NYC has some advantages for access to capital markets - but Amazon seemingly has no shortage of capital, DC, access to policymakers - but I see no real strategic advantages here.
If I were picking, I would have picked Atlanta and Detroit, or two other lower cost large cities with convenient air travel to Seattle.
"DC, access to policymakers - but I see no real strategic advantages here."
Amazon is going to become the #1 IT vendor of choice for the biggest government of the world AND reach their tentacles deep into the political arena for all sorts of other benefits.
Military, FBI, CIA, Gov, Fannie/Freddie. All huge.
Also - every bank is becoming a 'tech company' and Amazon will provide them with their infrastructure.
Put aside government -- which is enormous -- and DC has:
- A long Internet history. MAE-East. UUNet. AOL. Equinix. Network Solutions. Microstrategy.
- Let's not discuss the one of the single largest tech regions in the country: the Dulles Technology Corridor.
- A huge Big Data industry fed by (besides government) stuff like DC's ginormous genomics and bioinformatics industries, financial regulation groups, you name it. FINRA is in DC. So is Capital One.
- Amazon Web Services is already in DC.
- The three highest income counties in the country.
So about 50% more in the Bay.
In fact, if there are only 110k tech workers, I doubt there are 92,350 actual programmers in NYC. They are counting all Product Managers, designers, beta testers, etc, as well as probably sales and administrative assistants in outfits like Google.
A summary glance indicates that the Valley and SF may be roughly on par with NYC but that the Bay Area has more than NYC, I stand corrected - though there seems to be scant hard data as it's difficult to define exactly what a developer is ...
NYC was not historically focused on engineering or tech. Media, advertising, and of course - finance, banking, and investment banking.
Pure engineering or software work? Not very much.
Of course there are many advanced software programmers for the financial industries and other major intl companies in nyc. I'm not in the bay area, I'm in a secondary 'leading software city'. Is there a citation for this?
I don't get it myself (I had a few NYC offers but chose Amazon in Boston instead), but NYC has become "the place" elite for software-focused undergrads these days. Everyone wants to get into FB/Instagram NY or Google NYC.
I don’t know, maybe it’s because I didn’t hobnob with the well connected in college or “have fun” in college either.
In an internationally large city like NYC or Tokyo, I have all the access to local places that compete on the city and regional level, but with way more choices in that regard. But on top of that I have places that are competing internationally, as well as a large selection of the best other cities have to offer since there are so many people that move there from other places.
Its hard to get a sense for how amazingly convenient and awesome that is if you visit for a weekend or a week and haven't actually lived in a place like that.
Just going with food, maybe if you're ticking off a box that Seattle has a good ramen place you like somewhere in the city and NYC has one place you found that is as good. But theres a good chance there will be multiple places as good or better scattered all over the city in NYC vs the couple good places you like in Seattle.
Is there a new food trend somewhere else in the world? Its going to land pretty soon in Tokyo and if its more than just a flash trend you'll have a number of places competing that will be as good or even better soon enough. When I'm in Tokyo so long as I do a cursory look at the reviews, I know I'm going to get something good without having to go out my way, since the rents tend to put mediocre places out of business pretty fast unless they have a special circumstance surrounding them. If I am making a special trip for a restaurant in NYC, there's a really good chance I am getting something that can be considered some of the best in the world.
The mega cities have far more going on in terms of diversity of options on any given night than smaller ones do. Additionally, there are far more ethnic groups represented in these mega regions as well.
The Pacific Northwest absolutely has it's perks, but it's not nearly as thrilling as NYC or LA.
I think you just have a bias against heavy urban areas. Lots of people are comfortable living in large dense cities. Hundreds of millions, if not more, live in cities with similar levels of urbanization as NYC.
In my experience, Chicago comes closest.
LA is quite different.
I totally appreciate people are comfortable living in cities like this. I probably wouldn't be. But, if you are, more power to you. (Personally I live in the country.)
I hope they're still there, that link is a decade old. Once I went there and bought a cable or adapter (I forget) - the guy tested it with a multimeter before selling it to me to confirm it worked. Loved that.
The goal was never to optimize for employee housing or quality of life. The goal was to get concessions from already urban areas where 25000 engineers might want to live.
>If I were picking, I would have picked Atlanta and Detroit
Atlanta and Detroit have arguably lesser draw than NYC or DC.
New York in particular is a very expensive talent pool with a lot of competition. Given Amazon's extremely strong brand, it's reasonable to think that they could benefit by opening almost anywhere else and then drawing talent in. Not only would those people get a lot more for their money, but Amazon would have relatively little competition, reducing turnover and wage inflation.
I mean I've visited both Austin and San Francisco so I understand the appeal of temperate climates but plenty of people not only tolerate but enjoy less temperate climates, myself included
Silicon Valley East is basically the 30 mile stretch from D.C. to Dulles and it's basically an unbroken chain of tech and engineering companies, mostly fed contractors, but chock full of people clawing at the walls to work for non-fed tech businesses.
D.C.'s main issues are traffic and absolutely abysmal weather. But other than that it's an absolute no-brainer of a location even if you subtract all the political co-location and lobbying factors.
NYC makes sense for different, but some similar reasons...it's also chock full of people wanting to work for tech companies that aren't fintech and LIC has long been an underdeveloped part of the city that's just a bridge hop away from basically everything you'd ever want in Manhattan. If you can stomach living 20-30 minutes east, housing prices become much more affordable even if the inventory is uninspiring.
But you’re finding it hard to understand why people might want to live here?
I’d post more but my New York life is veritable cornucopia of novel and enriching experiences and I’d better get back to it. Enjoy your stripmalls.
There is so much foot traffic in the city that mediocre and bad restaurants can survive, even with high rents.
Don't get me wrong, NYC has some amazing food, but my experience has been pretty bad with most restaurants.
Even LA has more culture :p
Not all starred chefs are about chasing the high rent look or fine dining aesthetic. You don't have to be 11MP to get a star, or even three. Ko has two and is down an alley!
It’s so snobby and inaccurate to suggest a strip mall restaurant is “bad.” With the economics of restaurants, a strip mall location is often a great idea.
You’d have a huge amount of Michelin stars in strip malls if LA even had the opportunity.
Even with that built in bias there are of course stars in strip malls.
There is a bib gourmand in a strip mall less than 3 blocks from where I sit.
Of course there are starred restuarants in strip malls.
Woah, hold on your horses. There are plenty of contestants there. Rome. Tenochtitlan. Cairo. Babylon. Etc.
So, I mean, I generally agree with your point, and if you said the American, or maybe even Western, I might agree with you completely. But, uh, there's some pretty amazing cities out there. There's not much I like better in NYC to Tokyo, for example. And hell, with how much better the Tokyo metro and JR lines are than the NYC subway system, you can live cheaper and still get into the heart of the city faster.
I love NYC, if I was looking for a job this would be a draw for me.
It certainly seemed that way to me for a long time.
Amsterdam is pretty dope for example.
3rd in tech patents after San Francisco and San Jose. 2nd or 3rd in total tech jobs after San Francisco and Seattle. This comment seems like its coming from some one who doesn't know a thing about NYC Tech scene.
> unpleasant weather,
8.6 Million people like here and lot of people prefer 4 season cycle.
and don't forget "Amazon Humidity" and "Mexico City Traffic"
I think planners at Amazon were thinking more long term. I'm thinking that convenient and multi-modal access to the Europe-Africa side of the world played a big part here. East coast and west coast HQ's just make sense for a global behemoth like Amazon.
This is so great.
Just about everyone taking the LIRR or Metro North is commuting at least an hour and if they say they aren't, they're kidding themselves.
As if it needed to be said, there are other cities that would be a lot more receptive, and would benefit a lot more. Even just over the river in New Jersey would be an improvement. Just go there.
I can't find it now, but years ago The Economist ran an article about a study that said a key factor in corporate headquarter moves was where the CEO lives. Disappointing to see it play out like that on such a grand scale, and after such a pretense of a nationwide search. Yet another thing that convinces me I'd never want to work at Amazon.
Somehow the office didn't land in Beverly Hills or the Texas ranch.
I expect the fact that he already has homes in NYC and DC is related to the fact they are in fact important locations for his business.
The office in NYC is going to be nothing more than a big satellite office compared to the huge HQ in Seattle, so it's not like he's actually moving Amazon's HQ and himself to NYC. In fact I doubt he'd spend that much time there. Given his duties, he'll probably be in Seattle most of the time.
Also, I very much doubt the office in DC is there because Bezos is just dying to spend more time in DC ;-)
If the guy really didn't like DC, I'm thinking he wouldn't have bought a $23m home there. As you say, he's rich enough he can do what he wants.
Sure, maybe he doesn't own property in Dallas, but it also seems like it's more of a place he'd like to spend time in over Austin, or Atlanta, or Pittsburgh, or a whole bunch of other cities.
The fact that Amazon was in late stage talks with Dallas also makes me think Dallas will be one of the cities to get "other major Amazon facilities as well" as this WSJ article mentions.
NYC is so obviously superior to every other location that you have to wonder whether there was any serious chance of anyone else actually getting the HQ2 at all? I mean, sure, DC can play both the government card, and the "Bezos loves us" card. But everyone else has no credible argument to put forth that would entice Amazon to abandon the opportunity that is NYC.
(In the end, even DC didn't have a good enough argument. After all, they still kept half the jobs in NYC.)
That's quite a difference. Even if Amazon gets tax breaks, its employees will not.
Dallas vs NYC is lowest vs highest income taxes in the nation.
If you had a global behemoth of a company, and you were already based on the West Coast, then your links to Asia would be just about as good as they could be without relocating out of the US.
But what if you wanted to go for a whole "sun never sets on the British Empire" thing? Then you would need better links from the Europe-Africa side of the world to your HQ. Assuming you don't want to relocate out of the US, that means the Eastern seaboard. That's just geography. Which place on the eastern seaboard has the best multi-modal transport links to the rest of the US and Europe-Africa? NYC. For logistics, by air, land, and sea, you can't beat NYC. They've just invested way too much into that stuff for anyone else to beat them at it. (Probably did so over time using those high taxes you talked about.)
Add in the fact that NYC has access to an enormous community of technology experts, and the fact that it has plentiful high powered jobs in other industries, and the choice really is a no-brainer.
Dallas, is just not there yet, to be perfectly frank. The only city in Texas that is even working towards being a rival to NYC is Houston. And while they've made admirable progress, with ports, metro trains, and airports, they've still got quite a ways to go. (For instance, they're metro is building out nicely, but it still doesn't connect to either of their airports yet. Nor does it connect to their port.)
Other cities can compete with the coastal elites, but we have to sober up as to what we need to do in order to actually be competitive. Lowering taxes might be part of it, but it's not going to make any of the knowledge behemoths leave the coastal elite cities.
Would you leave your home for another home in a neighborhood with worse schools and worse transport just because it was cheaper?
I do think Dallas has so much potential though, and I think if you would look a little you would see the overwhelming number of similarities between Dallas and Seattle, both politically, economically, socially, and even traffic/transport-wise.
I just hoped, maybe naively, Amazon would want to move somewhere where it could harness that potential and help shape the city rather than merely rely on a city’s already established resources.
Dallas will continue growing without Amazon, just as Seattle would have, but I can’t say I’m not disappointed for my hometown.
I was just pointing out that a place like Dallas does have some benefits over NYC.
Joel Spolsky also wrote about this 15 years ago:
> “My company, Fog Creek Software, is relocating. There’s nothing wrong with the brownstone we’re in, it’s just a tiringly long commute. Basically, we’re moving because of William Whyte‘s rule: virtually all corporate relocations involve a move to a location which is closer to the CEO’s home than the old location. Whyte discovered this principle after an extensive study of Fortune 500 companies that left New York City for the suburbs in the 1950s and 1960s. They always had big, complicated Relocation Committees which carefully studied all the options and chose, coincidentally I’m sure, to move to within half a mile of the CEO’s home in Danbury, Connecticut. Whyte also showed that these companies all tanked after the relocation. With, I believe, but one exception, companies that left New York City to be closer to the CEO’s house in Connecticut or Westchester had dismal stock performance compared to companies that stayed in Manhattan.”
NoVA is a little more perplexing? I think it may have been, as you said, DC is Bezos' home. And it's DC, so there's a lot of government type stuff there. I don't know? Maybe Bezos is the reason HQ2 was split into HQ2A and HQ2B? Because if you have NYC, I'm not sure why you need anyplace else?
Additionally, public sector sales is a huge part of the business, and you need people in DC/VA in order to make that happen.
I doubt building a full HQ2 in Nova is possible, but a 40,000/10,000 split between the two places makes a ton of sense.
Not participating in the bid would have been suicide for the politicians of any major city save perhaps Kreuzberg, Berlin .
The amount of wealth creation and subsequent tax payments/land value boost that any FAANG company would bring with a new HQ is way too big to be ignored.
I find that pretty implausible. Foxconn didn't save Scott Walker (and I don't think that's because his would-be supporters later realized that it wasn't such a sweet deal, either).
And it was a Chinese company. Chinese.
Wouldn't call it "massive" in NYC. The office size is projected to employ 25,000 people in total. Nice number, but not "massive" for a city of 8,623,000 people.
Not to mention the knock-on effects of the many jobs the HQ will indirectly create - cleaning, food prep, waste mgmt, facilities, security, transportation, etc.
But yes, I agree that NYC is probably the city with the highest bargaining power in the US due to its size and economic diversification. And yet they still submitted a bid, even while Mayor de Blasio was badmouthing the company 
It will be interesting to see what the incentive package was - that's when we'll know just how much Amazon profited from the whole bid/selection process.
NYC isn't known for small salaries, partly because it's not easy to live in Manhattan on a small salary.
A major industry in Manhattan is banking, and folks in investment banks pull salaries that easily rival engineers, even fresh out of school.
In fact that's a big reason that tech stayed out of NYC for a long time. It used to be that even senior engineers made half of what a junior investment banker would get.
Not all among these 25k employees will be paid over $200k. Not even among engineers. Amazon doesn't pay that well, for a FAANG.
This isn't the Bay, where if you're not an engineer, you're a starving artist. More than anywhere else in the US, engineers who think of themselves as "handsomely paid" will be up for a rude awakening in Manhattan.
For the sake of argument, let's say 5,000 of the new employees will be making $200k+. That means that their effect will be less than 15,000 employees making about $80k each, which I bet is about average for Manhattan.
Not a ton of effect.
> And yet they still submitted a bid, even while Mayor de Blasio was badmouthing the company
It would be outrageous if they didn't. Even 100 well paying jobs should be enough for the mayor to try to court them. He's a public servant, and these jobs serve the public.
Moreover, this will help establish NYC as a tech hub, something it's been striving for for quite a while, generally without great success.
Finally, I bet the incentive package isn't as aggressive as others that were submitted. Amazon wants to be in NYC quite as much as NYC wants Amazon.
It's unreasonable to assume most of the employees in the new office are going to be SDE2. Likely most of them will be new hires and SDE1.
$200k total compensation is not competitive for an experienced senior software engineer in Manhattan. I bet one of the arguments against NYC was that Amazon would likely have to improve compensation packages.
They told me it's very rare for a new hire to come in as SDE3. Even a very experienced senior engineer is unlikely to get an offer above SDE2 level.
SDE3 is thus not just a senior engineer, but one who has been with Amazon for several years.
Per our discussion, that means very few of the new office employees are going to be above SDE2 level. The stated purpose of this office is to recruit new talent, which will be at SDE2 level at most.
Finally, "close to 300k" isn't very competitive for a senior NYC SWE who has been with the same company for years. I'm sure you know this is far below most other FAANGs for a similar position.
For example, a couple of my friends interviewed with Amazon fairly recently, for senior engineering positions. In every case when the same person received an offer from Amazon + another FAANG - the other FAANG offer was substantially higher.
In one case I know the exact numbers, and the other FAANG offer was 50% (!) higher.
> The difference in compensation between amazon and fb/google/netflix is minimal except for at the very junior levels.
This not only contradicts what I know from friends, it also makes little sense. Hiring top talent straight out of college is a huge priority for companies like Amazon, which is trying to build a strong talent base. Underpaying at the entry level means they'll lose all the best candidates.
Only paying competitively at more senior levels means they're counting on these people to suddenly relocate to Seattle after 5-6+ years at another FAANG, which would never happen. Especially as Amazon doesn't pay particularly well at the senior level too.
You want to tell me an L4-5 from Google will move to Seattle to work as an SDE3 for "almost $300k"? I.E. take a 50% paycut to work for a company with worse reputation in an area that has far fewer tech jobs than the Bay? Mid career?
It's pretty well known that if you get an offer from Amazon and also from Facebook or Google, you will accept Facebook or Google. This is true for all levels, and the numbers you are quoting only confirm this preference.
My impression is that Amazon has been having trouble competing for top talent, and is working to improve its propositions, with this big new office in NYC being part of the pitch. They do have ways to go before they can actually compete with the better FAANGs out there, to the point when people will routinely choose them over Facebook or Google or Apple.
I've worked at multiple fangs/unicorns, and any differences between these companies is largely marginal. Maybe amazon is worse now than I realized, and maybe other companies are better now than I realized, but overall, what ultimately matters more is that you're at a place that will allow you to keep getting promoted rather than any one company that pays more at any given level.
This is completely detached from reality.
Amazon is fighting for top talent against other FAANGs and all other employers. If you can't also get an offer from the likes of Apple and Google, or at least other decent employers, Amazon doesn't really want you.
If you can get offers from good employers in good locations, let along from Google and Facebook, you're not moving to Mobile Alabama for no Amazon job. Certainly not if you're a young single guy.
Amazon wouldn't invest billions of dollars in this new office, compared to a few millions in Mobile, for no good reason. You may not like it, or Amazon generally, but they are known to do their homework.
This isn't just an office for software developers so that's not likely to be true.
I have to say I haven't heard from one person in Astoria or Long Island City (where I live and work, respectively) that's excited about this. And there has been a lot of buzz about it over the past couple weeks. The strain on the transit system and increasing rents that are already skyrocketing is definitely freaking out a lot of people.
Maybe it's a little selfish of me, but I'm pretty terrified of what it will do to our office's rent in particular...even though it's been expanding rapidly and getting more expensive, Long Island city has been a great place for cheapish space in old industrial buildings for new/small businesses. I figure we and a lot of the surrounding small businesses will be pushed out at the ends of our leases.
I am very curious to know where in Long Island City they are targeting. There are so many big industrial lots that they could build on or new construction that they could move into. I had heard they were looking at one of the Plaxall-owned buildings, but can't remember the source.
DC is already woefully over staffed with overpaid folks living off of guaranteed tax revenues, I don't believe in the inherent productivity there, and just cynical enough to believe it's a means for AMZN to leverage political power and government contracts.
NYC is understandable ...
... but it would have been really nice for business diversity for that to go to so many other places. Chicago, Texas, Toronto, Raleigh, New Jersey etc etc.
Until we truly solve remote, there will be some concentration. And there's value to that as an employee. If your employer goes kaput, or you're stagnating in your career, or you have an abusive boss, there are plenty of opportunities available, and enough of them that one shock to the system won't break the local economy.
Of course, the flip side of that is that real estate values go through the roof.
Why would you go to the other extreme? There are hundreds of large cities around the US that could easily headquarter these big companies and not become company towns.
How small can a city be and have a healthy relationship with an employer of 25,000?
A company like Amazon will have some natural needs. No other city can really beat NYC for meeting those needs.
Not Chicago. Not Toronto. Not Raleigh. Not Jersey.
And certainly not Texas.
By air, land, and sea the best and most bountiful transport links to the rest of the US, or to the Europe-Africa side of the world, are out of NYC. Now maybe we can change that? But we don't seem to be working towards changing it. So as of today, and for the foreseeable future, NYC is the best hub.
Too many pundits are trying to shame Amazon into moving to a city like Detroit or a city in the American heartland. But these areas are unattractive places for obvious reasons and it seems like Americans want to deny it. Want to attract an Amazon? Invest in colleges, reduce business regulations, attract an international and diverse populace which would in turn create an interesting culture, invest in local secondary schools, and (I hate to say this) drop the social conservative politics. One of the reasons why London, Paris, New York, Washington DC, San Francisco, etc. are attractive internationally is the liberal populace and progressive culture - nobody wants to move to a socially conservative place.
I feel like the partisanship that America is experiencing is only going to accelerate. As of now, America's future is in the cities and for whatever reason, cities tend to generate a certain culture that many people in America's heartland don't want. They're going to have to be more welcoming of it if they want to attract these sort of businesses.
I also disagree that "nobody wants to move to a socially conservative place". CA, Florida, Colorado, Nevada are all examples of places that were conservative or still are but appear to be going through shifts as population moves there.
The real "losers" in this situation are heartland states without major metro areas, like most of the plain states and rural America.
This is not some SV level talent that Amazon will be looking for these positions. So I do not see why salaries will be SDE 2/3/4 or whatever.
But that about the tech economy and SE profession? What will the impact be? More demand for SEs, sure, and more SEs will be attracted to NYC too.
These are all obvious first wave affects, but what will second, third wave affects be?
The largest cities have historically always held dominance in every industry over the long tail, and I imagine that will ultimately be the case here too.
The locations seem to suggest business and lobbying interests. I'd be surprised if any of these offices number more than 20k. It feels like one giant sham for some glorified satellite offices.
It's all just marketing buzz from amazon.
This will be pissing in the ocean compared to the overall size of NYC. 10k employees added gradually? No one will even notice. Google has almost that many employees working within two blocks.
> New York City and Northern Virginia will be the homes for Amazon.com Inc.’s second and third headquarters, according to people familiar with the matter, ending a more than yearlong public contest that started with 238 candidates and ended with a surprise split of its so-called HQ2.
> The imminent announcement is expected as soon as Tuesday, according to the people. Other cities may also receive major sites, some of the people said.
> More to Come