Sure AWS needs a sales office in the region. And a datacenter. And a lobbying shop too. Pretty sure they got all that covered already.
I lived in Northern Virginia for 8 years.
It's got a mediocre quality of life compared to other tech centers, extremely high cost of living, horrific traffic, and has a talent pool that is inflated on paper due to the misaligned incentives of the Federal government workforce (Federal government workers are promoted and hired based on arbitrary checkmarks like Masters degree: yes/no, etc) which cause people to pursue worthless graduate degrees for pay bumps. This is why there are so many diploma mill type schools with campuses there. Add in the incredible over-staffing of Federal projects (both gov't and contractor) and you get incredibly mediocre talent where a "full stack web developer" produces very little over 3 years and has an atrophied skill set. Forced me to hire based on side projects and active Github projects to weed out the huge amount of mediocrity.
Bezos has political aspirations, and honestly, this makes sense from the perspective of already having massive data center presence there. He will now have large numbers of employees added to both Maryland and Virginia, giving him much more influence with Congress since congressman in general kiss the ass of large employers in their districts.
Hopefully, he could have some positive influences on the Federal gov't, by having a contracting wing from Amazon that would help fix the awful, bloated, IBM-like state of the Federal agencies. They used to do great things, but like IBM, they have calcified into jobs programs with dead-sea effect staffing.
He can literally get great onsite political influence with DC based HQ2.
Imagine having a large group of employees under you whose close friend or family member works in sensitive or influential federal jobs.
I also love the spot in assessments about the inflated pay, degree mills, etc.
Are you more likely to award contracts to AWS if you work at the DoD knowing that in two years you can move over and suddenly quintuple your salary?
The Federal government pays incredibly well, but has few technology workers. They instead primarily act as managers for embedded contractors, who themselves are paid far above average for a given role.
Additionally, AWS already has a DoD presence.
Source: Lived in DC area for 8 years, worked on numerous federal contracts, witnessed highly overpaid, lazy shitbags who were so incompetent that government shutdowns forcing them to stay home sped up work on contracts.
Amazes me how the "government workers are underpaid" meme is so strong in people who haven't spent time in DC area.
I grew up in an impoverished rural part of Virginia 6 hours from DC. Going home and seeing my hard working relatives scrape by and do without after paying taxes, then going back to DC and seeing people who arrived at work at 9, left at 3:30, and yapped half the day made me transform from Leslie Knope to Ron Swanson.
I always tell people this:
The US political parties have it wrong. One thinks gov't is always bad and shouldn't exist. The other thinks it is fine, but just needs more money.
The reality is that it is a broken organization that used to be amazing, but has rotted, and the last thing it needs is more money. It needs to be radically reformed and reinvented. End rant.
Edit: The strategy you outline re: government employees is already employed by all of the large government consulting firms. Amazon is late to the game and behind the ball with their lack of awarded contracts. They might be able to catch up, but contracting is one field that has repeatedly shown itself to be resistant to disruption.
If anyone in the consulting field is paying attention - right about now is almost too late to begin going out and lining up a bunch of clearance techies who can be on your secure GovCloud consulting team to provide all the services that the DoD will be needing.
Plus when trying to make a sale or negotiate a deal I'm sure it makes people on the other side feel better if someone says "And the people to support you or jump when you say how high are going to be 5 minutes away rather than 2 timezones away." It's almost at the point where subcontracting out is similar to just having all the work done in the same building you're already in. Seems like that would make people feel more comfortable.
Don't underestimate the power of the face-to-face meeting.
There's a reason that videoconferencing didn't kill the business class airfare.
Don't underestimate how much of a difference-maker face-to-face is.
I've called and emailed people and the one thing that actually got things moving was just going to their dang office and seeing them in person. I don't think it matters how good the technology gets and how many VR-facetime conference call services develop, there's always going to be something irreplaceable about meeting in person. If there's not much of a significant difference on paper between you and the competition, it really does put you ahead of the competition if those meetings go well and the competition isn't doing it. Same for hosting dinners, etc.
Do not underestimate the power of locality. It is a big factor in marketing. Having face time with clients is the chief reason you win jobs.
for that reason a lot of the federal contractors are baked in and grown from Northern Virginia.
If you're going to place executives in the area, then their underlings need to be there too, and so on. Putting your HQ where your executives need to be makes sense.
This is why all sales people are called "executives" and why all executives spend a large fraction of their time on sales.
That aside, it's easy enough for the government to fix the housing problem. They're just too invested in keeping prices high to want that.
A base pay of 72k would be ~82k w/ locality (Rest of US) vs ~92k (DC).
It may be just one factor, but it is much more than that let me explain.
Let us say Bezos came to the conclusion that Northern VA is right place long ago as you said and naively announced the place & commitment. What follows next is 65% of the region people cheer at the announcement and 35% protest stating it will cause housing expensive and traffic congestion etc..
After some back and forth negotiations with local govt. Amazon builds it HQ2. By the time HQ2 complete building complete campus (3 years), the unhappy dissident group get more support and "pass local city and state laws" demanding Amazon should pay for some affordable housing projects and some new infrastructure which may run into few billion dollars.
Now with this new bidding game, it is hard for the people of Northern VA to demand Amazon. Even if they do demand few years down the line few billion dollars towards some affordable housing etc. Amazon can happily pack back some of those Billions they got as tax breaks.
One can't build a Trillion dollar consumer retail business without playing on basic human psychology.
Found it - https://www.youtube.com/watch?v=wLtLz4wQtOg
I mean "quote him", not "cute hi"
Good work on 6+ months of press and making cities embarrass themselves for what seemed obvious from the start.
https://www.townandcountrymag.com/leisure/real-estate/news/a...
I recommend watching the actual talk, but there are a few sections of it summarized (including some about Amazon HQ2) in this article: https://www.recode.net/2018/9/19/17878766/scott-galloway-pre...
1. As you point out, right next to Pentagon and federal government. 2. Good transportation: right on the Metro and literally across the street from National Airport. 3. If you're going to have 2 headquarters, having them be on opposite coasts makes sense. 4. And I think another one that is pretty unique to Crystal City is that Amazon and their employees definitely want to be in a downtown, urban environment. However, most of the other cities on the list were either extremely crowded downtown, available sites were actually more out in the 'burbs, or the cities were far down in what a lot of people would consider "2nd tier" (or 3rd tier) cities. Crystal City is basically an urban suburb of DC that you could easily see having a great "vibe" for an HQ2, but still has room for Amazon to build out.
The Patent and Trademark Office had 5 huge buildings; they moved to Alexandria. The Dept of Defense is moving a lot of its employees to Fort Belvoir, and the contractors are following.
It's really kind of crazy to have such a major business district so deep in a major metropolitan area, with such low average occupancy.
Also, some nyt writer that’d never been there called it the Brooklyn of DC which was hilarious.
Meanwhile, Columbia Heights and Eastern Market will probably see their gentrification rapidly accelerate since they're a short Blue or Yellow line ride away on WMATA. H street will probably be safe since Washingtonians seems to have a pathological fear or switching lines during their commute and it's closest to a Red line station (Union Station).
Yeah, in Boston for example (where Amazon is actually doing some fairly heavy building and hiring in the Seaport anyway), the proposed HQ2 site was Suffolk Downs. That's not out in the burbs exactly but it is adjacent to old working class towns a little ways north. It's not what your typical techie would consider being in Boston.
I think Raleigh was somewhere out in industrial parks a decent way outside the city with no transit.
Etc.
We'll see if this story pans out but the DC area always had to seen as a leading contender. Yes, it's probably a bit pricey but one wonders how much latitude Amazon would have had anyway to pick a cheap location and provide much lower compensation than HQ1 to reflect that.
Even if the area doesn't check all the boxes, it checks a lot of them--including the fact that there's a ton of local tech talent and DC is, if not everyone's idea of a dream location to live and work, is at least considered tolerable by many.
Found the guy who doesn't live in or around DC...
If I were going to work in HQ2, I'd live in Del Ray, though its more single-family focused. But it has some nice local restaurants.
Tons of empty office space for sure though. I think proximity to DC itself is probably the main selling point.
It would be interesting though, if Amazon was prepared to invest in capital improvements for Metro...
Narrator: Amazon wasn't.
Riders commuting from downtown DC to Crystal City would be going against the prevailing flow into the city. Plenty of room on those trains in the morning.
Riders in MD would have a hard time, but a person would have to be pretty dumb to move to MD for a job in Crystal City.
Surely, you jest. Yeah, it's on a metro line, but hardly anyone lives near a metro line. That area is consistently rated as the #1 or #2 worst traffic in the country for years.
It’ll be on the same line as Shaw which is one of the most desirable neighborhoods for 20/30 somethings in DC right now.
Running mate Zuckerberg?
Zuckerberg might want to, but he's universally despised on both sides of American politics, so no chance there.
(Not to mention that VP picks are normally used to broaden the ticket's appeal, not double down on it...)
Crystal City, VA is still an 8 hour drive from the part of the South I'm from. Atlanta, Raleigh, and Nashville have so much potential... I think if just one of FANG put a HQ there (or even an office), the others would quickly follow.
I realize how pretentious this probably sounds. Take is as a single anecdote, based off my own personal experience.
I would love to be proven wrong, and will gladly eat my words for dinner.
I will grant you that if you have a family it's way cheaper due to availability of real houses in the burbs combined with cheaper daycare/nanny/housekeeping/etc., but a young, successful tech worker is probably better off on the west coast despite the higher cost of living.
1) non bay area tech workers severely underestimate the total comps that bay area workers are earning right now.
2) many renters in the Bay Area may actually have more in their pocket. If you are willing to rent a room (i.e not have a studio or 1BR apartment), you're probably paying 1-1.5k more per month. The salary delta for Bay Area techies is way more than 12months*1.5k/month per year. Have some basic financial responsibility and you can really save a lot out here.
As for the giant FAANG companies, I think the south is better off without them. They skew the market so much that it’s very economically disruptive, and since US cities are generally very resistant to building housing, I suspect that you’d see the big company offices would mess up the housing market anywhere they went the same way they have in SF and Seattle.
https://saportareport.com/atlanta-region-can-brag-about-havi...
Just grabbing one at random and checking their website, you can find IT jobs at Home Depot:
https://careers.homedepot.com/job-search-results/?location=A...
That doesn't invalidate your wish. I'm just saying it is possible to find tech jobs there.
Additionally,there are some prestigious universities in Atlanta, including Georgia Tech, and there are government jobs, such as at the CDC.
https://www.bizjournals.com/sanfrancisco/news/2018/10/09/bay...
http://www.flyreagan.com/dca/dca-reagan-national-slot-perime...
It's always been the case that DCA has a limited number of long haul flights.
It's nice to be able to WMATA to the airport but IAD is a short Uber away from Crystal City.
The article sounds very speculative. I don't know anything about this place, but if it's expensive like people here say it is, then I don't see the point of Amazon moving there. I think a place like downtown Chicago would make more sense. (if only the winter was not as cold and better public schools...)
DC never made sense to me. The other defense contractors manage to not have HQs in DC.
I think this story is exactly what they'd leak if they were trying to buy real estate somewhere else.
Why would Amazon need a single (longer) hop to Asia, when it can already get there from Seattle?
Going to DC/VA gives it better access to EMEA.
And the thought is that at some point there's going to be two Internets, US and China. There's a pretty good chance that China is going to run Africa's Internet access. Europe has been a also ran against the US as far as the Internet is concerned, and the Middle East is projected to lose their economic momentum in the coming decades.
https://nypost.com/2018/09/20/former-google-ceo-predicts-two...
However I don't see Amazon and Chicago being a good match, culturally, if that makes sense, nor do I think there are compelling strategic reasons for basing this location there.
*edit: Based on snowwrestler's comment it sounds like Crystal City has seem some large occupants move out, so real estate prices may be trending down. However it's still a fair premium to pay to be next to the airport, compared to farther out (where you also have a high concentration of software developers.)
The city recently approved 18 new skyscrapers for downtown, including 12 for the proposed Amazon site, with an included professional soccer stadium.[2]
[1] https://www.chicagoarchitecture.org/2018/03/26/river-distric...
[2] https://www.chicagoarchitecture.org/2018/10/18/you-get-a-sky...
They could remodernize Detroit in a massively good way.
Leave us alone, the blue line is still broken.
This is also the epitome of infotainment something that in the end won't even matter unless it actually happens other than to discuss the 'inside baseball' of the entire event.
How sure is anyone of this? Sure enough to go and snap up real estate (say residential) knowing that if it is correct that real estate will inflate in value well over whatever it is right now (already inflated).
Also I still am not seeing the advantage to Amazon (as long as everyone is speculating) of going into such a dense and expensive area to begin with. Jeff is all about efficiency and paying as little as possible. What possible advantage does he have but located in such an expensive area that is sure to get even more expensive.
total guess, I have nothing to back this up
https://ggwash.org/view/31563/ceos-want-faster-commutes-for-...
HQ2 needs to be somewhere that people want to live, with the room for lots of them.
I really was hoping HQ2 would go somewhere more conservative politically. There's plenty of people who would work for Amazon but aren't really excited by Seattle (I'm not one of them, but I know some).
Detroit specifically would have been perfect- low cost of living, lots of space to grow, great airport, lots of robotic/mechanical industry leaking from the failing car industry, plus UofM nearby. I don't know how they didn't make the finalists.
>Detroit specifically would have been perfect...
???
Detroit? Conservative?
> [T]he best way to make it is you collect as much data as you can, you immerse yourself in that data, but then [throw all that data away and decide based on personal whim]
Oregon gave Intel a 30 year property tax exemption, worth $2B, to establish their their HQ2 fabs near Hillsboro. Wouldn't be surprised if Amazon is asking for similar.
https://www.oregonlive.com/silicon-forest/index.ssf/2014/08/...
Putting intuition at the end of the decision making process is a pretty solid way to screw the entire thing up.
i.e. the process is for selecting out of the final 20, that have been fully vetted and feasibility established.
Or for deciding among three finalist engineers who’ve passed all interviews and tests and you can only hire one.
Or schools or colleges or whatever.
Also is this how skynet starts: they get some big government contract, it’s some military A.I. thing and then boom T1000s. I joke but still. I agree with the others that Bezos has this place picked all along. I was hoping he put it in Portland Oregon but the local government would have taxed him a ton or insisted on a union and Amazon wouldn’t have liked that.
If this area is to become the next Seattle, I have no interest in being here.
1. There isn't sufficient space for a large campus. 2. DCA is a small airport.
Loudoun county has a higher chance than Crystal City based on the above parameters. Of course, the parameters could have been wrong. And I would much prefer Crystal City over Loudoun, too.
The downside is one of the subway lines only runs every 13 minutes during rush hour. And that cannot be increased without decreasing runs on other lines (because they share a tunnel). Maybe Amazon will convince the governments to run more on that line (and take it away from the other lines).
edit: Forgot to mention that airport access is probably the best place in the entire country. You could basically walk to national airport.
Public transit to Crystal City is about as good as it gets. Which is good, because the road traffic sucks.
Even with all that it’s one of the better transit systems in the US. Not as good as Chicago or NY, but for the size of city it’s good.
In any event it's generally minimally acceptable at best. Dumping a ton of people onto it will not help matters.
[1] https://www.aboutlawsuits.com/dc-metro-crash-lawsuit-filed-4... [2] https://fivethirtyeight.com/features/washington-d-c-s-metro-...
I ride Metro every week day (bus + train) and look: I'm still alive! And on time almost every day. I much prefer it to driving.
Growth has killed plenty of communities, or made them not worth living in anymore. Just ask San Francisco.
Let's go ask Seattlites what they think about Amazon.
But NYC is way too crowded. They'll need growing room.
The closer they are to a big city, the better, because they can attract more talent from the people already living close by.
I wish they had considered more cities like Cincinnati, Nashville, or Cleveland. Those are actually fine places and they have low COL (although Nashville’s is getting up there). Plenty of other cities in the US also fit that profile. Even though I’ve heard bad things about working for Amazon and wouldn’t work for them in Seattle or DC, I would seriously consider taking an Amazon SDE salary somewhere that salary could go very far
Which raises costs for everyone and the "location adjustment" is usually less than what is really needed.
I was expecting it to be a bit further out, like Chantilly/Ashburn/Manassas. Close enough to serve the function but far enough out costs for employees/real estate is lower.
There are technologies that exist that allow more than a handful of people to live on a given unit of land.
Some people think that Chinese investment in real estate is also to blame but I’ve never seen any data that actually suggests that. Still, Seattle won’t pass rules to prevent speculation on property because at the end of the day, voters just want their property values to keep going up more than they want to live in a livable city for everyone
Northern VA is the poster child of what happens when you have tons of growth over decades, but absolutely no planning, or worse, lots of nimby preventing infrastructure.
Every other city in America that grew post wwII would have just built strip malls and single-family homes.
There are new high rises going up in Crystal city even as rents stagnated. Can't be too much nimby stuff going on.
Compared to say, silicon valley, they did a good job.
Loudon County did a bad job. Fairfax did a mixed job. They definitely grew in some places--like Tysons, but other parts have just grown without planning.
Could easily say that about SF, LA, Austin, etc.
I'm of the opinion that every urban planner from the last fifty years in the US should be stripped of their degrees and titles their lands taken and their crops burned.
The US transportation infrastructure even for how good it is compared to some other places is still a joke.
Okay, I'll admit it. I just REALLY want to see streams of flying killbots emanating from my home town. The Robot Uprising is coming, people, and I'm hoping early allegiance leads to a nicer brain vat in their biocomputer.
Seriously, though, I would have thought Atlanta, Chicago, and Boston, in that order, would be better. Bi-coastal or geographic center make logistical sense. ATL and BOS have excellent tech resources, but maybe a bit too much competition for talent in BOS. ATL gives a presence in "The South", so could serve as a political/cultural foothold without any major compromises. ATL proved it can easily support a tech boom during the y2k bubble. BOS serves as a great gateway to Europe. CHI is really hungering for more tech influence and would probably bend over backwards to be accommodating. Plus, the most likely site in CHI is actually a great location for anyone that likes an urban setting, not just millennials. Amazon is one of the few tech companies that I think CHI could embrace because it has a strong influence on financial markets and doesn't feel as 'magical' as many tech companies (where it's hard for everyday people to understand what they do). And Chicagoans can be fiercely loyal, even to companies. Case in point - The Sears Tower. The only time you hear "Willis Tower" is on the news. And there are a couple dozen other cases of locals refusing to rebrand stuff simply because ownership or naming rights changed.
Being by DC isn't a BAD location, but it seems like it would be better to have a strong satellite location that can be expanded as needed. I would assume the atmosphere there is more restricted for some of their more ambitious projects involving lots of sensors and physical presence. Every location will have red tape, but it seems like there DC would be ordering it in bulk.
I dunno, just rambling.
That pretty much cut out any second-tier city from the running. When Montgomery County, DC, and Northern VA were all announced as finalists, it ought to have been pretty clear that Amazon was focused on the DC area. Crystal City itself is basically the description of what you're looking for in that list I gave. Atlanta doesn't really have anything when you take out the airport (which is lousily situated anyways). I suspect Chicago, NYC, and Toronto all have too much focus on other industries (and, besides, Illinois is basically broke, so a sweetheart tax deal needs to be discounted on the basis that Illinois could need to find the cash quickly).
Chicago and its mayor worry too much about being a "world class" city. You know what world class cities don't worry about? Whether they're a world class city or not.
