You Have to Make Money to Make Money

A clerk reaches to a shelf to pick an item for a customer order at an Amazon Prime warehouse in New York, 2017. (AP Photo/Mark Lennihan, File)

So: Amazon is opening in Long Island City, New York. But it was probably a really hard decision, what with the many strong applications from cities bending over backwards give themselves a shot at economic transformation, right? Sure.

With the benefit of hindsight, it’s now clear that few of the 238 communities that applied for HQ2—including many of the 20 finalists—ever really stood a chance. On November 13, the online retailer announced that HQ2 will not be an HQ2 at all; instead, the company will open two smaller sites in Long Island City, a Queens neighborhood in New York, and Crystal City, a Virginia suburb of Washington, D.C. Those cities already house Amazon’s two biggest offices away from the West Coast. They’re nexuses of financial and governmental power. And they’re just a few miles from two of Bezos’s lavish homes. Amazon broke the rules of its own game, then picked the most obvious candidates.

At The Ringer, Victor Luckerson takes a closer look at the HQ2 competition and what it tells us about the landscape of American cities — a landscape where cities’ fortunes are ever more disparate, and tech wealth begets tech wealth.

Today, the five tech giants that lord over the U.S. economy—Amazon, Apple, Facebook, Microsoft, and Alphabet, Google’s parent company—all are based in either the Bay Area or Seattle. The next crop of mega-corps, such as Uber, Airbnb, and Netflix, are headquartered there as well. With fewer places earning the spoils of the digital economy, cities have taken to competing aggressively for whatever scraps these companies might offer: a warehouse here, a data center there. Government officials increasingly resort to offering tax breaks to lure firms that promise to bring jobs. The number of megadeals per year valued at $50 million or more in incentives has doubled since the 2008 recession, according to Good Jobs First, a Washington, D.C.-based organization that tracks government subsidies.

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