Amazon Snubs LA For HQ2, But No Sour Grapes

LOS ANGELES, CA — Los Angeles, the only West Coast city to make the final cut in Amazon’s casting call for a second headquarters, got some bad news Monday: Thanks, but we’re going in another direction.

The corporate giant confirmed plans to open multi-billion operations in two East Coast cities Tuesday. New York City and Arlington, Va. landed the part. For Los Angeles, it was always a longshot because Amazon’s original hub is already on the West Coast in Seattle.

The chosen locations in Queens and Crystal City, just outside of Washington, D.C, will each employ 25,000 people, and Amazon anticipates investing $5 billion in building the new headquarters.

“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come,” said Amazon CEO Jeff Bezos.

Amazon announced that the company expects to receive more than $2 billion in tax incentives from New York and Virginia. The lengths cities had to go to in order to lure the retail behemoth stirred controversy in the communities vying for the part.

Community leaders who helped create LA’s Amazon bid had an inkling the City of Angels was out of the running over the course of the year, as word leaked of Amazon meetings and projects on the East Coast. When the news became official, many around Southern California were relieved.

Christopher Thornberg, of Los Angeles’ Beacon Economics and director of UC Riverside’s Center for Economic Forecasting, told the Los Angeles Times his immediate reaction was “Thank God.”
The mass of low- and high-paying jobs that would come with an Amazon headquarters would only exacerbate Southern California’s housing crisis, he said.

“We have record low unemployment, skyrocketing housing costs, horrendous traffic and somehow we wanted to drop 50,000 overpaid techies into the middle of this?” he told the newspaper. “What the hell. I don’t get the logic.”

Economic growth is about investing in the city’s existing businesses and infrastructure, he added.
“Not by spending millions of dollars in subsidies and countless man-hours chasing a monster like Amazon,” Thornberg told the Times. “Why do it? So politicians can have bragging rights.”

Still, the disappointment was real for some Angelenos. City leaders had hoped Amazon could turn sleepy corners of the city into thriving job centers.

Few details of LA's bid were publicly released, but experts said it likely included a bevy of tax incentives. The city developed its bid in collaboration with Los Angeles County and with the help of the Los Angeles Economic Development Corporation.

The LAEDC submitted nine possible sites in Los Angeles County, but it did not publicly identify them. Last year, City Councilman Bob Blumenfield said he wants Warner Center in his west San Fernando Valley district to be part of the bid.

"Although the LAEDC will present Amazon with multiple locations in the county for Amazon's consideration, the city of Los Angeles will have a compelling case for its prospective sites, including the Warner Center in the West San Fernando Valley," he said at the time. "The Warner Center is uniquely positioned to meet Amazon's needs with a recently updated specific plan that encourages investment and makes approvals more streamlined to facilitate construction at the scale Amazon seeks."

In addition to the San Fernando Valley, Long Beach, Santa Clarita and Pomona were believed to be part of the bid.

City leaders said they believe Amazon will continue to invest in the region beyond the tens of thousands of Amazon jobs already here.

Los Angeles County Supervisor Mark Ridley-Thomas, who commissioned the LAEDC bid, told the Los Angeles Times, LA doesn’t have time for sour grapes. “There are enough jobs in innovative growth industries to go around. Los Angeles is doing quite nicely — thank you very much — and we’re poised to do better."

JUNE 16: People walk past the Amazon Go grocery store at the Amazon corporate headquarters on June 16, 2017 in Seattle, Washington. Amazon announced that it will buy Whole Foods Market, Inc. for over $13 billion. (Photo by David Ryder/Getty Images)