Author Topic: Amazon's new HQ poll  (Read 9049 times)

Sharad

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Re: Amazon's new HQ poll
« Reply #20 on: September 13, 2017, 10:01:29 AM »

I don't think any Canadian cities would be considered. There is way to much regulatory overhead to operate it in another country. Plus the uncertainty around NAFTA make it a non-starter.

My top guesses would be: Philadelphia, Pittsburgh, Austin, Boston.

New York State could offer them a crazy tax package/payout to lure them in, like they did with Solar City.

I'm unsure how NAFTA would impact AMZN's decision for a new HQ, and why it would hold back Canadian options. I personally believe an Ontario HQ is possible for AMZN for a variety of reasons:

1. Supply chain management/transfer pricing: should AMZN choose a Canadian company, it could reorganize the corp. org. structure such that all of its non-US subsidiaries are owned by the Canadian "parent". This Canadian parent can then establish pricing with those countries, and AMZN can manage global taxation in a manner that will create more efficient cash flows and taxation rates than if all of the companies are reporting elsewhere. This can work better than folks may imagine, because of Canadian tax incentives and tax policy.

2. SR&ED and Manufacturing tax credits: AMZN can benefit dramatically from the SR&ED and manufacturing tax credits the Canadian Income Tax Act offers, as I believe that AMZN is reaching a point where profits are now inevitable for the company (in spite of the attempt to keep the company cash flow positive/income neutral). SR&ED tax credits are quite amazing (non-refundable ITC at the basic rate of 15% on qualified SR&ED expenditures, which can be used to reduce tax payable).

3. Talent pool: Should Toronto be selected, AMZN will benefit from the immense pool of talent local universities provide, especially University of Waterloo (a little biased as I'm an alumnus). Many UW students leave for Silicon Valley/Seattle, because there are no real viable options in Canada. By creating a large HQ in Canada, AMZN can pull this talent into its local campus, and give those folks a reason to stay rather than head west.

4. Port lands/transit expansion: AMZN wants great transit and a large downtown presence, and Ontario wants to improve its transit around the city/region. Toronto has a huge area just southeast of downtown (the Port lands) that is grossly underutilized. The city has had a lot of discussion about building the area, and has started to work on new proposals. Getting AMZN into the space would accelerate the expansion into the area, and give AMZN a lot of opportunity to build its HQ how it wants.

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boilermaker75

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Re: Amazon's new HQ poll
« Reply #21 on: September 13, 2017, 10:16:49 AM »
I am surprised not to see any mention of Indianapolis.  Very business friendly climate, educated workforce, and crossroads of America!

And you have two of the largest, and both top 10, engineering schools nearby--Purdue <1 hour and U of I 2 hours.

http://fox59.com/2017/09/11/indy-fishers-mayors-team-up-to-show-amazon-why-central-indiana-should-get-hq2/

CorpRaider

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Re: Amazon's new HQ poll
« Reply #22 on: September 13, 2017, 11:28:55 AM »
RDU or Baaaaahston.
Finally...another finance blog! 

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bargainman

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Re: Amazon's new HQ poll
« Reply #23 on: September 28, 2017, 05:45:01 PM »
I wouldn't want them in my town that's for sure.

shalab

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Jurgis

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Re: Amazon's new HQ poll
« Reply #25 on: September 30, 2017, 11:03:28 PM »
NYTimes weighs in:

https://www.nytimes.com/interactive/2017/09/09/upshot/where-should-amazon-new-headquarters-be.html

Based on this Boston is not a bad place to be in.  8)

(Although I agree with their conclusion that Amazon won't choose Boston.)

boilermaker75

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Re: Amazon's new HQ poll
« Reply #26 on: October 07, 2017, 08:51:03 AM »
"As the world waits to see where Amazon locates its second headquarters, one clue might lie in the rule of thumb of second-home buying: Pick a location thatís not too far from home. In the case of Amazon chief Jeff Bezos, thatís still a pretty wide field...."

https://www.wsj.com/articles/the-many-places-amazon-ceo-jeff-bezos-calls-home-1507204462?mg=prod/accounts-wsj

rkbabang

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Re: Amazon's new HQ poll
« Reply #27 on: October 24, 2017, 11:00:52 AM »

oddballstocks

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Re: Amazon's new HQ poll
« Reply #28 on: October 24, 2017, 11:58:50 AM »
It's an interesting question, I like that "Pittsburg" is on the list, but Pittsburgh, the city in Pennsylvania isn't.  Is this Pittsburg Kansas?  I kid..we didn't have an "h" for a few years in the 1800s, but have had one since.

What makes a region desirable? Everyone can claim good schools.  I mean there are good schools everywhere, it's almost as if they're evenly distributed with our population..

I'm not sure it's a good thing to have Amazon.  We have a few tech companies, Google, Apple, Uber etc and it's done some good things, but also put pressure on the market.  Google has 450 employees here, I'm sure it's dwarfed by whatever's in NYC or Boston or whatever top tier cities there are, but they pay CA prices here.  There is a Googler down our street.  They overpaid for their house, overpay for everything and are trying to sell their house at a wildly inflated price.  They are price insensitive.  They purchased a second house and are dumping money into it like mad.  The thing is making $175k here is more than what most mid level execs make at generi-corps and more than what most business owners make.  Yet that's a fairly entry level salary.

We have already had a boom, the O&G boom, and it'll be back once prices tick up again.  Booms seem fun, until you're paying boom prices.  Land went from $1500/acre in the country to $8,000/acre because suddenly everyone thought they were living on a gold mine.  Rental prices increased, construction companies stopped caring about anything but O&G, it was madness.  Even hotels.  O&G guys were paying $120/night for dumps, so mid-tier places realized they could charge $150-200/night at a Fairfield Inn deep in the burbs and people would be forced to pay.

Now compound this with 50,000 new jobs.  The price pressure would be intense.  Is that good?  I don't know.  I know someone second-hand who is moving from here to work for Amazon in NYC.  He said the price difference for a house here to the burbs in NJ isn't that much.  It's depressing to me to realize that I'm on the verge of living in a HCOL area.  With Amazon and a few other tech companies who knows, this could be just as bad at NJ in terms of price, not something I'm excited about.
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oddballstocks

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Re: Amazon's new HQ poll
« Reply #29 on: October 24, 2017, 12:02:39 PM »
Case in point: https://www.bloomberg.com/news/articles/2014-08-21/pittsburghs-startups-blame-google-for-stealing-tech-talent

I know the Birchmere guys, and Google is draining talent.  NoWait was a huge hit for them.

Another drain is Uber.  They've taken hordes of PhD's from CMU and the robotics lab.  I have mixed feelings on this.  The robotics lab was doing some ground breaking stuff that's been put on ice due to Uber's brain drain.
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