Amazon

The Corporate Welfare Keeps Rolling for Amazon's Virginia HQ2

Arlington County officials have released the terms of their multi-million dollar subsidy package.

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Jeff Malet Photography/Newscom

While it might have been chased out of New York City, Amazon is still getting the red-carpet treatment from officials in Arlington, Virginia, where the company is planning to locate its long-anticipated second headquarters.

On Tuesday, the Arlington county government released the details of its own incentive package for the e-commerce giant. In return for occupying a certain amount of office space, local officials are promising Amazon millions in straight cash subsidies along with a boatload of new infrastructure improvements for its planned $2.5 billion campus.

How much these subsidies will end up costing taxpayers is a bit of a guessing game.

Arlington's incentive package dolls them out by a formula that promises the company 15 percent of the anticipated increase in the county's tax on hotel and motel stays. County officials estimate that the direct subsidies will cost $23 million over 15 years.

The infrastructure improvements are estimated to cost another $28 million.

The incentive deal also requires county officials to meet once a year with representatives from Amazon, who will "offer insights on the company's transportation, open space and other public infrastructure needs."

These subsidies will be in addition to the $750 million on offer from Virginia's state government.

Unlike that incentive package—which requires Amazon to hit certain employment and wage targets—Arlington's corporate goody bag comes with remarkably few strings attached.

The one-way-street nature of the deal has a lot of Arlington activists steamed.

"What does Amazon have to do to get $23 million from Arlington? Just show up!" reads a tweet from one local anti-Amazon account. County officials have said in response that they can always pressure Amazon to make other concessions later, according to the Washington Post.

Activists' demands are wide-ranging, with the Post reporting that they include everything from the company agreeing to pay union-level wages to construction workers to refusing to do business with Immigration and Customs Enforcement (ICE).

It's understandable that Arlington residents would want something from Amazon in return for the tax dollars they'll be forking over.

However, instead of conditioning this public largesse, a better solution might be to just not offer one of the richest, most successful companies in the world corporate welfare in the first place.

Indeed, recent months have given reason to think these kinds of subsidies are far down on the list of Amazon's reasons for where it will locate its HQ2.

A good example of this is the fact that Amazon decided to place its new headquarters in Arlington and not nearby Montgomery County, Maryland, despite the latter offering $8.5 billion in incentives, or nearly eight times what state and local officials in Virginia have offered.

It was the same story further north, when Amazon picked New York City over the nearby Newark, New Jersey as the site for its other HQ2, despite the fact that the New Jersey location would have come with double the subsidies and incentives.

When fierce local opposition to the terms of New York's incentive package saw the company kill its plans for a NYC campus, Amazon noticeably declined to move across the river to Newark—despite New Jersey officials aggressively reminding the company that their $7 billion incentive package was still up for grabs. Amazon has also said it will be sticking to its plans to add just 25,000 jobs to its planned Arlington campus, despite Virginia offering the company an additional $200 million if it added 37,250 jobs.

It's foolish to look at all the money Amazon is leaving on the table and conclude these government incentive packages are what's driving the company's decision-making.

Offering them anyway is essentially a middle finger to the residents and businesses that are stuck paying for them. As we saw with New York's Amazon deal, the unfairness also lends legitimacy to the complaints of left-wing activists, whose critiques of corporations like Amazon extend well beyond the public subsidies they gobble up.

The Arlington County Board of Supervisors is scheduled to debate this incentive package at its March 16 meeting.

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  1. I wish these idiots would make up their mind. Are roads and other infrastructure a government prerogative or not? Who exactly do you want in charge of this stuff, government or private industry?

  2. Britches needs to learn the concept of “necessary but not sufficient”.

    As in Amazon demanded a subsidy but a subsidy was not sufficient to win the bid.

    I don’t understand the complaint about the infrastructure. That is what governments do.

    If amazon wants hotel revenues they should invest in the local hotels.

  3. When fierce local opposition to the terms of New York’s incentive package saw the company kill its plans for a NYC campus, Amazon noticeably declined to move across the river to Newark?despite New Jersey officials aggressively reminding the company that their $7 billion incentive package was still up for grabs. Amazon has also said it will be sticking to its plans to add just 25,000 jobs to its planned Arlington campus, despite Virginia offering the company an additional $200 million if it added 37,250 jobs.

    They decided that $7 Billion is not enough to compensate them for living along the NJ 76 bus route.

  4. Bezos is an idiot. A very wealthy idiot. He had a perfectly serviceable wife and threw her out for a skanky trollop.

    That is all.

    1. Testosterone poisoning will do that.

      Scott Adams did the same. Except his hottie is a PhD.

      1. Serial monogamy and lifetime monogamy are the norms in America.

    2. You assume a lot there, buddy.

      1. He stands to lose $145 billion dollars on the deal. Maybe his wife was frigid or a pain in the ass. I wouldn’t presume to know or judge. But, I find it hard to believe that any woman, let alone a junior varsity newsbimbo is worth a $145 billion.

        1. He’s getting old enough to think about life in a nursing home and which next-of-kin will decide on his medications.

    3. I sent a pic of their logo to a 13 year old and told her it was mine.

  5. Doesn’t really seem that bad, by contrast (to NJ and MD, at least. Or the post-“yes” rent-seeking you saw in NY.

    tens of millions seems like pigeon feed compared to the spending AMZN is going to bring.

    Im certainly opposed to ‘specific company’ incentives vs. simply lowering state/local taxes to attract business for all.

    1. I actually don’t mind the infrastructure expenses. “We’ll widen the highway due to this major construction project” seems downright reasonable, and increases in water or electrical capacity are flat-out necessary.

      The direct subsidy does grate me a bit, but I’d rather it be in the millions versus billions.

  6. This is the real face of socialism. It’s not helping the poor, it’s exploiting everyone to help select elites.

    1. It’s come to bribing you with your own money that you never paid in taxes. Isn’t that better than bribing you with other people’s great great grand kids money? On the other hand, how can you oppress someone who hasn’t been born yet?

  7. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.. http://www.Home.jobs89.com

  8. Why shouldn’t states compete?

    Though I’d rather see them compete with a low, broad-based tax structure, minimal government regulation, and solid future-thinking infrastructure. If the state builds a better mousetrap, companies will follow the cheese trail to their state.

  9. Amazon doesn’t need the direct subsidy — its blatant corruption. The rest of the package make sense – governments have to spend on infrastructure. Amazon should pay for at least part of it via contribution to aid construction.

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  11. As a result of an epiphany which I recently had, I now do not believe that the financial benefits of this type are not corporate welfare. Rather the payments are simply a bargained-for and (presumably) mutually beneficial exchange. I assume that the governmental entity sort of knows what it is doing, and has determined that benefit which it will receive from the corporate counter-party in the transaction is at least equal to the benefit which it is “paying” to the corporation. If my assumption is correct, it is no more “welfare” than another corporation paying its corporate counter-party because it is getting a benefit.

    Even if you assume that the governmental entity does not know what it is doing, the payment is nothing more than an overpayment; a bad deal. Not welfare.

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