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Comment by pm90 | Hacker News Reader

I (and many of my programmer friends) believe this to be correct; and moreover that city is Austin, Texas. There was basically no need for Austin to be a finalist; I don't think the city was particularly interested in getting them (we're already booming and most folks are already grumbling about increasing property taxes and congestion etc.). They already have a pretty big presence in Austin and are expanding rapidly. I'm 99% sure this was a cheap stunt to get some kind of incentive/subsidy from the City. I'm actually very glad there is little popular support for their proposal.

See http://www.statesman.com/news/breaking-news/austin-shortlist....

Quote: > Austin officials said in October that no local financial incentives were included in the city's proposal for the Amazon project.

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Agreed; Austin already has the Whole Foods HQ and a huge Apple and Facebook presence. Amazon also has a huge presence just outside Austin in San Marcos.

As an Austinite, I was really proud to see the city offered no financial incentives. Seems they've learned from the Domain issues (locals will understand this reference.)

I would be happy to have Austin selected as the city for HQ2. On local FB groups I have said I didn't think it would happen due to other cities offering better incentives, and I think that's why Amazon ran this contest. Instead of just saying "Austin", they said "Well, Austin...unless somewhere else gives us an unbeatable deal." :-/

Also UT providing a pipeline of top CS talent and a healthy tech scene locally compared to a lot of the other final cities.

In the early days of Whole Foods they built stores with cash and bought land to build shopping centers instead of renting. I believe HQ2 may be the real reason Amazon acquired Whole Foods, because it owned a lot of real estate in Austin.

Amazon favors urban locations for their offices, however. How is a bunch of spread out grocery store land going to help them build enough office space near each other to fit 50,000 employees? What are they going to do with all of the whole foods locations on that property?

Sorry, but the idea that the WF acquisition was to actually end up with a bunch of spread out land that isn't usable for their purposes at a premium far above what they would pay for the land itself is just silly. If it goes to Austin and WF has spare land it might get used, but they would never have made the purchase just for that.

I think my comment went over your head.

Whole Foods started in Austin and has been buying real estate for decades. They famously purchased land based on the percentage of college graduates in an area. They purchased land in urban areas. I don’t why you would assume otherwise. They purchased land and held onto unused real estate to keep their competition from building new stores.

They own a lot of land in prime locations. Often they’re the landlord of all the other business near them. Ever wonder why you see natural pet food stores and eco-friendly dentists next to a Whole Foods? It’s because they own the block.

Let me know if I need to explain this further.

> I think my comment went over your head.

> Let me know if I need to explain this further.

No need to be condescending. However, I think he did have a good point. I can't see Amazon buying Whole Foods to acquire their Real Estate holdings. I also don't see those holdings being valuable in terms of a HQ2 location. I would imagine the HQ building would be similar to the one in Seattle, in the fact that it is downtown and not near an area with college graduates. Also, that building would most likely be a large office building which would be out of place in a area like that.

You seem to think I'm talking about residential areas. I'm talking about downtown Austin real estate.

Here's photo of land Whole Foods owns or leases (mostly owns) in downtown Austin that I pieced together from information in news articles. They likely have much more.

https://i.imgur.com/AxOp9Xl.png

Doesn't this is a sense show the system is partially working? Austin, who barely cares to get the HQ and has other attractive properties for tech companies, is offering no incentives, while underdog cities who really want the HQ but have less compelling properties are showing their willingness to try harder. Classic story.

I get the race-to-the-bottom argument, but then what mechanisms can an underdog city use to ever compete?

Efficiency, city's don't need to get bigger. Build a city for it's current residents and more people and companies will want to move there.

Remember, if someone wants to move to a larger city they can. However, being smaller is actually appealing because you get less traffic etc. Further, city's are only important due to it's residents, if everyone moved somewhere else it's not like the land is going to get upset.

> city's are only important due to it's residents

That's the problem, how do you spark the network effect? People don't setup in SF for ironic atari t-shirts, they're there for the talent pool and infrastructure (i.e. the stuff amazon will bring)

People have been talking lately about how Pittsburgh has turned things around.

The Raleigh-Durham area is always talked about as kind of an unappreciated, affordable place for tech people to work. Both downtowns have improved over the past decade or two (like in many small cities), the three big universities have plenty of students, RTP is around, the only thing really against it is the suburban sprawl. I hear they are getting light rail but I've heard people talking about rail in NC since I was a child (30 some years ago).

>the only thing really against it is the suburban sprawl

as much as HN (me included) likes to complain about sprawl, don't forget that there's plenty of people who love the suburbs. Sprawl is not a downside for everybody - the people who like it just call it "affordable single-family homes" and "quiet neighbourhoods" instead of sprawl

Good point and, as a city resident, I wouldn't mind a bit of peace and quiet myself (but would go more extreme and get as rural as possible).

I think on this I was thinking more the requirements of the HQ2 which specifically mentioned mass transit routes.

Also, more generally, the parent was talking about the 'network effect' of SF and the culture there. When you're isolated in your affordable single-family home and commute to your office park that vastly differs from the serendipity and collision of people, thoughts, opportunities that you have living in a denser place where you come across more people daily, one would think. I assume that's why cities are more liberal - that we have to put up with, tolerate, and can empathize with a wider variety of people than the isolation of house->car->work->car->house.

Just speculating there.

> That's the problem, how do you spark the network effect? People don't setup in SF for ironic atari t-shirts, they're there for the talent pool and infrastructure (i.e. the stuff amazon will bring)

In short, you bring them in for other reasons. The most common being Universities, but it can also be Government or Private Sector research labs. One oft overlooked factor in Silicon Valley's success has been the great Universities nearby attracting some of the brightest people from all over the world.

Pittsburgh (CMU), Raleigh-Durham (UNC) and Austin (UT, TAMU) are succeeding in tech for similar reasons.

Underdog cities could and should compete by improving their offering for everyone, rather than making one-off deals with individual companies.

This is challenging too, most cities would much prefer Amazon to a new coal processing facility, for example.

Sure, that sounds nice in theory, but probably isn't practical.

Short of serious corruption, most cities are about as nice as their current tax base allows. Giving a company a tax break to incentivize that company to move into their city allows them to grow their tax base and improve their city for everybody. But it's not like cities are just sitting on potential attractors for employers to move in.

It's not about nice, it's about structure. What sorts of development are they encouraging? Is the main street an endless series of the same chain restaurants, or does it have a livable core? Are they encouraging rental properties to make the it easier to live there? Are they promoting high-priced condos instead to get quick hits of cash?

Policy is a highly subjective thing, but it also takes decades for it to make an impact.

This is capitalism isn't it. What should the government encourage? To let the consumers and the producers decide for themselves.

There's a difference between a well tended garden and one left to do whatever it wants.

Consumers and producers don't always get to decide. If you live in a small town that has a Wal-Mart then it's extremely difficult to compete directly with that store if you're just some independent. People might like your business, but you can't buy at the same volumes, you can't force the hand of city council for tax breaks, you have almost no power in comparison.

Absent good governance then corporations decide everything and we get to "decide" between the options they deign to give us.

> Underdog cities could and should compete by improving their offering for everyone

That's not necessarily true. A city may not want everyone, or they may particularly want Amazon. Competition is competing, one part of which is incentives to localize in an area. Since so many places want an HQ2, it is Amazon's market not that of the cities.

Cities can rail against having to compete in a competition, but those cities likely will not win the competition.

In Atlanta, where I am, everybody pretty much thinks the same... except replace Austin with Atlanta. I suspect people in both cities are biased.

It's hard to argue with the fact that Austin made the shortlist without any incentives. The same doesn't apply to Atlanta.

The short list isn't very short... Somerville made it and I'd be stunned if we were chosen.

It's pretty short compared to the 238 cities that applied (https://www.seattletimes.com/business/amazon/amazon-refuses-...).

I think Boston and Somerville are just two different manifestations of one regional proposal, though they weren't really presented that way far as I know.

The sites in Somerville are actually a much better choice than the Suffolk Downs site offered by Boston. They're a lot closer to the Boston itself and are better situated for housing and transportation. It would also knit together those grim parts of Somerville that are cut off from the rest of the town by Routes 93 and 28.

agree, 20 cities is a lot. i could be wrong, but who really expects LA to make it?

I am a bit confused about Austin as a candidate partly because I thought that Amazon wanted an east coast presence, not mid-country. So it boils really down to Boston, DC, and Atlanta as options.

As another engineer in Atlanta, I’ve got mixed feelings on whether the criteria Amazon put forth is really met. There’s probably more people from Atlanta that leave for tech than stay by a long shot given I’ve probably met more Georgia Tech graduates over my career outside Atlanta than actually in the metro area. Anecdotal evidence aside, there’s been several articles published about Atlanta’s brain drain problem specific to tech (medicine does not seem to apply given CDC and Emory attract world-class doctors just fine). I’m not sure if anyone on HN outside the region can name a single tech company HQed in Atlanta off the top of their head - I certainly couldn’t before I moved here.

Honestly, I associate Atlanta with film/music production more these days and never really tech. Much like Charlotte = banking.

> I thought that Amazon wanted an east coast presence, not mid-country

Amazon never said this, so unsure why you think this.

https://atlanta.curbed.com/2018/1/29/16946010/amazon-hq2-hea...

The five primary criteria driving Amazon’s decision, per GBH, include:

1. “East Coast presence.”

2. “Thriving engineering/surrounding university infrastructure and student pipeline.”

3. “Transportation hub with major growth potential.” ...

Hmm. Those criteria you posted aren't coming from Amazon, they're just the invented criteria of a single analyst at GHB Insights [1], a market research firm based in NYC.

I don't think Amazon has made it public as to which criteria it's using to make this decision.

[1] https://www.cnbc.com/2018/01/22/gbh-insights-atlanta-and-oth...

I'm a little concerned that Atlanta pols are already leveraging Amazon as a form of coercion to influence social policies...at least wait until after we're chosen?

https://www.wsj.com/articles/to-get-anything-done-georgia-po...

Amazon is not the only large company that objects to apparently discriminatory legislation. Just look at Indiana or North Carolina for examples.

It's the market that is influencing social policies, politicians are just responding to that.

Personally, I think it's one of the three locations in Washington—Arlington—Alexandria. Of all the finalists, it's the only metro area that's broken into three. Every other finalist represents an entire metro area, but Amazon lists DC, NoVa, and Montgomery County as separate finalists. The implication of this is that even if Amazon was going to pick from the finalists at random, that metro area has three times the chances of any other.

On a deeper level, I think it means that they've already decided on putting HQ2 in the Washington—Arlington—Alexandria MSA, but they haven't yet decided what part of the MSA they're going to put it in, and they're going to have the three real finalists duke it out amongst themselves.

It makes sense: Amazon has some pretty deep ties to the area. Their original AWS datacenters are in NoVa. Jeff Bezos owns the Washington Post. Bezos also just bought a house in DC. The area is just as much home to Amazon as Seattle is.

Edit: Also, as a Texan myself, there's no way anything in Texas is going to get HQ2 with our LGBT-hostile state legislature. It's the same reason people are saying that Indianapolis might as well be disqualified due to the Indiana state legislature refusing to pass a hate crimes bill. Given what our legislature tried to pull this year, Amazon isn't going to touch us. And you can bet they'll try again in 2019, and Joe Straus won't be there to stop them.

> Edit: Also, as a Texan myself, there's no way anything in Texas is going to get HQ2 with our LGBT-hostile state legislature. It's the same reason people are saying that Indianapolis might as well be disqualified due to the Indiana state legislature refusing to pass a hate crimes bill. Given what our legislature tried to pull this year, Amazon isn't going to touch us. And you can bet they'll try again in 2019, and Joe Straus won't be there to stop them.

They are up for election this year and even though it seems likely that the Governor won't change, other seats seem much more competitive.

Bezos also just bought a house in DC.

That's where it will be. The Wall Street Journal once noted that about 70% of corporate HQ moves move it closer to the CEO's place of residence.

Bezos didn't move to DC, just bought a house there. He's got plenty of houses.

I agree that the DC area is the most likely possibility for HQ2, but bezos buying a house there is a relatively unimportant indicator.

OK. Other than that, DC is a poor place to move a big administrative operation. No space for a big campus unless you go way out beyond the Beltway.

Montgomery County, MD would be perfect, then. And if they're going for NoVa, there's a lot of space in Loudoun County.

That's a very interesting stat. Bezos has 5 houses that reporters know about [1].

They are in Medina (WA), Beverly Hills (CA), Van Horn (TX), Manhattan (NY), and D.C.

Of these 5 known places, his Beverly Hills, Manhattan, and D.C. houses are close enough to the HQ2 finalists.

If we assume the rumors of Amazon wanting an East Cost presence, then we can narrow it down to NY and D.C.

1. http://www.businessinsider.com/jeff-bezos-owns-five-massive-...

I think this is a good call. Not to mention public transit and good air connections.

As to your edit, I wonder if this is a Bezos way of not-so-subtly trying to push those type of legislatures to change their tune on that and other issues. Maybe beyond wanting to get a sweet tax break deal, there's a bit of soft power and influence Bezos is trying to bring to bear to tell state legislatures that being adverse to things like people's sexuality, women's health, etc. isn't good for business. Might be reading too much into all that but it's interesting to think about.

I read a very convincing article on how it will most likely be near D.C.

https://slate.com/business/2018/01/amazon-is-totally-putting...

Yep, that analysis is pretty spot-on.

Honestly, I thought it was going to be Washington—Arlington—Alexandria before they even announced the finalists, and the choice of finalists just confirmed it.

I'll be more specific and say the DC area, either eastern Montgomery county, along the red or green line; or near the yellow line in DC or NoVa.

100%. The fact that whole foods HQ is here is icing on the cake.

There's land near the domain that's effectively reserved for it.

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