WEBVTT - What Happened to Amazon's HQ2? 0:00:04.480 --> 0:00:12.440 Welcome to tech Stuff, a production from iHeartRadio. He there, 0:00:12.520 --> 0:00:16.520 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:16.560 --> 0:00:20.119 I'm an executive producer with iHeart Podcasts and how the 0:00:20.200 --> 0:00:23.080 tech are you at? So today I thought we could 0:00:23.160 --> 0:00:27.600 revisit something that really happened just a few years ago. 0:00:27.800 --> 0:00:30.880 In fact, I actually did an episode of tech Stuff 0:00:31.120 --> 0:00:36.280 about this back in the fall of twenty eighteen. But 0:00:36.400 --> 0:00:40.040 a lot has changed since then, including the COVID nineteen 0:00:40.040 --> 0:00:43.400 out break, which would throw an enormous monkey wrench into 0:00:43.400 --> 0:00:47.960 the whole thing. And it's all about the controversial Amazon 0:00:48.479 --> 0:00:53.559 HQ two decision and how everything kind of unfolded from 0:00:53.680 --> 0:00:58.600 the moment when Amazon announced a request for proposal. So 0:00:59.160 --> 0:01:01.840 let's get to it. And as I said, there's an 0:01:01.880 --> 0:01:05.040 episode in twenty eighteen about this, and it's so funny 0:01:05.080 --> 0:01:08.720 because obviously a lot, a lot would change from then 0:01:08.800 --> 0:01:13.200 to now, including one of the locations picked for HQ 0:01:13.319 --> 0:01:18.759 two would be dismissed between then and now. At the time, 0:01:18.800 --> 0:01:21.080 I didn't know that was gonna happen, all right, So 0:01:21.560 --> 0:01:24.960 let's get some background before we jump into all this. 0:01:25.680 --> 0:01:31.959 Jeff Bezos founded Amazon in Bellevue, Washington, way back in 0:01:32.120 --> 0:01:36.399 nineteen ninety four, which means it celebrated its thirtieth birthday 0:01:36.440 --> 0:01:39.759 this year. And like a lot of famous tech companies, 0:01:39.840 --> 0:01:43.680 Amazon got its start in a garage. Now. Back then, 0:01:44.160 --> 0:01:48.440 Amazon's business was all about books. You remember, books. You 0:01:48.480 --> 0:01:51.920 would pop onto Amazon dot Com. Actually before it was 0:01:52.280 --> 0:01:56.160 Cadabra as an abracadabra, but it became Amazon. But you 0:01:56.160 --> 0:01:58.720 would pop on Amazon and you would order a book 0:01:59.200 --> 0:02:01.200 that you wanted. You know, maybe it was a book 0:02:01.440 --> 0:02:03.400 it was just hard to track down in your neck 0:02:03.400 --> 0:02:06.400 of the woods, Like maybe there was a limited printing 0:02:06.560 --> 0:02:08.720 of those books and no one near you had it, 0:02:08.840 --> 0:02:11.440 or maybe you live someplace that wasn't close to a bookshop, 0:02:11.800 --> 0:02:15.040 so you go on to Amazon, you'd place your order 0:02:15.320 --> 0:02:17.799 and you wait for a while for Amazon to ship 0:02:17.960 --> 0:02:22.480 the book to you. It was a pretty humble start 0:02:22.680 --> 0:02:26.480 to a business, and it gave no indication that the 0:02:26.520 --> 0:02:30.359 company would grow into one of the largest wealthiest organizations 0:02:30.360 --> 0:02:32.720 in the world, propelling Jeff Bezos to be in the 0:02:32.800 --> 0:02:36.960 running for richest person on Earth. And it would also 0:02:37.400 --> 0:02:40.560 end up being a company that would hoard enormous amounts 0:02:40.560 --> 0:02:44.400 of customer information, mostly to put to the use of 0:02:44.600 --> 0:02:49.000 selling stuff to you more effectively than it had before. Well, 0:02:49.320 --> 0:02:51.360 I'm not going to do a full rundown on the 0:02:51.400 --> 0:02:54.120 history of Amazon. I have done episodes about that in 0:02:54.160 --> 0:02:56.680 the past, and even though a lot has happened since 0:02:56.720 --> 0:02:59.919 the last of those, we're just focusing on really one 0:03:00.240 --> 0:03:02.600 element to it. But I will hit a few high 0:03:02.680 --> 0:03:05.440 points just to kind of mark the passing of time. So, 0:03:05.960 --> 0:03:09.720 unlike lots of other web based businesses that were founded 0:03:09.800 --> 0:03:12.840 in the nineties, Amazon was actually one of the few 0:03:12.919 --> 0:03:17.000 that weathered the insane storm that was the dot com 0:03:17.040 --> 0:03:21.080 bubble burst, as well as the tragedy of the terrorist 0:03:21.160 --> 0:03:23.920 attacks in the United States on nine to eleven. In fact, 0:03:24.280 --> 0:03:30.160 Amazon ultimately posted its first ever profitable quarter at the 0:03:30.280 --> 0:03:34.040 end of two thousand and one. Like many other internet startups, 0:03:34.040 --> 0:03:37.000 the company operated at a loss for the first several 0:03:37.120 --> 0:03:41.680 years of its existence. It required regular investment rounds in 0:03:41.760 --> 0:03:45.960 order to stay afloat, so it was generating more and 0:03:46.000 --> 0:03:48.600 more revenue. Like things were moving in the right direction, 0:03:48.800 --> 0:03:51.440 The losses were coming down, the revenues were coming up, 0:03:51.440 --> 0:03:54.280 but you were still operating mostly in the red. Amazon 0:03:54.360 --> 0:03:57.680 was still losing money year over year, and finally made 0:03:57.680 --> 0:03:59.840 a profitable quarter at the end of two thousand and 0:03:59.840 --> 0:04:02.080 one one, which was an interesting thing to have happened, 0:04:02.120 --> 0:04:05.600 considering that that was in the wake of the September 0:04:05.600 --> 0:04:11.600 eleventh terrorist attacks, so Amazon wouldn't have its first profitable 0:04:11.720 --> 0:04:14.960 year until two thousand and three. That year, it earned 0:04:15.080 --> 0:04:18.400 thirty five million dollars, as opposed to the previous year 0:04:18.680 --> 0:04:22.880 in which it lost nearly one hundred and fifty million dollars. 0:04:23.279 --> 0:04:25.960 So yeah, Amazon was really turning things around. This was 0:04:26.040 --> 0:04:28.840 kind of like the inflection point for the company, and 0:04:28.920 --> 0:04:35.000 also Amazon obviously branched out beyond just selling books. They 0:04:35.040 --> 0:04:38.880 started selling all sorts of stuff. In fact, books would 0:04:38.920 --> 0:04:42.640 just become one of millions of different items carried by 0:04:42.680 --> 0:04:47.280 Amazon over the following years, and it would also experiment 0:04:47.320 --> 0:04:50.919 in other areas as well, such as in digital streaming 0:04:51.200 --> 0:04:54.080 many years later, so Amazon kind of got its hands 0:04:54.120 --> 0:04:56.839 into everything. But two thousand and three was a big year. 0:04:56.880 --> 0:05:00.520 That was also the year that Amazon introduced Amazon webs Services, 0:05:00.560 --> 0:05:03.040 at least in full. The company had already been dipping 0:05:03.040 --> 0:05:06.080 its toe in those waters in previous years, but two 0:05:06.120 --> 0:05:08.599 thousand and three was really where that became a thing, 0:05:08.920 --> 0:05:11.880 and the average person is probably much more familiar with 0:05:11.960 --> 0:05:17.240 Amazon's online storefront, but it's really Amazon's Web Services that 0:05:17.400 --> 0:05:20.920 brings in big bucks. Or to be more precise, actually, 0:05:21.240 --> 0:05:24.480 Amazon Web Services doesn't make the most money out of 0:05:24.520 --> 0:05:26.920 all of Amazon's divisions. I think it's closer to like 0:05:27.080 --> 0:05:30.919 between fifteen and twenty percent on average, so not the most, 0:05:31.440 --> 0:05:36.919 but it's the most profitable division within Amazon because the 0:05:36.960 --> 0:05:39.960 amount of money it's bringing in versus how much it 0:05:40.080 --> 0:05:43.640 costs to operate the division, there's a much larger profit 0:05:43.680 --> 0:05:47.120 margin there. When you're looking at Amazon's other businesses, the 0:05:47.520 --> 0:05:52.280 cost of doing business is so high comparatively speaking, that 0:05:52.720 --> 0:05:57.039 less profit is generated from that revenue. So AWS is 0:05:57.080 --> 0:06:01.360 Amazon's business to business service. They offer cloud computing and 0:06:01.520 --> 0:06:05.440 online development platforms to their various clients, and these days 0:06:05.480 --> 0:06:09.560 that includes providing compute power for startup AI companies, but 0:06:09.720 --> 0:06:14.039 you know, that's another story for another episode. The company 0:06:14.080 --> 0:06:17.760 introduced Amazon Prime in two thousand and five, so at 0:06:17.800 --> 0:06:21.039 the time, for seventy nine bucks a year, customers could 0:06:21.080 --> 0:06:24.880 sign up and receive unlimited two day shipping on their orders. 0:06:25.160 --> 0:06:29.320 Amazon was busy building out distribution centers around the world 0:06:29.400 --> 0:06:31.880 in order to make this a possibility. So the company 0:06:32.080 --> 0:06:35.599 was hard at work streamlining supply chains and making sure 0:06:35.640 --> 0:06:38.719 that goods were really close to where they would be needed. 0:06:38.960 --> 0:06:42.080 And knowing so much about customers through the process of 0:06:42.120 --> 0:06:45.560 like data mining and stuff, Amazon could actually anticipate the 0:06:45.640 --> 0:06:48.800 sorts of things that were needed in different areas and 0:06:49.240 --> 0:06:52.839 move things to where they needed to be proactively and 0:06:53.120 --> 0:06:56.080 be able to deliver on that two day promise in 0:06:56.160 --> 0:06:59.719 lots of different regions. So we have this big company 0:06:59.720 --> 0:07:02.839 that's based out of Washington State, and it has distribution 0:07:03.000 --> 0:07:07.479 centers and data centers all over the place. It is huge. 0:07:07.960 --> 0:07:11.480 By twenty seventeen, the company employed more than half a 0:07:11.600 --> 0:07:15.080 million people. Now, of course, only a fraction of those 0:07:15.240 --> 0:07:19.480 were working at the corporate headquarters in Seattle, Washington. Many 0:07:19.560 --> 0:07:22.560 people were working in things like warehouses and stuff like that. 0:07:22.880 --> 0:07:26.520 But the company's growth was insane, and the higher ups 0:07:26.560 --> 0:07:30.520 decided that what was needed was a second corporate HQ, 0:07:30.760 --> 0:07:34.080 potentially one on the opposite side of the United States 0:07:34.080 --> 0:07:39.120 of America. So on September seventh, twenty seventeen, Amazon released 0:07:39.120 --> 0:07:42.480 a statement alerting the world that the company was looking 0:07:42.520 --> 0:07:47.400 to establish a secondary headquarters HQ two, and this would 0:07:47.400 --> 0:07:51.480 be equivalent to the home operations in Seattle, Washington. The 0:07:51.480 --> 0:07:55.840 company issued an RFP that stands for request for proposal, 0:07:56.040 --> 0:07:59.000 and essentially this was Amazon saying, hey, y'all, we're looking 0:07:59.040 --> 0:08:02.840 to build ourselves away real nice operation someplace. It surely 0:08:02.880 --> 0:08:05.440 will bring a whole message jobs to your doorstep, and 0:08:05.520 --> 0:08:07.720 getting us on your map is certain to put a 0:08:07.760 --> 0:08:10.920 big old feather in your political cap. So if you're interested, 0:08:11.200 --> 0:08:15.640 send us your thoughts, hugs, and kisses. Amazon. Clearly I'm 0:08:15.920 --> 0:08:20.720 paraphrasing here. USA Today's Elizabeth Weiss wrote that at the 0:08:20.840 --> 0:08:26.200 time of Amazon's announcement, the Seattle HQ was the workplace 0:08:26.280 --> 0:08:30.640 for around forty thousand people. Now that's hard for me 0:08:30.800 --> 0:08:34.000 to even imagine. I have only ever worked in offices 0:08:34.200 --> 0:08:36.920 where there were fewer than two hundred people there, and 0:08:37.040 --> 0:08:39.800 usually most of those offices it was actually fewer than 0:08:39.880 --> 0:08:43.560 one hundred people. Why said the Amazon's workforce took up 0:08:43.679 --> 0:08:46.920 nearly twenty percent of all the office space in the 0:08:46.960 --> 0:08:50.520 city of Seattle. So imagine that. Imagine you live in 0:08:50.559 --> 0:08:53.320 a city and you run into someone who's dressed up 0:08:53.320 --> 0:08:56.160 in say, business attire, and you figure there's a one 0:08:56.200 --> 0:09:00.560 out of five chance they work for Amazon. That's crazy. Anyway, 0:09:01.160 --> 0:09:03.920 everyone seemed to take it at face value that Amazon 0:09:03.960 --> 0:09:08.040 of course needed to build a secondary corporate HQ. The 0:09:08.080 --> 0:09:11.000 operations of the company had grown so large and so 0:09:11.320 --> 0:09:15.040 complex that there was really no doubt that expansion was 0:09:15.120 --> 0:09:18.520 required and that it made more sense to move away 0:09:18.600 --> 0:09:22.000 from Seattle, not because Seattle is not a good location, 0:09:22.200 --> 0:09:25.760 but because Seattle was getting tapped out for things like talent, 0:09:26.120 --> 0:09:29.400 So you wanted to locate this partly because it would 0:09:29.400 --> 0:09:32.640 also mean if you say, had a location on the 0:09:32.679 --> 0:09:36.199 East Coast, you would have operating hours that would span 0:09:36.520 --> 0:09:39.439 more of the day, right because the East coast of 0:09:39.480 --> 0:09:43.120 the United States is three hours ahead of the West coast. 0:09:43.320 --> 0:09:46.440 So that seemed like that was a good idea. But 0:09:47.120 --> 0:09:50.200 who was going to get this and in fact, who 0:09:50.320 --> 0:09:54.280 was going to throw their proverbial hat into the ring 0:09:54.679 --> 0:09:58.560 for consideration. Well, actually, let's answer that second question first, 0:09:58.600 --> 0:10:01.520 like who got involved, because, as it would turn out, 0:10:02.000 --> 0:10:04.960 the answer was a whole bunch of cities and various 0:10:05.000 --> 0:10:09.200 other regions that were begging for consideration. In fact, Amazon 0:10:09.280 --> 0:10:14.520 received two hundred thirty eight submissions to their RFP. That's 0:10:14.559 --> 0:10:17.920 a lot of responses, and the applicants included cities in 0:10:17.960 --> 0:10:21.640 the United States as well as in Canada. From October nineteenth, 0:10:21.720 --> 0:10:26.600 twenty seventeen, to January eighteenth, twenty eighteen, the team at 0:10:26.679 --> 0:10:29.600 Amazon began to whittle the list down to a group 0:10:29.679 --> 0:10:32.600 of just twenty finalists, and I'm going to tell you 0:10:32.640 --> 0:10:36.839 what they were. So the finalists for Amazon's HQ two, 0:10:37.080 --> 0:10:53.240 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, 0:10:53.760 --> 0:11:00.160 Los Angeles, California, Miami, Florida, Montgomery County, and Maryland. As 0:11:00.160 --> 0:11:05.040 they say in seventeen seventy six, Nashville, Tennessee, Newark, New Jersey, 0:11:05.480 --> 0:11:08.960 New York City, New York State, a region in northern 0:11:09.240 --> 0:11:20.040 Virginia called Arlington County, Philadelphia, Pennsylvania, Pittsburgh, Pennsylvania, Raleigh, North Carolina, Toronto, Ontario, Canada, 0:11:20.480 --> 0:11:26.640 and Washington, DC. Those were the contenders who would win. Well, 0:11:26.720 --> 0:11:30.079 that would be something of a surprise. I'll talk more 0:11:30.120 --> 0:11:32.840 about that, but first, let's take a quick break to 0:11:32.880 --> 0:11:45.400 thank our sponsors. Okay, before the break, I mentioned a 0:11:45.679 --> 0:11:48.520 list of twenty regions that had kind of made the 0:11:48.559 --> 0:11:53.120 short list for Amazon. But even before that list was announced, 0:11:53.160 --> 0:11:56.240 there was this crazy period in which various cities and 0:11:56.320 --> 0:11:59.240 regions that were trying to pull out all the stops 0:11:59.280 --> 0:12:03.080 in an effort to cox Amazon into choosing them for 0:12:03.200 --> 0:12:07.520 the location for HQ two. And it got pretty absurd 0:12:07.679 --> 0:12:10.080 and more than a little gross, or at least it 0:12:10.120 --> 0:12:13.360 was gross if you find some aspects of capitalism to 0:12:13.400 --> 0:12:16.560 be icky, you know, like how some cities will spend 0:12:16.600 --> 0:12:20.160 way more money in an effort to lure businesses into 0:12:20.280 --> 0:12:23.040 them than they would spend to do stuff like, I 0:12:23.040 --> 0:12:29.360 don't know, address infrastructure problems, or fund schools or address 0:12:29.480 --> 0:12:32.560 housing crises. And yeah, we'll have more to say about 0:12:32.600 --> 0:12:36.120 that later because that becomes a big critical point when 0:12:36.120 --> 0:12:39.360 we talk about New York City. So through the first 0:12:39.520 --> 0:12:42.640 half of twenty eighteen or so, you would occasionally see 0:12:42.679 --> 0:12:47.920 news about some city or another making outlandish promises or 0:12:48.000 --> 0:12:51.800 ridiculous public displays in an effort to stand out among 0:12:51.880 --> 0:12:56.000 the other candidates. For example, the city of Tucson, Arizona, 0:12:56.080 --> 0:12:58.560 which I'm sure you'll notice was not on that list 0:12:58.600 --> 0:13:02.040 of twenty on the short list, Tucson sent a plant 0:13:02.320 --> 0:13:05.520 to Jeff Bezos. Not just any plant. It was a 0:13:05.679 --> 0:13:11.480 twenty one foot tall saguaro cactus. Amazon News responded to this, 0:13:11.800 --> 0:13:15.040 saying the company was not allowed to accept gifts, so 0:13:15.120 --> 0:13:18.760 instead it had donated the cactus to a desert museum 0:13:19.320 --> 0:13:23.840 in Birmingham, Alabama. The city put up three giant Amazon 0:13:23.880 --> 0:13:28.600 delivery boxes around town and encouraged citizens to go out 0:13:28.640 --> 0:13:31.760 and take selfies with the boxes, and then to tweet 0:13:31.840 --> 0:13:36.360 their selfies using the hashtag that read bring a to 0:13:36.520 --> 0:13:39.000 b which is cute, but in the end it didn't 0:13:39.040 --> 0:13:44.239 really move the needle. Here in Georgia, to our great embarrassment, 0:13:44.880 --> 0:13:47.920 the city of stone Crest was vying to become the 0:13:47.960 --> 0:13:50.480 new home of Amazon HQ. This was seen as a 0:13:50.520 --> 0:13:53.480 long shot, as stone Crest itself is not a very 0:13:53.559 --> 0:13:56.640 large city. It's actually kind of in the metro Atlanta area. 0:13:57.000 --> 0:14:00.120 It's outside the perimeter. The perimeter, by the way, for 0:14:00.160 --> 0:14:03.120 those not in Atlanta, that's a highway called two eighty five, 0:14:03.480 --> 0:14:06.319 and two eighty five encircles all of the city of 0:14:06.400 --> 0:14:10.360 Atlanta and some of the outlying metro areas. Stonecrest is 0:14:10.440 --> 0:14:13.319 outside of that. It's a little less than a half 0:14:13.320 --> 0:14:17.160 hour drive from downtown Atlanta. The traffic's not bad, but anyway, 0:14:17.679 --> 0:14:23.280 Stonecrest's proposal included the chance for Amazon to essentially have 0:14:23.600 --> 0:14:28.720 its own city within Stonecrest itself. Stonecrest would continue to exist, 0:14:29.160 --> 0:14:33.200 but the city of Amazon would be carved out from 0:14:33.240 --> 0:14:39.000 a space within Stonecrest's holdings, with Stonecrest apparently handling all 0:14:39.120 --> 0:14:43.440 the utilities and municipal things that would be required for 0:14:43.520 --> 0:14:46.880 Amazon to operate. But people figured that Stonecrest didn't really 0:14:46.920 --> 0:14:50.640 have a chance because Atlanta had its own proposal into Amazon, 0:14:51.000 --> 0:14:54.440 and as we would see on that short list, Atlanta 0:14:54.600 --> 0:14:58.720 would end up making it on the list, Stonecrest did not. Now, 0:14:58.800 --> 0:15:03.560 other places were taking a less gimmicky approach, but no 0:15:03.760 --> 0:15:08.040 less effective. New Jersey offered tax breaks amounting to around 0:15:08.200 --> 0:15:12.680 five billion buckaroos. That's a princely sum, if ever there 0:15:12.840 --> 0:15:17.240 was one. Now, this was figured because the deal said 0:15:17.280 --> 0:15:20.280 that the state would offer up to ten thousand dollars 0:15:20.560 --> 0:15:25.080 per job created within New Jersey per year for an 0:15:25.240 --> 0:15:29.040 entire decade. Now, Amazon was pitching the HQ two as 0:15:29.080 --> 0:15:32.560 a project that would ultimately bring in fifty thousand jobs 0:15:32.600 --> 0:15:36.600 to whichever area the facility would be located in. So 0:15:36.880 --> 0:15:39.720 if you take fifty thousand jobs, you multiply that times 0:15:39.760 --> 0:15:43.240 ten thousand dollars, then you multiply that times ten years, 0:15:43.560 --> 0:15:46.600 and you get five billion dollars over that ten year period. 0:15:46.960 --> 0:15:50.800 Other cities offered their own incentives, all eager to convince 0:15:50.880 --> 0:15:55.200 Amazon to pick their location for HQ two. Now, this 0:15:55.240 --> 0:15:58.120 would ruffle feathers in more than a few places. There 0:15:58.120 --> 0:16:01.680 were critics who were arguing that peticians seemed far more 0:16:01.760 --> 0:16:04.520 eager to cater to one of the world's richest human 0:16:04.560 --> 0:16:07.720 beings rather than actually use their powers to make the 0:16:07.760 --> 0:16:11.920 lives of their constituents better and safer. Many people were 0:16:11.960 --> 0:16:15.600 worried that should their own city actually win the bidding, 0:16:16.040 --> 0:16:18.680 it would mean a net loss for the region, that 0:16:18.840 --> 0:16:23.240 whatever benefit Amazon's arrival would bring wouldn't be enough to 0:16:23.360 --> 0:16:26.560 offset what the area had given up in order to 0:16:26.640 --> 0:16:33.200 get Amazon there. I feel this distinctly because living in Atlanta, 0:16:33.360 --> 0:16:36.120 there's still people at least of my age or older 0:16:36.520 --> 0:16:40.600 who are wincing over the Summer Olympics of nineteen ninety 0:16:40.680 --> 0:16:45.360 six because Atlanta bent over backward in order to get 0:16:45.400 --> 0:16:49.400 the Olympics to our city and spent an awful lot 0:16:49.440 --> 0:16:52.320 of money in order to make that happen. And while 0:16:52.880 --> 0:16:56.240 many of the facilities that were built were repurposed after 0:16:56.280 --> 0:16:58.680 the Olympics, so they didn't like just go to waste 0:16:58.760 --> 0:17:01.000 or anything. There were a lot of questions as to 0:17:01.080 --> 0:17:05.240 whether or not it ultimately was worth the expense that 0:17:05.359 --> 0:17:08.120 was paid to get the Olympics there. That's a matter 0:17:08.160 --> 0:17:10.240 for another time, but I mean this is a common thing, 0:17:10.600 --> 0:17:14.040 like within cities where you'll hear about cities that are 0:17:14.560 --> 0:17:19.720 trying to coax a company or other organization into the city, 0:17:20.080 --> 0:17:24.080 and that sometimes the things they're using to coax the 0:17:24.160 --> 0:17:27.080 company end up costing more than any benefit you see 0:17:27.200 --> 0:17:29.800 from the company actually going there. That was a real 0:17:29.920 --> 0:17:33.560 fear in a lot of places. Now this gets complicated 0:17:33.600 --> 0:17:38.920 because many times the actual deals that were being proposed 0:17:39.040 --> 0:17:42.520 were covered by non disclosure agreements, which means they were 0:17:42.520 --> 0:17:45.760 not public knowledge. People were not allowed to talk about 0:17:46.000 --> 0:17:49.640 what was actually in the deal. So we had cases 0:17:49.680 --> 0:17:53.280 where people just didn't know what the cities were agreeing 0:17:53.320 --> 0:17:57.720 to and you wouldn't know until Amazon made its decision. 0:17:57.720 --> 0:18:00.360 And if it shows your city, then presumably at least 0:18:00.400 --> 0:18:03.359 some of the information would become public and maybe you 0:18:03.400 --> 0:18:06.080 wouldn't agree with it. But at the time you weren't 0:18:06.080 --> 0:18:09.960 being told anything, which obviously was not helping with trust issues. 0:18:10.400 --> 0:18:16.479 And you know, some cities were really worried about how 0:18:16.920 --> 0:18:20.800 Amazon would have a big impact on their communities, like 0:18:20.840 --> 0:18:23.520 in New York. I mentioned that earlier. In New York City, 0:18:23.560 --> 0:18:27.200 there were lots of critics who were bringing up questions 0:18:27.240 --> 0:18:31.760 about this, that Amazon's impact on the city would be 0:18:31.840 --> 0:18:35.400 so severe and meanwhile, it would be off the hook 0:18:35.480 --> 0:18:38.880 for paying for that stuff, that all of that burden 0:18:38.960 --> 0:18:43.080 would go to citizens instead. So in New York that 0:18:43.240 --> 0:18:48.560 became a huge conversation about how, Yeah, according to the brokers, 0:18:48.880 --> 0:18:52.280 it's not like they were taking money away from one 0:18:52.359 --> 0:18:55.920 project and giving it to Amazon. The brokers were saying, 0:18:55.920 --> 0:18:58.240 we're not doing that. We're not taking money away from 0:18:58.280 --> 0:19:01.960 anything that's in our budget. We're doing is we're offering 0:19:02.119 --> 0:19:06.159 incentives to Amazon. But the critics were saying, sure, but 0:19:06.240 --> 0:19:09.000 if Amazon takes you up on it, and they build 0:19:09.040 --> 0:19:12.240 this facility and they use that facility, they are going 0:19:12.280 --> 0:19:15.879 to put more stress on our infrastructure, whether that's in 0:19:15.920 --> 0:19:19.640 the school systems, in the roads, in the public transportation, 0:19:20.320 --> 0:19:24.040 whether it's just in all these other things that might 0:19:24.200 --> 0:19:26.679 or might not be intangible. They're going to put a 0:19:26.720 --> 0:19:30.520 strain on that. And meanwhile, through these tax incentives, you're 0:19:30.720 --> 0:19:32.879 not going to require Amazon to pay for them, but 0:19:33.000 --> 0:19:35.639 it has to be paid. Someone has to pay for that, 0:19:36.119 --> 0:19:38.919 so that ends up falling on all the other citizens. 0:19:39.080 --> 0:19:42.720 So what you're essentially doing is giving Amazon a free 0:19:42.840 --> 0:19:45.679 pass and making New Yorkers pay for it. That was 0:19:45.720 --> 0:19:48.040 like the big conversation that was happening in New York, 0:19:48.400 --> 0:19:51.280 And honestly, I think that there's a lot of merit 0:19:51.560 --> 0:19:56.359 in those criticisms. Now, in some cases, the incentives that 0:19:56.400 --> 0:19:59.840 were being offered in these deals would turn out to 0:19:59.840 --> 0:20:03.840 be the ones that didn't have any actual legislative backing. So, 0:20:03.880 --> 0:20:06.920 in other words, the people who were responsible for putting 0:20:06.920 --> 0:20:11.440 the proposal together didn't actually have the authority to make 0:20:11.520 --> 0:20:14.840 the offers they were making. They were doing what some 0:20:15.080 --> 0:20:19.679 salespeople often do. This is based upon my own personal 0:20:19.840 --> 0:20:25.880 observations in that some salespeople will make really big promises 0:20:25.920 --> 0:20:29.199 in order to land a sale, particularly salespeople who were 0:20:29.280 --> 0:20:32.679 on commission. They will make promises to the moon and 0:20:32.800 --> 0:20:36.200 back in order to get the ink on the dotted line, 0:20:36.200 --> 0:20:39.760 and once that ink has dried, they shift to the 0:20:39.800 --> 0:20:42.439 next deal, and meanwhile someone else is left holding the 0:20:42.480 --> 0:20:46.359 bag figuring out how do I deliver upon the promises 0:20:46.400 --> 0:20:50.679 that were made by the salesperson. That stinks. It's not 0:20:50.720 --> 0:20:54.280 the salesperson's job necessarily to deliver upon those promises. They're 0:20:54.320 --> 0:20:58.159 already doing something else. It's your job that sucks. I 0:20:58.160 --> 0:21:01.000 have been that sucker more than once and it is 0:21:01.320 --> 0:21:04.480 no fun. But yeah, there were cases in which Amazon 0:21:05.240 --> 0:21:08.119 was dealing with people who did not have the authority 0:21:08.160 --> 0:21:10.640 to make the deals they were offering. So the next 0:21:10.720 --> 0:21:14.280 step if Amazon had picked those places would be that 0:21:14.359 --> 0:21:16.800 the brokers would have to turn to the legislation and 0:21:16.800 --> 0:21:20.399 say our legislative body rather and say, hey, can we 0:21:20.760 --> 0:21:23.320 agree to make this a law? Because I already kind 0:21:23.359 --> 0:21:26.119 of told Amazon it could have a puppy, so we 0:21:26.200 --> 0:21:29.879 kind of got to get it a puppy. Sorry by then. 0:21:29.920 --> 0:21:34.000 In the end, Amazon did not choose a single place. 0:21:34.320 --> 0:21:38.800 It chose two places. However, as we'll get to Amazon 0:21:38.840 --> 0:21:41.560 would subsequently hit the eject button on one of those 0:21:41.560 --> 0:21:44.400 two choices and ultimately just go back down to one. 0:21:44.920 --> 0:21:48.560 Now Further, some would argue that Amazon's choices would reveal 0:21:48.640 --> 0:21:51.520 that the company had always had its future destinations in 0:21:51.600 --> 0:21:56.640 mind and had never really seriously considered any other potential location. 0:21:57.200 --> 0:22:00.520 So this is not, you know, verified, But there are 0:22:00.640 --> 0:22:05.120 skeptics who said, oh, Amazon always planned for these two 0:22:05.160 --> 0:22:09.080 locations to be the answer. They just said they were 0:22:09.200 --> 0:22:13.760 accepting proposals because it created a bidding war. Like if 0:22:13.760 --> 0:22:16.439 you already know where you're going to move, but you 0:22:16.560 --> 0:22:19.960 also know that your move is something that a lot 0:22:20.040 --> 0:22:23.240 of people are going to look at as a desirable thing, 0:22:23.440 --> 0:22:26.240 like they want you to move into the location, why 0:22:26.280 --> 0:22:28.959 not create a bidding war so that you get the 0:22:29.000 --> 0:22:32.719 sweetest deal possible. Right, Yeah, you know you're already going 0:22:32.760 --> 0:22:35.480 to go there, but they don't know that. So what 0:22:35.520 --> 0:22:39.000 you say is, hey, we're thinking about going someplace. We 0:22:39.080 --> 0:22:41.159 haven't made up our mind yet, what are you going 0:22:41.240 --> 0:22:43.680 to do to convince us to come to your neck 0:22:43.720 --> 0:22:47.159 of the woods. That was the kind of allegation or 0:22:47.160 --> 0:22:51.160 accusation or suspicion. Suspicion is probably the best word for it. 0:22:51.600 --> 0:22:54.320 A lot of people held that Amazon had already had 0:22:54.359 --> 0:22:56.720 in mind where it was going to go, they just 0:22:56.760 --> 0:23:00.359 hadn't told anyone because it was a way to wheedle 0:23:00.400 --> 0:23:03.880 out the best possible deal. Now, I'm not saying Amazon 0:23:03.920 --> 0:23:06.960 actually did stack the deck from the start. However, there 0:23:06.960 --> 0:23:10.760 are other people who don't have a problem floating that possibility. 0:23:11.000 --> 0:23:14.159 For a long time, it actually seemed like Atlanta, Georgia 0:23:14.200 --> 0:23:16.880 was out in the leite Like all the way up 0:23:16.920 --> 0:23:21.280 to almost the end, people thought Atlanta was seriously in 0:23:21.359 --> 0:23:24.000 the running. There was a time when most folks figured 0:23:24.040 --> 0:23:26.359 that Amazon was going to go to Atlanta, to the 0:23:26.400 --> 0:23:30.399 point where bookies in Vegas were giving Atlanta the best 0:23:30.440 --> 0:23:34.399 odds of being the city to become HQ two. But 0:23:34.480 --> 0:23:38.480 that is not where Amazon chose to go. In the end, 0:23:38.760 --> 0:23:41.680 Amazon sort of chose to divide and conquer. Now, part 0:23:41.720 --> 0:23:43.560 of that might have been because it turned out to 0:23:43.560 --> 0:23:46.320 be a lot harder to find a single location that 0:23:46.320 --> 0:23:50.119 would have access to fifty thousand or so tech workers 0:23:50.320 --> 0:23:54.000 that the company was looking to fill out these offices 0:23:54.080 --> 0:23:56.720 over the course of like a decade. There just weren't 0:23:56.960 --> 0:24:00.440 very many great single locations that could handle that kind 0:24:00.480 --> 0:24:03.960 of demand, and so Amazon instead chose to split the 0:24:04.119 --> 0:24:08.040 HQ two into two locations, one in New York City 0:24:08.200 --> 0:24:12.000 specifically Long Island City in Queens, and the other in 0:24:12.240 --> 0:24:16.720 Arlington County in northern Virginia. As we will see, that's 0:24:16.800 --> 0:24:20.800 not exactly how things would turn out. But first let's 0:24:20.800 --> 0:24:34.800 take another quick break. We're back. So Amazon announced their 0:24:34.880 --> 0:24:41.880 decision in November twenty eighteen. The backlash happened almost instantly. Now, 0:24:41.880 --> 0:24:44.680 to be clear, there were plenty of critics who had 0:24:44.840 --> 0:24:47.640 lots to say about how Amazon had conducted the whole 0:24:47.640 --> 0:24:50.360 search in the first place, and then there were even 0:24:50.520 --> 0:24:53.680 more critics about how the various areas that were under 0:24:53.720 --> 0:24:57.480 consideration had tried to outdo one another in publicity stunts 0:24:57.480 --> 0:25:02.640 and incentive packages that were s with NDA's. But when 0:25:02.680 --> 0:25:05.680 Amazon said, yeah, we're actually spliting this up and neither 0:25:05.960 --> 0:25:09.520 of the choices include the cities that were thought to 0:25:09.560 --> 0:25:12.320 be in the top of the running, folks kind of 0:25:12.359 --> 0:25:15.640 flip their lids right Like people were just already assuming 0:25:15.680 --> 0:25:18.280 that Atlanta was going to be the location, for example, 0:25:18.400 --> 0:25:21.879 or maybe Miami, Florida. But when it turned out not 0:25:21.960 --> 0:25:24.560 to be the case, a lot of folks were saying, well, 0:25:24.560 --> 0:25:26.679 that makes no sense. You must have had this planned 0:25:26.680 --> 0:25:29.040 out from the beginning. Now, it did become clear that 0:25:29.320 --> 0:25:34.520