In mid November, Amazon finally let the cat out of the bag and announced the headquarters locations were going to be in Queens in New York City and in Arlington, Virginia near Washington DC. The headquarters will change the skyline of the cities and if Amazon continues its growth will change the cities. In its hometown of Seattle, Washington Amazon has grown from 190,000 sq ft to 10.7 million sq ft of office space which is 19% of the prime office space in Seattle. In addition, Amazon has facilities across the country, but not head office jobs. In Seattle, the the 45,000 workers are paid an average of $110,000 as reported by the Seattle Times.
In an article by Matt Lundy, the reported wonders what will be the ripple effect? If Amazon grows to the same size or near the same size as Seattle, it will be the biggest tenant in New York and Northern Virginia At the moment Citibank is the largest tenant in New York with 3.2 million sq ft and the US Department of Defence has 2.8 million sq ft.
If Amazon achieves the growth expected or hoped for, New York City will be giving them a tax credit of $1.2 billion and Arlington will put up $573 million.
Linking to dividend paying stocks, if Amazon continues to be the largest company, it will continue to change lives of consumers and maybe everyone will be a Amazon Prime user. While it is expensive for the cities to offer money for jobs, the process that all the cities went through to bid for Amazon likely helped the cities figure out Plan B, if you do not get the locations. In that sense as an investor you should have a Plan B for what happens if your investment decision is good or needs adjusting.
There are more questions than answers, till the next time – to raising questions.