Amazon is opening a new office in Nashville, Tennessee — but it’s not HQ2.
In addition to its “second headquarters,” which will be split between New York City and Northern Virginia, the company is opening an “East Coast hub of operations” in Nashville. News about the Nashville office was first reported by Reuters on Tuesday and officially announced by Amazon just a few hours later.
“As part of Amazon’s investment, Tennessee, Davidson County, and the city of Nashville will benefit from 5,000 full-time, high-paying jobs; over $230 million in investment; 1 million square feet of energy-efficient office space; and an estimated incremental tax revenue of more than $1 billion over the next 10 years as a result of Amazon’s investment and job creation,” the company said in a press release. In exchange, Amazon is getting “performance-based direct incentives of up to $102 million.”
Amazon first asked local and state governments to submit HQ2 proposals in September 2017, and more than 238 cities and states applied. Some, including Detroit and Las Vegas, included pitch videos with their HQ2 proposals. Many tried to entice the company with financial incentives and tax breaks.
But some critics say that Amazon knew where it wanted to place its locations all along. Most early guesses pointed toward Washington, DC. The company always knew its new office would be in the District but “gamified the HQ2 process and basically created a game which will result in a transfer of wealth from municipalities — fire districts, school districts, and police forces — to Amazon’s shareholders,” Scott Galloway, a professor at the NYU Stern School of Business, said at Recode’s Code Commerce conference in September. “I believe it is a [ruse]. I believe they have no intention of being in any of these [other] 18 cities. I believe this game was over before it started.”
(Amazon will end up placing one of its new offices not in DC proper but in Crystal City, a suburb just a few miles away, which the company has seemingly renamed “National Landing.”)
As more news comes out about Amazon’s plans, it’s becoming increasingly evident that the national, highly publicized HQ2 competition was more than a way to wrest as many incentives as possible from the likely predetermined host cities — it was also a massive data collection operation, through which more than 200 cities and states willingly gave Amazon access to valuable information on land use patterns and more.
In a statement, Nashville Mayor David Briley celebrated Amazon’s decision to open a hub in the city. “These are quality, high-paying jobs that will boost our economy, provide our workers with new opportunities, and show the rest of the world that Nashville is a premier location for business investment,” he said. “We thank Amazon for investing in Nashville, and we look forward to welcoming them to this community.”
But other Nashville lawmakers weren’t happy with the HQ2 process. Nashville’s City Council passed the “Do Better” Nashville ordinance in January, which added more requirements to the incentive approval process. The ordinance was introduced by council member Anthony Davis, who was reportedly frustrated by the lack of oversight and transparency regarding the city’s Amazon bid.
Stacy Mitchell, the co-director of the Institute for Local Self-Reliance, told me this data may be the most valuable thing Amazon got from the HQ2 process. “Amazon now has very fine-grained data and information and, in some cases, future intelligence” about the 238 cities that submitted HQ2 proposals, she said. “They’re going to use this data to site all kinds of things: stores, warehouses, offices, tech centers. It seems to me that this is the most valuable thing Amazon has gotten out of this, even accounting for the billions of dollars in subsidies that they are likely to walk away with.”
The Nashville decision, Mitchell said on Twitter, was about “deflection.”
“Sure Amazon is going to set up facilities in Nashville. It’s also going to set up in lots of places. It’s a massive corporation,” she tweeted. “What Nashville really offers Amazon is a way to upend today’s news coverage in order to obscure what we all know to be true. Amazon is expanding in the nation’s two major centers of power, because it intends to envelope, smother, and usurp that power for itself.”
More than 200 cities handed Amazon valuable data — and offered the company hundreds of millions of dollars in subsidies on top of that. Now that Amazon knows what every HQ2 contestant has to offer, and just how much money they will offer, there’s very little getting in the way of its national domination.