If Amazon Leaves NYC, Boston May Benefit

Technology

Published: February 9, 2019 8:40 am

Last Updated: January 31, 2020 12:49 am

A number of reports indicate that Amazon.com Inc. (NASDAQ: AMZN) may pull out of New York City as a location for its second headquarters. The “second headquarters” distinction is actually split with Northern Virginia, which got a part of the new operations as well. The potential of 25,000 new jobs for the New York area has not stopped a loud chorus of objections to the billions of dollars of tax benefits Amazon will get, or local residents worried about rising real estate values and strains on local infrastructure. If Amazon decides against New York, several of the 20 cities the company initially viewed as finalists will be back on the table. Many analysts originally thought Boston would get Amazon’s nod. It now becomes a favorite, if not the favorite, alternative.

Of the original 20 cities, near the end of the contest, a very small number were handicapped as probable picks. These included those with large amounts of commercial space, proximity to international airports, a ranking of local technology worker skills, the numbers of these workers and their likely competition. A rating by recode, which handicapped the cities, put Boston near or at the top of each of these. Office costs were well below New York’s, as were wages. Boston has long been a major location for tech companies, and the area along Route 128 that circles the city has been the home to tech operations and startups for years.

Boston may have made the most detailed proposal to Amazon of any other city. Its formal pitch was over 200 pages long and said:

As the higher education capital of the world, Boston attracts and retains the best and brightest from around the globe and we are proud to be home to the highest concentration of young adults of any of the 25 largest cities in the country. In July 2017, we released the first citywide plan in more than fifty years, Imagine Boston 2030. Shaped by more than 15,000 voices, this plan lays the framework and vision for our future. With Imagine Boston 2030, we are ready to welcome Amazon’s second North American headquarters.

Boston is one of only three locations in the northeast that were part of the Amazon list of finalists. The other two were New York and Newark. Newark almost certainly was demographically the worst-off city. This could affect how easy it would be to get high-level workers, locate good housing in large volume and be located in a city that could afford huge tax credits without undermining its own future.

Amazon has, if media reports are correct, started to consider its options if New York City becomes less attractive. If Boston is not at the top of the list as the next place Amazon would look, it is close.