 00:14:54,600 --> 00:14:58,720 Speaker 1: would end up making it on the list, Stonecrest did not. Now, 229 00:14:58,800 --> 00:15:03,560 Speaker 1: other places were taking a less gimmicky approach, but no 230 00:15:03,760 --> 00:15:08,040 Speaker 1: less effective. New Jersey offered tax breaks amounting to around 231 00:15:08,200 --> 00:15:12,680 Speaker 1: five billion buckaroos. That's a princely sum, if ever there 232 00:15:12,840 --> 00:15:17,240 Speaker 1: was one. Now, this was figured because the deal said 233 00:15:17,280 --> 00:15:20,280 Speaker 1: that the state would offer up to ten thousand dollars 234 00:15:20,560 --> 00:15:25,080 Speaker 1: per job created within New Jersey per year for an 235 00:15:25,240 --> 00:15:29,040 Speaker 1: entire decade. Now, Amazon was pitching the HQ two as 236 00:15:29,080 --> 00:15:32,560 Speaker 1: a project that would ultimately bring in fifty thousand jobs 237 00:15:32,600 --> 00:15:36,600 Speaker 1: to whichever area the facility would be located in. So 238 00:15:36,880 --> 00:15:39,720 Speaker 1: if you take fifty thousand jobs, you multiply that times 239 00:15:39,760 --> 00:15:43,240 Speaker 1: ten thousand dollars, then you multiply that times ten years, 240 00:15:43,560 --> 00:15:46,600 Speaker 1: and you get five billion dollars over that ten year period. 241 00:15:46,960 --> 00:15:50,800 Speaker 1: Other cities offered their own incentives, all eager to convince 242 00:15:50,880 --> 00:15:55,200 Speaker 1: Amazon to pick their location for HQ two. Now, this 243 00:15:55,240 --> 00:15:58,120 Speaker 1: would ruffle feathers in more than a few places. There 244 00:15:58,120 --> 00:16:01,680 Speaker 1: were critics who were arguing that peticians seemed far more 245 00:16:01,760 --> 00:16:04,520 Speaker 1: eager to cater to one of the world's richest human 246 00:16:04,560 --> 00:16:07,720 Speaker 1: beings rather than actually use their powers to make the 247 00:16:07,760 --> 00:16:11,920 Speaker 1: lives of their constituents better and safer. Many people were 248 00:16:11,960 --> 00:16:15,600 Speaker 1: worried that should their own city actually win the bidding, 249 00:16:16,040 --> 00:16:18,680 Speaker 1: it would mean a net loss for the region, that 250 00:16:18,840 --> 00:16:23,240 Speaker 1: whatever benefit Amazon's arrival would bring wouldn't be enough to 251 00:16:23,360 --> 00:16:26,560 Speaker 1: offset what the area had given up in order to 252 00:16:26,640 --> 00:16:33,200 Speaker 1: get Amazon there. I feel this distinctly because living in Atlanta, 253 00:16:33,360 --> 00:16:36,120 Speaker 1: there's still people at least of my age or older 254 00:16:36,520 --> 00:16:40,600 Speaker 1: who are wincing over the Summer Olympics of nineteen ninety 255 00:16:40,680 --> 00:16:45,360 Speaker 1: six because Atlanta bent over backward in order to get 256 00:16:45,400 --> 00:16:49,400 Speaker 1: the Olympics to our city and spent an awful lot 257 00:16:49,440 --> 00:16:52,320 Speaker 1: of money in order to make that happen. And while 258 00:16:52,880 --> 00:16:56,240 Speaker 1: many of the facilities that were built were repurposed after 259 00:16:56,280 --> 00:16:58,680 Speaker 1: the Olympics, so they didn't like just go to waste 260 00:16:58,760 --> 00:17:01,000 Speaker 1: or anything. There were a lot of questions as to 261 00:17:01,080 --> 00:17:05,240 Speaker 1: whether or not it ultimately was worth the expense that 262 00:17:05,359 --> 00:17:08,120 Speaker 1: was paid to get the Olympics there. That's a matter 263 00:17:08,160 --> 00:17:10,240 Speaker 1: for another time, but I mean this is a common thing, 264 00:17:10,600 --> 00:17:14,040 Speaker 1: like within cities where you'll hear about cities that are 265 00:17:14,560 --> 00:17:19,720 Speaker 1: trying to coax a company or other organization into the city, 266 00:17:20,080 --> 00:17:24,080 Speaker 1: and that sometimes the things they're using to coax the 267 00:17:24,160 --> 00:17:27,080 Speaker 1: company end up costing more than any benefit you see 268 00:17:27,200 --> 00:17:29,800 Speaker 1: from the company actually going there. That was a real 269 00:17:29,920 --> 00:17:33,560 Speaker 1: fear in a lot of places. Now this gets complicated 270 00:17:33,600 --> 00:17:38,920 Speaker 1: because many times the actual deals that were being proposed 271 00:17:39,040 --> 00:17:42,520 Speaker 1: were covered by non disclosure agreements, which means they were 272 00:17:42,520 --> 00:17:45,760 Speaker 1: not public knowledge. People were not allowed to talk about 273 00:17:46,000 --> 00:17:49,640 Speaker 1: what was actually in the deal. So we had cases 274 00:17:49,680 --> 00:17:53,280 Speaker 1: where people just didn't know what the cities were agreeing 275 00:17:53,320 --> 00:17:57,720 Speaker 1: to and you wouldn't know until Amazon made its decision. 276 00:17:57,720 --> 00:18:00,360 Speaker 1: And if it shows your city, then presumably at least 277 00:18:00,400 --> 00:18:03,359 Speaker 1: some of the information would become public and maybe you 278 00:18:03,400 --> 00:18:06,080 Speaker 1: wouldn't agree with it. But at the time you weren't 279 00:18:06,080 --> 00:18:09,960 Speaker 1: being told anything, which obviously was not helping with trust issues. 280 00:18:10,400 --> 00:18:16,479 Speaker 1: And you know, some cities were really worried about how 281 00:18:16,920 --> 00:18:20,800 Speaker 1: Amazon would have a big impact on their communities, like 282 00:18:20,840 --> 00:18:23,520 Speaker 1: in New York. I mentioned that earlier. In New York City, 283 00:18:23,560 --> 00:18:27,200 Speaker 1: there were lots of critics who were bringing up questions 284 00:18:27,240 --> 00:18:31,760 Speaker 1: about this, that Amazon's impact on the city would be 285 00:18:31,840 --> 00:18:35,400 Speaker 1: so severe and meanwhile, it would be off the hook 286 00:18:35,480 --> 00:18:38,880 Speaker 1: for paying for that stuff, that all of that burden 287 00:18:38,960 --> 00:18:43,080 Speaker 1: would go to citizens instead. So in New York that 288 00:18:43,240 --> 00:18:48,560 Speaker 1: became a huge conversation about how, Yeah, according to the brokers, 289 00:18:48,880 --> 00:18:52,280 Speaker 1: it's not like they were taking money away from one 290 00:18:52,359 --> 00:18:55,920 Speaker 1: project and giving it to Amazon. The brokers were saying, 291 00:18:55,920 --> 00:18:58,240 Speaker 1: we're not doing that. We're not taking money away from 292 00:18:58,280 --> 00:19:01,960 Speaker 1: anything that's in our budget. We're doing is we're offering 293 00:19:02,119 --> 00:19:06,159 Speaker 1: incentives to Amazon. But the critics were saying, sure, but 294 00:19:06,240 --> 00:19:09,000 Speaker 1: if Amazon takes you up on it, and they build 295 00:19:09,040 --> 00:19:12,240 Speaker 1: this facility and they use that facility, they are going 296 00:19:12,280 --> 00:19:15,879 Speaker 1: to put more stress on our infrastructure, whether that's in 297 00:19:15,920 --> 00:19:19,640 Speaker 1: the school systems, in the roads, in the public transportation, 298 00:19:20,320 --> 00:19:24,040 Speaker 1: whether it's just in all these other things that might 299 00:19:24,200 --> 00:19:26,679 Speaker 1: or might not be intangible. They're going to put a 300 00:19:26,720 --> 00:19:30,520 Speaker 1: strain on that. And meanwhile, through these tax incentives, you're 301 00:19:30,720 --> 00:19:32,879 Speaker 1: not going to require Amazon to pay for them, but 302 00:19:33,000 --> 00:19:35,639 Speaker 1: it has to be paid. Someone has to pay for that, 303 00:19:36,119 --> 00:19:38,919 Speaker 1: so that ends up falling on all the other citizens. 304 00:19:39,080 --> 00:19:42,720 Speaker 1: So what you're essentially doing is giving Amazon a free 305 00:19:42,840 --> 00:19:45,679 Speaker 1: pass and making New Yorkers pay for it. That was 306 00:19:45,720 --> 00:19:48,040 Speaker 1: like the big conversation that was happening in New York, 307 00:19:48,400 --> 00:19:51,280 Speaker 1: And honestly, I think that there's a lot of merit 308 00:19:51,560 --> 00:19:56,359 Speaker 1: in those criticisms. Now, in some cases, the incentives that 309 00:19:56,400 --> 00:19:59,840 Speaker 1: were being offered in these deals would turn out to 310 00:19:59,840 --> 00:20:03,840 Speaker 1: be the ones that didn't have any actual legislative backing. So, 311 00:20:03,880 --> 00:20:06,920 Speaker 1: in other words, the people who were responsible for putting 312 00:20:06,920 --> 00:20:11,440 Speaker 1: the proposal together didn't actually have the authority to make 313 00:20:11,520 --> 00:20:14,840 Speaker 1: the offers they were making. They were doing what some 314 00:20:15,080 --> 00:20:19,679 Speaker 1: salespeople often do. This is based upon my own personal 315 00:20:19,840 --> 00:20:25,880 Speaker 1: observations in that some salespeople will make really big promises 316 00:20:25,920 --> 00:20:29,199 Speaker 1: in order to land a sale, particularly salespeople who were 317 00:20:29,280 --> 00:20:32,679 Speaker 1: on commission. They will make promises to the moon and 318 00:20:32,800 --> 00:20:36,200 Speaker 1: back in order to get the ink on the dotted line, 319 00:20:36,200 --> 00:20:39,760 Speaker 1: and once that ink has dried, they shift to the 320 00:20:39,800 --> 00:20:42,439 Speaker 1: next deal, and meanwhile someone else is left holding the 321 00:20:42,480 --> 00:20:46,359 Speaker 1: bag figuring out how do I deliver upon the promises 322 00:20:46,400 --> 00:20:50,679 Speaker 1: that were made by the salesperson. That stinks. It's not 323 00:20:50,720 --> 00:20:54,280 Speaker 1: the salesperson's job necessarily to deliver upon those promises. They're 324 00:20:54,320 --> 00:20:58,159 Speaker 1: already doing something else. It's your job that sucks. I 325 00:20:58,160 --> 00:21:01,000 Speaker 1: have been that sucker more than once and it is 326 00:21:01,320 --> 00:21:04,480 Speaker 1: no fun. But yeah, there were cases in which Amazon 327 00:21:05,240 --> 00:21:08,119 Speaker 1: was dealing with people who did not have the authority 328 00:21:08,160 --> 00:21:10,640 Speaker 1: to make the deals they were offering. So the next 329 00:21:10,720 --> 00:21:14,280 Speaker 1: step if Amazon had picked those places would be that 330 00:21:14,359 --> 00:21:16,800 Speaker 1: the brokers would have to turn to the legislation and 331 00:21:16,800 --> 00:21:20,399 Speaker 1: say our legislative body rather and say, hey, can we 332 00:21:20,760 --> 00:21:23,320 Speaker 1: agree to make this a law? Because I already kind 333 00:21:23,359 --> 00:21:26,119 Speaker 1: of told Amazon it could have a puppy, so we 334 00:21:26,200 --> 00:21:29,879 Speaker 1: kind of got to get it a puppy. Sorry by then. 335 00:21:29,920 --> 00:21:34,000 Speaker 1: In the end, Amazon did not choose a single place. 336 00:21:34,320 --> 00:21:38,800 Speaker 1: It chose two places. However, as we'll get to Amazon 337 00:21:38,840 --> 00:21:41,560 Speaker 1: would subsequently hit the eject button on one of those 338 00:21:41,560 --> 00:21:44,400 Speaker 1: two choices and ultimately just go back down to one. 339 00:21:44,920 --> 00:21:48,560 Speaker 1: Now Further, some would argue that Amazon's choices would reveal 340 00:21:48,640 --> 00:21:51,520 Speaker 1: that the company had always had its future destinations in 341 00:21:51,600 --> 00:21:56,640 Speaker 1: mind and had never really seriously considered any other potential location. 342 00:21:57,200 --> 00:22:00,520 Speaker 1: So this is not, you know, verified, But there are 343 00:22:00,640 --> 00:22:05,120 Speaker 1: skeptics who said, oh, Amazon always planned for these two 344 00:22:05,160 --> 00:22:09,080 Speaker 1: locations to be the answer. They just said they were 345 00:22:09,200 --> 00:22:13,760 Speaker 1: accepting proposals because it created a bidding war. Like if 346 00:22:13,760 --> 00:22:16,439 Speaker 1: you already know where you're going to move, but you 347 00:22:16,560 --> 00:22:19,960 Speaker 1: also know that your move is something that a lot 348 00:22:20,040 --> 00:22:23,240 Speaker 1: of people are going to look at as a desirable thing, 349 00:22:23,440 --> 00:22:26,240 Speaker 1: like they want you to move into the location, why 350 00:22:26,280 --> 00:22:28,959 Speaker 1: not create a bidding war so that you get the 351 00:22:29,000 --> 00:22:32,719 Speaker 1: sweetest deal possible. Right, Yeah, you know you're already going 352 00:22:32,760 --> 00:22:35,480 Speaker 1: to go there, but they don't know that. So what 353 00:22:35,520 --> 00:22:39,000 Speaker 1: you say is, hey, we're thinking about going someplace. We 354 00:22:39,080 --> 00:22:41,159 Speaker 1: haven't made up our mind yet, what are you going 355 00:22:41,240 --> 00:22:43,680 Speaker 1: to do to convince us to come to your neck 356 00:22:43,720 --> 00:22:47,159 Speaker 1: of the woods. That was the kind of allegation or 357 00:22:47,160 --> 00:22:51,160 Speaker 1: accusation or suspicion. Suspicion is probably the best word for it. 358 00:22:51,600 --> 00:22:54,320 Speaker 1: A lot of people held that Amazon had already had 359 00:22:54,359 --> 00:22:56,720 Speaker 1: in mind where it was going to go, they just 360 00:22:56,760 --> 00:23:00,359 Speaker 1: hadn't told anyone because it was a way to wheedle 361 00:23:00,400 --> 00:23:03,880 Speaker 1: out the best possible deal. Now, I'm not saying Amazon 362 00:23:03,920 --> 00:23:06,960 Speaker 1: actually did stack the deck from the start. However, there 363 00:23:06,960 --> 00:23:10,760 Speaker 1: are other people who don't have a problem floating that possibility. 364 00:23:11,000 --> 00:23:14,159 Speaker 1: For a long time, it actually seemed like Atlanta, Georgia 365 00:23:14,200 --> 00:23:16,880 Speaker 1: was out in the leite Like all the way up 366 00:23:16,920 --> 00:23:21,280 Speaker 1: to almost the end, people thought Atlanta was seriously in 367 00:23:21,359 --> 00:23:24,000 Speaker 1: the running. There was a time when most folks figured 368 00:23:24,040 --> 00:23:26,359 Speaker 1: that Amazon was going to go to Atlanta, to the 369 00:23:26,400 --> 00:23:30,399 Speaker 1: point where bookies in Vegas were giving Atlanta the best 370 00:23:30,440 --> 00:23:34,399 Speaker 1: odds of being the city to become HQ two. But 371 00:23:34,480 --> 00:23:38,480 Speaker 1: that is not where Amazon chose to go. In the end, 372 00:23:38,760 --> 00:23:41,680 Speaker 1: Amazon sort of chose to divide and conquer. Now, part 373 00:23:41,720 --> 00:23:43,560 Speaker 1: of that might have been because it turned out to 374 00:23:43,560 --> 00:23:46,320 Speaker 1: be a lot harder to find a single location that 375 00:23:46,320 --> 00:23:50,119 Speaker 1: would have access to fifty thousand or so tech workers 376 00:23:50,320 --> 00:23:54,000 Speaker 1: that the company was looking to fill out these offices 377 00:23:54,080 --> 00:23:56,720 Speaker 1: over the course of like a decade. There just weren't 378 00:23:56,960 --> 00:24:00,440 Speaker 1: very many great single locations that could handle that kind 379 00:24:00,480 --> 00:24:03,960 Speaker 1: of demand, and so Amazon instead chose to split the 380 00:24:04,119 --> 00:24:08,040 Speaker 1: HQ two into two locations, one in New York City 381 00:24:08,200 --> 00:24:12,000 Speaker 1: specifically Long Island City in Queens, and the other in 382 00:24:12,240 --> 00:24:16,720 Speaker 1: Arlington County in northern Virginia. As we will see, that's 383 00:24:16,800 --> 00:24:20,800 Speaker 1: not exactly how things would turn out. But first let's 384 00:24:20,800 --> 00:24:34,800 Speaker 1: take another quick break. We're back. So Amazon announced their 385 00:24:34,880 --> 00:24:41,880 Speaker 1: decision in November twenty eighteen. The backlash happened almost instantly. Now, 386 00:24:41,880 --> 00:24:44,680 Speaker 1: to be clear, there were plenty of critics who had 387 00:24:44,840 --> 00:24:47,640 Speaker 1: lots to say about how Amazon had conducted the whole 388 00:24:47,640 --> 00:24:50,360 Speaker 1: search in the first place, and then there were even 389 00:24:50,520 --> 00:24:53,680 Speaker 1: more critics about how the various areas that were under 390 00:24:53,720 --> 00:24:57,480 Speaker 1: consideration had tried to outdo one another in publicity stunts 391 00:24:57,480 --> 00:25:02,640 Speaker 1: and incentive packages that were s with NDA's. But when 392 00:25:02,680 --> 00:25:05,680 Speaker 1: Amazon said, yeah, we're actually spliting this up and neither 393 00:25:05,960 --> 00:25:09,520 Speaker 1: of the choices include the cities that were thought to 394 00:25:09,560 --> 00:25:12,320 Speaker 1: be in the top of the running, folks kind of 395 00:25:12,359 --> 00:25:15,640 Speaker 1: flip their lids right Like people were just already assuming 396 00:25:15,680 --> 00:25:18,280 Speaker 1: that Atlanta was going to be the location, for example, 397 00:25:18,400 --> 00:25:21,879 Speaker 1: or maybe Miami, Florida. But when it turned out not 398 00:25:21,960 --> 00:25:24,560 Speaker 1: to be the case, a lot of folks were saying, well, 399 00:25:24,560 --> 00:25:26,679 Speaker 1: that makes no sense. You must have had this planned 400 00:25:26,680 --> 00:25:29,040 Speaker 1: out from the beginning. Now, it did become clear that 401 00:25:29,320 --> 00:25:34,520 Speaker 1: in New York, the city had offered truly massive tax 402 00:25:34,560 --> 00:25:37,840 Speaker 1: breaks more than a billion dollars tied to job creation. 403 00:25:38,160 --> 00:25:42,000 Speaker 1: And remember this is half of the jobs that the 404 00:25:42,240 --> 00:25:45,800 Speaker 1: HQ two was to hold. Right, the original concept was 405 00:25:46,080 --> 00:25:50,479 Speaker 1: a single campus that would house around fifty thousand jobs. 406 00:25:50,760 --> 00:25:54,800 Speaker 1: Instead we're looking at two campuses, each capable of holding 407 00:25:54,840 --> 00:25:58,520 Speaker 1: around twenty five thousand employees. Now, some of the folks 408 00:25:58,560 --> 00:26:01,920 Speaker 1: who brokeered the deal really defended it. Like I said, 409 00:26:01,960 --> 00:26:05,600 Speaker 1: they argued that they weren't taking money from other projects, 410 00:26:05,880 --> 00:26:08,680 Speaker 1: so this was not a net loss in any way, 411 00:26:08,720 --> 00:26:11,159 Speaker 1: shape or form for the city. But then, as I mentioned, 412 00:26:11,200 --> 00:26:13,800 Speaker 1: critics were saying, well, yeah, it's not like you took 413 00:26:13,960 --> 00:26:17,040 Speaker 1: money out of the school budget to give to Amazon, 414 00:26:17,440 --> 00:26:22,159 Speaker 1: but you are offering Amazon the chance to occupy a 415 00:26:22,320 --> 00:26:26,760 Speaker 1: large part of Long Island City, not paying taxes, and 416 00:26:26,840 --> 00:26:31,080 Speaker 1: meanwhile being a burden on taxpayers in the city, And 417 00:26:31,119 --> 00:26:35,280 Speaker 1: that was something you couldn't just dismiss. Now, that was 418 00:26:35,359 --> 00:26:41,880 Speaker 1: an ongoing issue, largely brought by AOC Alexandria Arcasio Cortes, 419 00:26:42,160 --> 00:26:45,399 Speaker 1: who had just recently been elected to the House of 420 00:26:45,440 --> 00:26:50,000 Speaker 1: Representatives in New York, and she was making a very 421 00:26:50,040 --> 00:26:53,640 Speaker 1: strong and passionate argument against the deal that was being 422 00:26:53,680 --> 00:26:56,159 Speaker 1: offered to Amazon. She was not the only one like 423 00:26:56,200 --> 00:27:00,679 Speaker 1: there were Republicans who also disagreed with the deal that 424 00:27:00,840 --> 00:27:03,879 Speaker 1: was being offered. So, as I mentioned before, this was 425 00:27:04,000 --> 00:27:07,160 Speaker 1: something that people across both sides of the aisle had 426 00:27:07,240 --> 00:27:10,840 Speaker 1: agreement upon. They just felt that this was an unnecessary 427 00:27:11,160 --> 00:27:14,679 Speaker 1: gesture to a company led by someone who again was 428 00:27:14,720 --> 00:27:17,040 Speaker 1: frequently in the running to be the richest person in 429 00:27:17,080 --> 00:27:20,680 Speaker 1: the world. Things in Virginia were a little bit similar, 430 00:27:20,760 --> 00:27:23,119 Speaker 1: but you know, they had promised more than half a 431 00:27:23,200 --> 00:27:27,480 Speaker 1: billion dollars in cash grants, again tied to job creation 432 00:27:27,640 --> 00:27:30,720 Speaker 1: within the region, but in Virginia, resistance was a bit 433 00:27:30,760 --> 00:27:34,440 Speaker 1: more muted. It wasn't nearly as passionate as what was 434 00:27:34,480 --> 00:27:38,480 Speaker 1: happening in New York. Also, Virginia had facilities that needed 435 00:27:38,800 --> 00:27:42,320 Speaker 1: to be filled. There were these large campuses of buildings 436 00:27:42,520 --> 00:27:46,480 Speaker 1: that at one time or another belonged to defense contractors, 437 00:27:46,720 --> 00:27:50,040 Speaker 1: but those companies had gone out of business or moved away, 438 00:27:50,359 --> 00:27:54,680 Speaker 1: and so there were some pretty significant office space areas 439 00:27:54,720 --> 00:27:58,560 Speaker 1: that were vacant, and the idea was that, well, we 440 00:27:58,680 --> 00:28:00,840 Speaker 1: need to fill that space up. It's not doing any 441 00:28:00,880 --> 00:28:04,520 Speaker 1: good right now. So that became part of kind of 442 00:28:04,560 --> 00:28:09,000 Speaker 1: the deal to Amazon. There were more than enough questionable 443 00:28:09,000 --> 00:28:12,439 Speaker 1: decisions going around. However, for example, in Virginia, according to 444 00:28:12,480 --> 00:28:15,080 Speaker 1: an article I read by Casey Newton in The Verge, 445 00:28:15,320 --> 00:28:18,320 Speaker 1: the deal brokers had agreed to make sure that Amazon 446 00:28:18,359 --> 00:28:21,680 Speaker 1: would actually receive written notice of any Freedom of Information 447 00:28:21,720 --> 00:28:25,960 Speaker 1: Act public requests in advance, so that the company would 448 00:28:25,960 --> 00:28:28,359 Speaker 1: have kind of a head start to figure out how 449 00:28:28,440 --> 00:28:32,600 Speaker 1: best to protect itself before you know, something potentially nasty 450 00:28:32,760 --> 00:28:36,920 Speaker 1: becomes public information. And many of the folks who had 451 00:28:36,960 --> 00:28:39,800 Speaker 1: tried to land this deal had, as a matter of course, 452 00:28:40,320 --> 00:28:43,880 Speaker 1: done all this, like I said, in secret, so that 453 00:28:44,000 --> 00:28:47,720 Speaker 1: truly undermines citizen trust, like when you find out your 454 00:28:47,800 --> 00:28:51,960 Speaker 1: leaders are secretly making these deals that have huge benefits 455 00:28:52,240 --> 00:28:55,520 Speaker 1: to a company and allowing the company to operate by 456 00:28:55,560 --> 00:28:58,320 Speaker 1: a completely different set of rules than the rest of 457 00:28:58,400 --> 00:29:02,160 Speaker 1: us do. Like I think most Americans have an understanding 458 00:29:02,440 --> 00:29:06,760 Speaker 1: that there are different judicial systems, and those systems depend 459 00:29:06,880 --> 00:29:09,880 Speaker 1: heavily upon how influential and wealthy you are, and the 460 00:29:09,880 --> 00:29:13,080 Speaker 1: more influential and the more wealthy you are, generally speaking, 461 00:29:13,480 --> 00:29:16,840 Speaker 1: the better off you are, and the less repercussions you 462 00:29:16,880 --> 00:29:19,880 Speaker 1: will face if you are ever cold in front of 463 00:29:19,920 --> 00:29:23,560 Speaker 1: the court. And sometimes you know, laws just don't apply 464 00:29:23,640 --> 00:29:26,600 Speaker 1: to you. That's not always the case. If you steal 465 00:29:26,640 --> 00:29:29,200 Speaker 1: from other rich people, for example, you can still be 466 00:29:29,320 --> 00:29:32,440 Speaker 1: sent to you know, prison for a long time. See 467 00:29:32,440 --> 00:29:35,600 Speaker 1: also Sam Beateman freed. But for the most part, if 468 00:29:35,640 --> 00:29:38,440 Speaker 1: you're really wealthy and influential, you don't have to worry 469 00:29:38,440 --> 00:29:41,080 Speaker 1: as much. Well, that seemed to be the feeling people 470 00:29:41,160 --> 00:29:43,720 Speaker 1: were having with these kind of deals with Amazon, that 471 00:29:43,840 --> 00:29:47,400 Speaker 1: Amazon was giving this preferential treatment that no one else 472 00:29:47,560 --> 00:29:50,480 Speaker 1: in the region would receive, and that rubs people the 473 00:29:50,480 --> 00:29:54,840 Speaker 1: wrong way because it's inherently unfair. In New York, politicians 474 00:29:54,840 --> 00:29:58,120 Speaker 1: on both sides raised questions and resistance to the plans, 475 00:29:58,240 --> 00:30:02,240 Speaker 1: and just a few months after Amazon announced its intention 476 00:30:02,400 --> 00:30:05,240 Speaker 1: to move into the Big Apple, the company changed course. 477 00:30:05,720 --> 00:30:08,560 Speaker 1: In February twenty nineteen, Amazon said, you know what, on 478 00:30:08,640 --> 00:30:11,280 Speaker 1: second thought, we're not going to build an HQ in 479 00:30:11,320 --> 00:30:15,520 Speaker 1: Long Island City and they canceled those plans even then, 480 00:30:15,760 --> 00:30:18,200 Speaker 1: like there had been some money, time and effort spent 481 00:30:18,320 --> 00:30:21,440 Speaker 1: on preparing for this, so that was a waste. But yeah, 482 00:30:21,480 --> 00:30:24,400 Speaker 1: Amazon pulled out, and the brokers in New York called 483 00:30:24,400 --> 00:30:27,240 Speaker 1: it one of the biggest tragedies they had ever seen. 484 00:30:27,520 --> 00:30:30,480 Speaker 1: Now keep in mind they said that in twenty nineteen. 485 00:30:31,000 --> 00:30:34,280 Speaker 1: All they needed to do was wait a single year 486 00:30:34,600 --> 00:30:37,880 Speaker 1: and then they would see what a real tragedy actually is, 487 00:30:37,920 --> 00:30:41,480 Speaker 1: because trust me, the pandemic was way worse than a 488 00:30:41,520 --> 00:30:46,240 Speaker 1: big company deciding against moving into town anyway. At that 489 00:30:46,360 --> 00:30:49,640 Speaker 1: point in twenty nineteen, Virginia would become the one and 490 00:30:49,840 --> 00:30:54,080 Speaker 1: only site for HQ two, or maybe HQ one point five, 491 00:30:54,160 --> 00:30:57,920 Speaker 1: because it wasn't as big as HQ was going to be, right, 492 00:30:57,960 --> 00:30:59,880 Speaker 1: it was going to be twenty five thousand people, not 493 00:31:00,120 --> 00:31:04,760 Speaker 1: fifty thousand. So Amazon would also open some supplemental offices, 494 00:31:04,840 --> 00:31:07,000 Speaker 1: one of which would be in New York, one that 495 00:31:07,000 --> 00:31:09,480 Speaker 1: would be in Nashville, Tennessee. They just wouldn't be on 496 00:31:09,560 --> 00:31:14,880 Speaker 1: a scale of an HQ two. So those financial deals 497 00:31:15,400 --> 00:31:19,120 Speaker 1: that Virginia had made, keep in mind, those were tied 498 00:31:19,800 --> 00:31:24,880 Speaker 1: to job creation. But then between Amazon's announcement of the 499 00:31:25,040 --> 00:31:29,480 Speaker 1: HQ two locations, which ultimately would just become Virginia, and 500 00:31:29,560 --> 00:31:32,320 Speaker 1: when HQ two would actually be ready to open, which 501 00:31:32,400 --> 00:31:35,560 Speaker 1: was in the summer of twenty twenty three, we got 502 00:31:35,600 --> 00:31:39,080 Speaker 1: the pandemic and boom, Suddenly people were not going into 503 00:31:39,080 --> 00:31:42,360 Speaker 1: offices at all, even offices that were going to be 504 00:31:42,400 --> 00:31:45,200 Speaker 1: State of the art and the result of huge political 505 00:31:45,200 --> 00:31:48,960 Speaker 1: and financial deals would remain largely empty. Heck, I mean 506 00:31:49,000 --> 00:31:52,640 Speaker 1: the construction work on offices would stop for quite some 507 00:31:52,800 --> 00:31:55,760 Speaker 1: time because of lockdown and things of that nature. So 508 00:31:56,240 --> 00:31:59,320 Speaker 1: Amazon was not ready to open the Virginia facility until 509 00:31:59,440 --> 00:32:02,000 Speaker 1: the summer of twenty twenty three, which, as I'm sure 510 00:32:02,040 --> 00:32:06,080 Speaker 1: you've noticed, came after the pandemic hit. And perhaps this 511 00:32:06,120 --> 00:32:09,480 Speaker 1: is one of many reasons why Amazon has pushed so 512 00:32:09,760 --> 00:32:14,720 Speaker 1: hard for a return to office, because again, the company's 513 00:32:15,200 --> 00:32:19,800 Speaker 1: financial incentives in Virginia are tied to job creation within 514 00:32:19,840 --> 00:32:23,760 Speaker 1: the region, and Amazon just has not been hitting those numbers. 515 00:32:23,920 --> 00:32:26,440 Speaker 1: They have not been on track at all. In fact, 516 00:32:26,760 --> 00:32:30,880 Speaker 1: Tao Armas of The Washington Post reported in April of 517 00:32:30,920 --> 00:32:33,840 Speaker 1: this year that the number of people employed in the 518 00:32:33,920 --> 00:32:39,080 Speaker 1: Virginia office actually shrank last year. The HQ two as 519 00:32:39,080 --> 00:32:41,280 Speaker 1: it stands right now, includes a pair of high rise 520 00:32:41,360 --> 00:32:46,280 Speaker 1: buildings and has a capacity for around fourteen thousand employees. Now, remember, 521 00:32:46,760 --> 00:32:49,719 Speaker 1: the goal ultimately is to hit twenty five thousand, and 522 00:32:49,800 --> 00:32:51,960 Speaker 1: originally the idea was to hit twenty five thousand by 523 00:32:51,960 --> 00:32:54,680 Speaker 1: the end of the twenty twenties. And while it has 524 00:32:54,800 --> 00:32:59,240 Speaker 1: the capacity for fourteen thousand in its existing facilities. Right now, 525 00:32:59,720 --> 00:33:03,400 Speaker 1: it's more like eight thousand people work there. That's according 526 00:33:03,400 --> 00:33:05,760 Speaker 1: to the most recent estimations I could find. It may 527 00:33:05,800 --> 00:33:08,520 Speaker 1: not be exact, it may be more or less, but 528 00:33:08,640 --> 00:33:13,120 Speaker 1: somewhere around eight thousand, so slightly more than half capacity. 529 00:33:13,600 --> 00:33:17,440 Speaker 1: And again there are issues with the remote work. Plus, Amazon, 530 00:33:17,560 --> 00:33:20,000 Speaker 1: like many other tech companies, has held a few rounds 531 00:33:20,040 --> 00:33:23,760 Speaker 1: of layoffs in recent years that has impacted the hiring 532 00:33:23,800 --> 00:33:27,680 Speaker 1: in Virginia. They've had hiring freezes and layoffs. That's really 533 00:33:28,040 --> 00:33:30,880 Speaker 1: part of the problem. That's why the numbers have shrunk. 534 00:33:31,360 --> 00:33:34,040 Speaker 1: And some of this is to do with the pandemic. 535 00:33:34,080 --> 00:33:36,560 Speaker 1: A lot of it is, in fact, because during lockdown, 536 00:33:36,680 --> 00:33:39,400 Speaker 1: a lot of tech companies in particular went into kind 537 00:33:39,440 --> 00:33:43,280 Speaker 1: of a hiring extravaganza. But then once things calmed down, 538 00:33:43,600 --> 00:33:46,000 Speaker 1: when the pandemic began to ease off a little bit, 539 00:33:46,400 --> 00:33:49,440 Speaker 1: there were more hands on deck than we're needed, and 540 00:33:49,480 --> 00:33:52,000 Speaker 1: so companies began to cut back again. We've seen this 541 00:33:52,080 --> 00:33:54,560 Speaker 1: with Meta, We've seen it with Google, We've seen it 542 00:33:54,600 --> 00:33:59,560 Speaker 1: with other places. Elon Musk positively eviscerated staff numbers over 543 00:33:59,600 --> 00:34:02,640 Speaker 1: what used to beat Twitter. So in some ways you 544 00:34:02,680 --> 00:34:06,280 Speaker 1: could argue Amazon was a little more gentle with their layoffs, 545 00:34:06,560 --> 00:34:07,960 Speaker 1: which is a weird way to put it. I don't 546 00:34:08,000 --> 00:34:11,400 Speaker 1: think getting laid off is ever really gentle. It stinks. 547 00:34:11,640 --> 00:34:15,839 Speaker 1: But Amazon maintains that it still wishes to get to 548 00:34:15,920 --> 00:34:20,400 Speaker 1: those twenty five thousand jobs on the books in Virginia. However, 549 00:34:20,719 --> 00:34:23,680 Speaker 1: it may take a little bit longer than they initially 550 00:34:23,719 --> 00:34:26,959 Speaker 1: anticipated when they were brokering these deals in the late 551 00:34:27,040 --> 00:34:31,239 Speaker 1: twenty tens. So according to the company's VP of worldwide 552 00:34:31,280 --> 00:34:35,000 Speaker 1: Economic Development, a woman named Holly Sullivan, the plan is 553 00:34:35,040 --> 00:34:38,719 Speaker 1: to reach the twenty five thousand job milestone in Virginia 554 00:34:38,760 --> 00:34:43,919 Speaker 1: by around twenty thirty eight, so another fourteen years. Ough. 555 00:34:44,680 --> 00:34:48,400 Speaker 1: So the pandemic has really changed things, and you do 556 00:34:48,480 --> 00:34:52,160 Speaker 1: have companies like Amazon that are passing return to office mandates. 557 00:34:52,520 --> 00:34:54,440 Speaker 1: But the reality is that a lot of companies have 558 00:34:54,480 --> 00:34:58,319 Speaker 1: found that remote work works. That's a pretty tough pill 559 00:34:58,400 --> 00:35:01,000 Speaker 1: to swallow when a lot of your strategy has centered 560 00:35:01,000 --> 00:35:05,319 Speaker 1: around the procurement of significant office space. It's tough for 561 00:35:05,520 --> 00:35:09,400 Speaker 1: leaders who envisioned their towns turning into like a city 562 00:35:09,440 --> 00:35:12,279 Speaker 1: of the future, filled with people who are working and 563 00:35:12,400 --> 00:35:17,560 Speaker 1: living and playing in these high tech community centers. Tastefully 564 00:35:17,680 --> 00:35:23,480 Speaker 1: landscaped and designed for ultimate pedestrian maneuverability. Instead, we're getting 565 00:35:23,520 --> 00:35:27,360 Speaker 1: these large office buildings that are dramatically underutilized, with companies 566 00:35:27,360 --> 00:35:32,200 Speaker 1: paying huge bills for rent and electricity and water and stuff, 567 00:35:32,440 --> 00:35:35,959 Speaker 1: and meanwhile only a fraction of employees are even going 568 00:35:36,000 --> 00:35:39,560 Speaker 1: in there. In some ways, I think it's understandable why 569 00:35:39,719 --> 00:35:44,160 Speaker 1: company leaders are pushing back against remote work. They have 570 00:35:44,320 --> 00:35:48,920 Speaker 1: heavily invested in some really expensive stuff, and if no 571 00:35:49,000 --> 00:35:52,160 Speaker 1: one is going to the office, it's hard to justify 572 00:35:52,320 --> 00:35:56,920 Speaker 1: those hefty expenses to your stakeholders, whether they're shareholders or 573 00:35:57,040 --> 00:36:00,600 Speaker 1: private investors. And if people can work from remotely, they 574 00:36:00,719 --> 00:36:04,720 Speaker 1: might not even live in places like Virginia where leaders 575 00:36:04,760 --> 00:36:07,560 Speaker 1: expect you to deliver upon your promise to bring tens 576 00:36:07,600 --> 00:36:09,799 Speaker 1: of thousands of jobs to the region. What if the 577 00:36:09,840 --> 00:36:12,799 Speaker 1: people working for HQ two actually don't live anywhere close 578 00:36:12,840 --> 00:36:14,960 Speaker 1: to Virginia because they don't have to. They can just 579 00:36:15,360 --> 00:36:18,440 Speaker 1: log in remotely and work, well, then you're going to 580 00:36:18,520 --> 00:36:21,000 Speaker 1: have problems trying to get those cash guarantees that you 581 00:36:21,040 --> 00:36:24,000 Speaker 1: are banking on when you brokeer these deals back in 582 00:36:24,040 --> 00:36:27,160 Speaker 1: twenty eighteen. So that's a big problem. Now there are 583 00:36:27,320 --> 00:36:30,680 Speaker 1: other reasons why some bosses want folks to return to office. 584 00:36:30,719 --> 00:36:35,400 Speaker 1: It's not all cynical stuff like justifying the office space 585 00:36:35,760 --> 00:36:39,080 Speaker 1: or improving the optics, because you know, no one wants 586 00:36:39,120 --> 00:36:42,240 Speaker 1: to have a client visit a practically deserted office floor 587 00:36:42,360 --> 00:36:44,520 Speaker 1: that doesn't look good. You want the office to look 588 00:36:44,600 --> 00:36:48,279 Speaker 1: busy and vibrant. So there are those reasons, and those 589 00:36:48,280 --> 00:36:52,440 Speaker 1: are fairly shallow reasons for requiring employees to come back 590 00:36:52,480 --> 00:36:55,120 Speaker 1: to the office. But there are at least some studies 591 00:36:55,120 --> 00:36:59,200 Speaker 1: that have shown that for certain types of jobs, collaboration 592 00:36:59,719 --> 00:37:03,360 Speaker 1: is the most effective when people are working within close 593 00:37:03,400 --> 00:37:08,000 Speaker 1: proximity of one another, particularly with regard to mentoring. So 594 00:37:08,280 --> 00:37:12,120 Speaker 1: that's not the case for everybody, but for engineers, for example, 595 00:37:12,200 --> 00:37:15,759 Speaker 1: coder's computer scientists that kind of thing, they tend to 596 00:37:16,480 --> 00:37:20,839 Speaker 1: benefit from working within proximity to others, particularly if you're 597 00:37:20,840 --> 00:37:23,520 Speaker 1: talking about people who are kind of entry level into 598 00:37:23,520 --> 00:37:27,680 Speaker 1: the position. They receive more frequent and higher quality feedback 599 00:37:28,200 --> 00:37:30,880 Speaker 1: on their work from their peers who happen to be 600 00:37:30,920 --> 00:37:33,880 Speaker 1: working within the same office space than if they would 601 00:37:33,880 --> 00:37:37,920 Speaker 1: if everyone was working remotely. Like, people still get feedback 602 00:37:38,120 --> 00:37:40,680 Speaker 1: on their work when they work remotely, but it doesn't 603 00:37:40,719 --> 00:37:43,200 Speaker 1: tend to be as frequent or as high quality. So 604 00:37:43,680 --> 00:37:46,600 Speaker 1: there are some use cases where a return to office 605 00:37:46,680 --> 00:37:50,400 Speaker 1: has been shown to improve the overall quality of output. 606 00:37:50,760 --> 00:37:53,480 Speaker 1: So I don't want to suggest that the only reasons 607 00:37:53,719 --> 00:37:56,840 Speaker 1: any leaders ever want folks to go back into an 608 00:37:56,880 --> 00:37:59,880 Speaker 1: office are shallow. I don't believe that's the case. I 609 00:38:00,120 --> 00:38:03,000 Speaker 1: do think it's something that has to be considered carefully 610 00:38:03,320 --> 00:38:09,319 Speaker 1: because there are so many other factors that affect your employees. 611 00:38:09,719 --> 00:38:12,600 Speaker 1: For example, cost of living. Right like, there's so many 612 00:38:12,680 --> 00:38:15,120 Speaker 1: tech companies that are in the San Francisco area, but 613 00:38:15,160 --> 00:38:18,400 Speaker 1: I'm sure a lot of you are aware the price 614 00:38:18,560 --> 00:38:22,200 Speaker 1: to live in San Francisco is so high that it's 615 00:38:22,239 --> 00:38:25,839 Speaker 1: prohibitive for a lot of people. So remote work gives 616 00:38:25,880 --> 00:38:29,400 Speaker 1: the ability to get one of those great salary jobs 617 00:38:29,719 --> 00:38:32,200 Speaker 1: but potentially live someplace where it's a much lower cost 618 00:38:32,239 --> 00:38:35,399 Speaker 1: of living. Your dollars go much further, So that makes 619 00:38:35,440 --> 00:38:38,240 Speaker 1: a lot more sense. Being forced to come back into 620 00:38:38,280 --> 00:38:41,160 Speaker 1: the office might mean that you have to relocate. It 621 00:38:41,160 --> 00:38:45,520 Speaker 1: may mean that it's honestly unrealistic that you cannot do 622 00:38:45,680 --> 00:38:48,440 Speaker 1: it because you can't afford to work at the place 623 00:38:48,520 --> 00:38:51,000 Speaker 1: if you have to live there. So like I said, 624 00:38:51,000 --> 00:38:54,319 Speaker 1: it's a delicate thing. It's nuanced, and the problem is 625 00:38:54,360 --> 00:38:58,600 Speaker 1: that corporate policy as a rule doesn't do well with nuance. 626 00:38:59,000 --> 00:39:03,440 Speaker 1: It does broad brush strokes. Anyway, that is what has 627 00:39:03,520 --> 00:39:07,239 Speaker 1: happened to Amazon's HQ two so far. It is a 628 00:39:07,320 --> 00:39:10,800 Speaker 1: work in progress. Clearly, to hit that goal of twenty 629 00:39:10,840 --> 00:39:13,640 Speaker 1: five thousand jobs, Amazon is going to need to build 630 00:39:13,719 --> 00:39:17,120 Speaker 1: even more office space in order to accommodate those extra bodies. 631 00:39:17,239 --> 00:39:19,920 Speaker 1: They only have room for fourteen thousand. But before they 632 00:39:19,960 --> 00:39:22,640 Speaker 1: do that, they still have six thousand empty desks to 633 00:39:22,640 --> 00:39:25,919 Speaker 1: deal with at the existing facilities. I think all those 634 00:39:25,960 --> 00:39:29,799 Speaker 1: cities that previously had bid upon the honor of having 635 00:39:29,920 --> 00:39:33,319 Speaker 1: Amazon come to their town should probably pat themselves on 636 00:39:33,400 --> 00:39:36,160 Speaker 1: the back for having dodged a bullet, unless, of course, 637 00:39:36,360 --> 00:39:39,799 Speaker 1: people have found out more details about those proposals that 638 00:39:39,840 --> 00:39:43,120 Speaker 1: the city had offered to Amazon, then there might be 639 00:39:43,160 --> 00:39:46,160 Speaker 1: some more tough questions to answer. But that's a follow 640 00:39:46,239 --> 00:39:50,160 Speaker 1: up on the story of Amazon's HQ two. There's obviously 641 00:39:50,239 --> 00:39:51,960 Speaker 1: even more than that, and there are a lot of 642 00:39:52,080 --> 00:39:55,279 Speaker 1: complicating issues that I didn't really touch on. But I 643 00:39:55,320 --> 00:39:57,880 Speaker 1: think that that would require almost a full mini series 644 00:39:58,160 --> 00:40:01,880 Speaker 1: to dive into everything from the polytical intrigue to you know, 645 00:40:01,920 --> 00:40:04,359 Speaker 1: I didn't even touch on the fact that Amazon has 646 00:40:04,840 --> 00:40:10,120 Speaker 1: famously been dealing with a lot of resistance from employees. 647 00:40:10,360 --> 00:40:13,759 Speaker 1: A lot of employees in not just office spaces, but 648 00:40:13,880 --> 00:40:17,480 Speaker 1: employees in like the warehouses, have been working toward unionization, 649 00:40:17,800 --> 00:40:21,200 Speaker 1: and how Amazon has opposed that, sometimes to a degree 650 00:40:21,239 --> 00:40:24,960 Speaker 1: that has been questioned as being potentially criminal. All of 651 00:40:25,000 --> 00:40:28,520 Speaker 1: that plays a part into these kinds of stories, but 652 00:40:28,640 --> 00:40:32,600 Speaker 1: again that would probably require its own mini series to 653 00:40:32,719 --> 00:40:35,239 Speaker 1: get into real depth. I just wanted to give kind 654 00:40:35,239 --> 00:40:38,279 Speaker 1: of an overview of how things had turned out because 655 00:40:38,280 --> 00:40:40,480 Speaker 1: I was just looking back on old Tech Stuff episodes 656 00:40:40,520 --> 00:40:42,760 Speaker 1: and I thought, oh, here's something I feel I should 657 00:40:42,760 --> 00:40:45,839 Speaker 1: probably update, because when I recorded the first one, New 658 00:40:45,920 --> 00:40:48,640 Speaker 1: York was still very much going to be one of 659 00:40:48,680 --> 00:40:51,960 Speaker 1: the locations for Amazon's HQ two, and then just a 660 00:40:51,960 --> 00:40:54,439 Speaker 1: few months later that was off the table. Well that's 661 00:40:54,480 --> 00:40:56,759 Speaker 1: it for this episode. I hope all of you out 662 00:40:56,800 --> 00:40:59,240 Speaker 1: there are doing well, and I'll talk to you again 663 00:40:59,600 --> 00:41:09,560 Speaker 1: really soon. Tech Stuff is an iHeartRadio production. For more 664 00:41:09,640 --> 00:41:14,360 Speaker 1: podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or 665 00:41:14,400 --> 00:41:16,320 Speaker 1: wherever you listen to your favorite shows.