DOES DC *REALLY* WANT TO WIN AMAZON’S HQ2?

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We can talk about jobs and tax bases and housing prices until we’re blue in the face, but the fact is, the history of Amazon headquarters – admittedly a sample size of only one – paints a pretty dreary picture.  It’s nearly impossible to find anyone in Seattle who thinks the city is better off since Amazon set up shop there.  People who grew up in Seattle or used to live there in the pre-Amazon era talk about the city like a terminally ill friend:  is it as terrible as I’ve heard?  Are there any good days anymore?  Should I visit and see the sad reality, or just preserve my memories of the good times?  There’s been a mass exodus of Seattle artists and musicians – you know, the people who put Seattle on the map in the first place – to Portland, California, and New York.  When I met a Seattle native recently, I mentioned a bar I used to go to when I visited my sister, who lived there for a decade.  He grimaced and said, “it’s ruined now.  The whole city’s ruined.”

Of course, every city that has a thriving second (or third) act will have its detractors.  New York is full of people who romanticize the days when walkers in Manhattan had to keep $20 of “mugger money” in their front pocket, to streamline the inevitable and frequent armed robberies, and even in DC there are a lot more people than you probably realize who talk wistfully about the days when there were only two bars on the entire stretch of 14th Street.  (You get a gold star if you can name them.)  But it’s different in Seattle.  Amazon doesn’t just bring tax money and job openings;  like every internet giant, it brings a culture with it.  That culture happens to be overwhelmingly male (and white) – when Amazon released diversity numbers in 2014, it was revealed that 75% of their managers are men.  They brought so many techbros to Seattle that it permanently skewed the male-female ratio to 130 men for every 100 women.   If you’re a woman, you may read that and think, “that’s great for my dating prospects!”  But is it?  The culture isn’t just male, it’s also, uh, techy.  (A polite word for “geeky.”)  Half the techbros are going to be wearing multiple layered polo shirts and talking about “disrupting” everything (“It’s 2AM, time to disrupt some ‘Ben’s Chili Bowl’!”), and the rest will arrive at your date on a Segway and commence unironically quoting “The Big Bang Theory.”  Amazon’s HQ2 is going to bring 50,000 techbros (and, yes, some techladies) to whichever city wins its bid.  If that ends up being DC, you are going to yearn for the days when the most annoying person in the bar was a harmless bow-tied Capitol Hill intern talking about gerrymandering.

Of course, weighted against all these cultural drawbacks – which, for some reason, we never hear about in all the stories about HQ2 – are the financial advantages.  Amazon is bringing 50,000 jobs;  Amazon is going to pay hundreds of millions in taxes; Amazon is going to rent out all those empty office buildings.  (Its office footprint in Seattle is the largest single tenant footprint in any city.)  But none of this is guaranteed.  We heard similar promises about the Living Social (remember them?) HQ, for which the District similarly rolled out a heavily-incentivized welcome mat, and they went bust within three years.  While it’s highly unlikely that Amazon will go bankrupt – though it should be noted that their entire narrative so far has been highly unlikely – stranger things have happened.  And regarding the taxes – this bidding war between cities is essentially a competition to see who will give up the most tax breaks.  (New Jersey is reportedly offering a staggering $7 billion in tax breaks.)  What’s the point of winning the bid if the price was to give up all the benefits?  Seattle has benefited largely because it incubated Amazon;  the city that hosts HQ2 is working from a position of extreme weakness.  The HQ2 deal will probably look a lot like the deal Apple recently struck for its $1 billion data center in Iowa;  once you factor in all the tax breaks and incentives, and that the promised jobs are mostly going to be filled by people the company brings from elsewhere, the main benefit of the deal for locals are going to be bragging rights.

Of course, there will be some real benefits.  The District will collect some taxes from Amazon, and those Amazon employees will spend their money in the District.  Housing prices will go up;  if you own a house, it will be like hitting the jackpot.   But these benefits will accrue to a relatively small slice of the District, and the rest of us could very well end up like the majority of Seattleites;  annoyed, nostalgic, and priced out. We shall see.

 

 

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