The suspense is over as Amazon made it official yesterday that its headquarters expansion will be to Arlington, Virginia and to New York City. Twenty cities made Amazon’s finalist list, but surprise, surprise the company chose the two cities where CEO Jeff Bezos already own homes.
Some had hoped Amazon would pick a Rust Belt city to help revitalize the region, but the company’s approach was to select two of the wealthiest cities in America. The contest did succeed in getting cities to compete one upping each other on tax breaks and perks. New York Governor Andrew Cuomo went so far as to say he’d rename himself Amazon to secure the deal. I don’t think Bezos will take him up on that, but the message–albeit tongue in cheek–was received loud and clear.
As Amazon’s suitors bid up each on tax incentives, it turns out the prize has been halved. Amazon had promised 50,000 jobs averaging at least $100,000 to the winner. Now it seems more like the two winners will split that prize. New York is handing over $2.4 billion in incentives including the on-the-nose-named REAP (relocation and employment assistance program) tax credits. Meanwhile the Commonwealth of Virginia is offering up just shy of $600 million while Virginia Tech is throwing in a billion-dollar “innovation” campus for good measure.
For New York, that works out to paying $96,000 per job for Amazon’s promised 25,000 jobs. Even with economists estimating a multiplier effect of about 2.5 for each Amazon corporate job, that’s still a lot of corporate handouts to cover in economic growth and still come out ahead–especially considering the 25,000 Amazonians and their families certainly will increase the strain on infrastructure and public services, which those waived taxes were designed to cover.
The high public cost per job led anti-monopoly scholar Matt Stoller to opine that Cuomo’s grift was every bit as bad as Wisconsin Governor Scott Walker’s ridiculous $3 billion giveaway to Tiawanese manufacturer Foxconn. Unlike Walker, Governor Cuomo’s had the foresight to wait until after coasting to victory for his third term (with 59% of the vote) before disclosing the full extent of the corporate giveaway he had engineered. Or maybe Empire State voters are cool with corporate handouts, anyway.
A National Landing Rebranding
Amazon’s New York campus will be centered in Long Island City, Queens, while its Arlington base will be Crystal City. Just like in the case of Seattle where the Cascade neighborhood was rebranded South Lake Union, it appears the Northern Virginia real estate industry is in the process of rebranding the Crystal City environs as National Landing. By many accounts, Crystal City is a soulless office park surrounded by parking, but some have pointed out at least there’s not an already great neighborhood there to be ruined.
Who Can Afford to Live There?
Amazon had trumpeted affordability as a criterion, but New York City and DC metro area housing prices are some of the highest in the nation. The median Long Island City home is going for $846,000, even higher than Seattle’s $739,600 median, according to Zillow. Meanwhile the median Arlington home costs $664,400, not far behind Seattle.
