Amazon to Split New HQ Between Crystal City, Virginia and Long Island City, New York

Long Island City, New York

Crystal City, Virginia

It is expected that Amazon will announce today that its new headquarters will be split between Crystal City, Virginia and Long Island City, New York, handing Virginia governor Ralph Northam a major economic victory.  The other victor is the Long Island City portion of New York City which has already seen amazing redevelopment and gentrification over the last 20 years.  When the announcement comes, it will underscore the reality that red states are making themselves increasingly unattractive to progressive corporations and businesses that want educated populations that are welcoming to a diverse work force.  A piece in the New York Times looks at Amazon's decision and its likely economic impact.  Here are highlights (the Washington Post also has a piece here): 

After conducting a yearlong search for a second home, Amazon has finalized plans to have about 50,000 employees in two locations, according to a person familiar with the decision-making process.

The company has decided to move to the Long Island City neighborhood of Queens, and to the Crystal City area of Arlington, Va., a Washington suburb, the person said. Amazon, which plans to officially announce the decision on Tuesday, already has more employees in those two areas than anywhere else outside of Seattle, its home base, and the Bay Area.

The need to hire tens of thousands of high-tech workers has been the driving force behind the search, leading many to expect it to land in a major East Coast metropolitan area. Many experts had pointed to Crystal City as a front-runner, because of its strong public transit, educated work force and proximity to Washington.

About 1,800 people in advertising, fashion and publishing already work for Amazon in New York, and roughly 2,500 corporate and technical employees work in Northern Virginia and Washington. Amazon announced plans for a second headquarters in September 2017, saying that the company was growing faster than it could hire in its hometown, Seattle. The company said it would invest more than $5 billion over almost two decades in a second headquarters, hiring as many as 50,000 full-time employees that would earn more than $100,000 a year on average.

HQ2 would be the “full equal to our current campus in Seattle,” the company said. Picking multiple sites allows it to tap into two pools of talented labor and perhaps avoid being blamed for all of the housing and traffic woes of dominating a single area. It could also give the company greater leverage in negotiating tax incentives, experts said.

The HQ2 search sent states and cities into a frenzied bidding war. Some hired McKinsey & Company and other outside consultants to help them with their bids, investing heavily in courting Amazon and its promise of 50,000 jobs. Even half of that would amount to one of the largest corporate location deals on record, according to Greg LeRoy, executive director of Good Jobs First, which tracks corporate subsidies. “These are very big numbers,” he said.

As Amazon’s search dragged on, residents in many of the 20 finalist cities worried about the impact such a massive project could have on housing and traffic, as well as what potential tax incentives could cost the community. The decision to split HQ2 into two sites could alleviate some of that resistance.

Seattle has been one of the fastest growing cities in the country, in part because of Amazon’s growth. The company has about 45,000 employees in the city, and the company said it needed to hire more employees than the city could attract or absorb.

The piece in the Post notes as follows:

The choice of Crystal City in Arlington County as one of the winners could cement Northern Virginia’s reputation as a magnet for business and potentially reshape the Washington region into an eastern outpost of Silicon Valley over the next decade. The decision hands Virginia Gov. Ralph Northam (D) and local leaders the largest economic-development prize in a generation — one promising billions of dollars in capital investments alone — but could also put pressure on the region’s already steep housing prices, congested roads, and yawning divide between wealthy and low-income residents.

It also would represent a victory for New York Mayor Bill de Blasio (D) and Gov. Andrew Cuomo (D), who had joked that he would change his name to “Amazon Cuomo” if necessary to land the project.

Virginia Makes A Push for LGBT Tourism Dollars

With Virginia being hammered by reduced federal government spending, one of the pushes of Gov. Terry McAuliffe has been to pursue the LGBT tourism dollar.  Indeed, McAuliffe has set up and LGBT Tourism Commission (on which some of our friends currently serve) and, unlike members of the Virginia GOP who continue to prostitute themselves to Christian hate groups and extremists, he realizes that being welcoming to all makes good business sense.  A piece in the Daily Press looks at this common sense effort that more parts of Virginia need to embrace (after years of lagging, Norfolk has realized the attractiveness of welcoming the pink dollar).  Of course, the current anti-LGBT toxicity reigning in North Carolina makes Virginia destinations look even more attractive to many living in the mid-Atlantic region.  Here are highlights:

RICHMOND – You can now buy "Virginia is for Lovers" trucker hats with a gay pride flag incorporated into the state's iconic tourism pitch.

The hat, and other state swag, is part of a new branding effort targeting LGBT tourists. There's a new web page highlighting events and destinations that have self-identified as LGBT friendly and a new resource guide for businesses looking to cash in.

The Virginia Tourism Corporation rolled out the campaign heading into this weekend, just ahead of the Virginia Pridefest in Richmond. But this is no limited-time event.

"This is going to be fully integrated in all our marketing, from top to bottom," tourism corporation spokeswoman Caroline Logan said. "This will be going on forever as far as we're concerned."

Eight other states have done something similar, but Virginia is the first one in the South, unless you count Florida. The campaign has been two years in the making, started by a push from Gov. Terry McAuliffe, who made clear from before he took office that he wants everyone to visit Virginia, and to leave lots money.

LGBT tourists – and that stands for lesbian, gay, bisexual and transgender – make up 10 percent of the U.S. tourism market, Logan said. They spend somewhere around $57 billion a year on travel and tourism, she said.

"They travel more and they stay longer and they spend more money," she said.

Logan said campaign feedback has been positive, but the effort is bound to be controversial for some.

Businesses and events have to opt into this particular marketing campaign, just as they do for other targeted state campaigns. The database of places to stay included 120 locations on rollout. Among other things, the website features a picture of McAuliffe marrying a lesbian couple.

In addition to the web page and database, the tourism corporation has created an LGBT Tourism Resource Guide for state businesses in the tourism industry, which generated an estimated $23 billion in spending last year in the state.

As noted, here's why courting the LGBT tourism dollar makes sense: "they travel more, stay longer and spend more money."  Only a fool - or religious extremist of GOP political whore - would not welcome that kind of traveler. 

Hampton Roads' Reliance on Military Spending Comes Home to Roost

Norfolk Naval Base

For many decades the Hampton Roads region has blindly relied on U.S. military spending to power the local economy.  On a larger scale, Virginia has made the same mistake, but nowhere to the extent of Hampton Roads.  Far too little effort was made to attract other businesses and to diversify the local economy and, as a result, for years there has been a brain drain of college educated young adults who often choose to go to New York, Atlanta or Washington, D.C. for not only a more vibrant economy, but also for more socially diverse and welcoming to all communities.  Now, with government and military spending cuts the proverbial chickens are coming home to roost.  A piece in the Washington Post looks at the results of such shortsightedness and until recently social conservatism.  Here are highlights:

NORFOLK — The hammerhead crane hangs over the shipyards here, a pistol-shaped steel cage that could lift 350 tons in its day. It is rusting, its power system has been disconnected, and the U.S. military has no plans to ever employ it again. . . . . The crane is obsolete, built to lift turrets onto battleships the Navy no longer deploys. But its fate embodies the economic uncertainty that has swamped one of the nation’s most military-dependent regions.

For three-quarters of a century, the Hampton Roads area rose and fell with the federal defense budget, always confident that any cutbacks would prove temporary. Under President Obama, a new reality has sunk in. Spending cuts have stalled growth in the region, pushed thousands of blue-collar workers out of good-paying jobs and forced civic leaders to contend with a once-unmentionable question: how to survive if the military spigot never opens again.

The Norfolk area has suffered disproportionately, even among defense communities, from decisions by Obama and Congress to reduce the size and composition of military budgets. Economists and union leaders say that is because Hampton Roads has been late to follow the lead of other regions, including the Washington area, that took steps over the past decades to incubate private industries and balance out their reliance on defense.

Norfolk has become a national outlier, saddled with a workforce that is less educated than many comparable communities and an economy that has depended too much, for too long, on government.

Communities across America have struggled with economic transition in recent decades . . . Many of them have followed a similar playbook. They use tax breaks and other government incentives to attract clusters of businesses in knowledge-based industries such as technology. And they woo entrepreneurial, high-skilled workers who might work at those companies — or start their own businesses.

Norfolk had not launched such an effort, in earnest, until 2012. . . . They need one now. Defense spending has fallen quickly from making up more than half of the Hampton Roads economy to less than 40 percent.

Over the past two years, nearly 4,000 manufacturing workers in the region have lost their jobs, according to the Labor Department. Layoffs from defense contractors, including 700 members of the Boilermakers union who were given pink slips less than a month before Christmas, came as the Navy reduced spending on ship building and maintenance.
The cuts have drained buying power from the local economy. Compounding the problem, there are nearly 30,000 fewer military jobs in the region today than a decade ago, and the remaining members of the military stationed here have seen their pay curbed in recent years.

Federal defense contract spending in the region was $9.4 billion in 2015, a $1.5 billion drop from the previous year — and lower than 2009 levels, even before adjusting for inflation. . . . Norfolk lost more businesses in the economic recovery than any other major city in the nation, according to census data compiled by the Economic Innovation Group.

The debate over how to transition the region’s economy is not far along. The local chamber of commerce and a nonprofit economic development are seeking to identify “clusters” of industries that could carry the region going forward and have preliminarily found a few, including biotechnology and advanced manufacturing. But their report is not finalized, and local leaders are only beginning the process of figuring out how to seed the growth of those industries.

Regional officials do not hold much hope of defense spending surging again, at least not in a way that will lift Hampton Roads. Today’s Navy is shifting focus to the Pacific Ocean, which means more action for West Coast shipyards and less here. Across its branches, the military is spending more on information technology, which benefits higher-tech regions such as the Washington area.

Compounding the problem is the backwardness of the Republican controlled General Assembly that seeks to inflict right wing Christian beliefs on all of Virginia and which will not even take climate change seriously even as it threatens some of the major military bases in Hampton Roads.  Since taking office, Democrat Governor Terry McAuliffe has been on a mission to attract new businesses and industries to Virginia and argued that Virginia must be welcoming to all.  So far that message has fallen on deaf ears with the Virginia GOP.