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In: Operations Management

where should amazon have built headquaters #2 ? they chose NYC and Alexandria Va, in your...

where should amazon have built headquaters #2 ? they chose NYC and Alexandria Va, in your opinion is these good choices ? what are positive and negatives of each location ? (1-2 pages)

where shoulf amazin have built there headquaters ? besides the location i named. is the locations i named good locations to havee built there headquarers ? explain why

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Expert Solution

where should amazon have built headquaters?

Amazon HQ2 is a planned corporate headquarters in Crystal City, Arlington, Virginia for technology company Amazon. HQ2 was announced in September 2017, and is an expansion of the existing headquarters in Seattle, Washington. But Amazon announced that HQ2 would be split into two locations, with 25,000 workers at each: National Landing, a future neighborhood including Crystal City in Arlington, Virginia, and Long Island City in Queens, New York City.

They chose NYC and Alexandria Va, in your opinion is these good choices? - YES

Amazon is looking for a location with strong local and regional talent—particularly in software development and related fields—to continue hiring and innovating on behalf of our customers.

These two locations will allow Amazon to attract world-class talent that will help to continue inventing for customers for years to come. Amazon team did a great job selecting these sites, and they look forward to becoming an even bigger part of these communities.

What are positive and negatives of each location?

  • As part of Amazon’s new headquarters, New York and Long Island City will benefit from more than 25,000 full-time high-paying jobs; approximately $2.5 billion in Amazon investment; 4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet; and an estimated incremental tax revenue of more than $10 billion over the next 20 years as a result of Amazon’s investment and job creation.
  • Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City.
  • This includes a refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years.
  • Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year and as it reaches building occupancy targets.
  • Amazon as a part of providing funding through a Payment In Lieu Of Tax (PILOT) program has agreed to donate space on its campus for a tech startup incubator and for use by artists and industrial businesses, and Amazon will donate a site for a new primary or intermediary public school. The company will also invest in infrastructure improvements and new green spaces.
  • Virginia is the Top State for Business in 2019, and it offers the best workforce in the nation, according to the CNBC survey, with the nation’s largest concentration of science, technology, engineering and math employees.
  • The state also ranks No. 1 for education, tied with Massachusetts.
  • Long Island City has experienced a dramatic rise in home prices over the years that could be exacerbated by Amazon.
  • People of Alexandria Va need commitment from Amazon and state and local officials to provide safeguards against gentrification, homelessness, inequality, traffic congestion and overcrowded schools. Since Amazon has a history of anti-competitive and monopolistic behavior, making it all the more troubling that state officials are willing to subsidize this type of work environment.

Where should Amazon have built their headquarters & Why?

  • The state of Texas is also a strong contender for HQ2, which means Dallas and Austin are high up on the list of preferred cities. With Texas consistently touted as the nation’s best state to do business, there’s a strong possibility that Austin and Dallas are being weighed with equal consideration as D.C.
  • The reasons would certainly be different. In the case of Texas, the cost of living; business-friendly tax and regulatory environment; availability of skilled tech talent; major educational and research and development institutions; air and highway infrastructure; logistics and distribution assets; and economic growth are all arguably stronger than in our nation’s capital.
  • There are some key differences between Austin and Dallas. Austin is an easier destination to recruit skilled employees. With HQ2 expected to ramp up to 50,000 people, no city can single-handedly absorb that much talent. The winning city will have to be an attractive place to live with a great quality of life, and Austin has quality of life in spades.
  • Dallas is the more affordable option within Texas and has a reputation as the most business-friendly city in the state. It also serves as the corporate headquarters for industry giants like Exxon Mobil, AT&T and American Airlines. With 7.4 million residents in the Dallas-Fort Worth metro, fourth biggest in the U.S., it has the capacity to accommodate large-scale employers.

Conclusion:

Amazon wants to create their own city rather than locate its new HQ2 in the middle of a major metropolitan area. But it will still need to be in close proximity to a major metro for obvious reasons—airport, workforce, plus internet, transportation and economic infrastructure. That’s why they didn’t choose the state of Texas.

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