Feb 19, 2018 - Technology

D.C. hopeful for Amazon HQ2 bid

Washington, D.C.

Brooks Kraft LLC / Corbis via Getty Images

Three of the 20 finalists for Amazon's second headquarters — D.C., Maryland and Northern Virginia — are located in the Washington metropolitan area, leading some to speculate that the nation's capital could be the ideal landing spot for HQ2.

The bigger picture: As owner of the Washington Post and a sizable home in the city, Jeff Bezos has obvious ties to the region. And as Amazon continues to grow into new (and some highly regulated) business areas, it would make sense to be in the federal government's backyard.

Why D.C. could end up being Amazon's next home:

  • Amazon Web Services, which counts on government agencies for many of its clients, has helped the company, at least 3 of its key executives and 2,500 employees establish a strong presence in the D.C. area.
  • Former AWS executive Peter Cohen believes that D.C.'s deep talent pool — made up of "defense contractors, legitimate software companies and agencies that represent tens of thousands of people" — could be a huge asset for a company that is always looking for more talent than it can find, per The Information.
  • Of all the HQ2 finalists, D.C. has the largest number of college graduates (52% of population), according to Echelon Insights.
  • In addition to being a major tech hub with roots in the early days of the Internet (hello, AOL), Northern Virginia is the country's data center capital. In fact, 70% of the world's internet traffic flows through Loudoun County, with submitted a joint bid with Fairfax County.

Yes, but: Skepticism about the benefits of HQ2 are growing in some of the cities that made the finals, per Bloomberg.

  • Critics say HQ2 would "divert money from schools and other services, making housing more unaffordable and clogging roads and straining transit."
  • Others worry whether the massive tax incentives being offered by HQ2 finalists would be the most efficient allocation of state funds.
    • The $5 billion being offered by Maryland, for example, would be a drop in the bucket for the world's largest online retailer, which reported its highest profit ever (almost $2 billion) in the last quarter of 2017.
  • HQ2 would be a distraction to the area's struggling start-up scene, Glen Hellman, long-time member of the Washington business community, wrote in a blog post arguing against the Amazon-Washington match. "Amazon HQ2 is going to suck the talent out of the startup system that will be to DC what Amazon is to Seattle."

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