Amazon Selects NYC and Arlington for HQ2—Extracting at Least $4.6 Billion in Subsidies

Amazon announced on November 13, 2018 that it would split its HQ2 project between Long Island City in Queens, New York and Crystal City in Arlington, Virginia (rebranded as “National Landing”). While Amazon claimed the combined subsidies totaled approximately $2.8 billion, analysis by Good Jobs First—the nation’s leading corporate subsidy tracker—found the actual cost to taxpayers would be at least $4.6 billion, more than twice Amazon’s figure. The deal transferred billions in public wealth to the world’s richest person while demonstrating how corporations manipulate subsidy calculations to obscure the true cost of corporate welfare.

The Announcement

After a 14-month bidding war among 238 cities, Amazon selected two locations for its split HQ2:

Long Island City, Queens, New York:

• 25,000 employees promised
• 4 million square feet of office space
• $2.5 billion investment over 10 years

Crystal City, Arlington, Virginia (National Landing):

• 25,000 employees promised
• 4 million square feet of office space
• $2.5 billion investment over 10 years

Additional Announcement: Amazon also announced a 5,000-employee Operations Center in Nashville, Tennessee, receiving $102 million in subsidies—bringing total new employment announcements to 55,000 jobs.

Amazon’s Claimed Subsidies: $2.8 Billion

Amazon’s official announcement highlighted the following subsidies:

New York:

• Performance-based direct incentives: $1.525 billion
• Capital Grant: $325 million
• Total Amazon claimed: $1.85 billion

Virginia:

• Performance-based direct incentives: $573 million
• Additional cash grants and infrastructure: $200+ million
• Total Amazon claimed: ~$800 million

Combined Official Total: Approximately $2.8 billion

Good Jobs First Analysis: At Least $4.6 Billion

Good Jobs First conducted a detailed analysis of the subsidy packages and found Amazon dramatically understated the true costs:

New York (Long Island City) - Actual Total: $2.808 Billion

Breaking down the components Amazon obscured:

• Excelsior Program Grant: $1.2 billion (performance-based tax credits)
• Empire State Development Grant: $325 million (capital grant)
• ICAP Tax Abatement: $386 million (property tax breaks)
• REAP Credits: $897 million (per-employee tax credits)

Additional Hidden Costs: Amazon’s calculation excluded major benefits including infrastructure improvements, opportunity zone capital gains deferrals, and the value of subsidized land and services.

Virginia (Crystal City) - Actual Total: $1.8 Billion

Beyond Amazon’s claimed $573 million:

• Direct Cash Grants: $573 million (Amazon’s figure)
• Virginia Tech Campus: $1 billion (new campus to train Amazon workers)
• Infrastructure Fund: $300 million (roads, transit, utilities)
• Tax Increment Financing: Additional property tax breaks
• Opportunity Zone Benefits: Capital gains deferrals

Combined Actual Total: At Least $4.6 Billion

This represents more than twice Amazon’s claimed $2.8 billion figure, demonstrating systematic manipulation of subsidy calculations.

Cost Per Job: The Deceptive Math

Amazon claimed the cost per job would be approximately $48,000 in New York. Good Jobs First found the actual number was $112,000 per job—more than twice Amazon’s claim.

The Calculation Manipulation: Amazon achieved its lower figure by:

• Excluding benefits that didn’t appear as direct line items
• Amortizing some subsidies over longer periods than others
• Counting infrastructure spending as “general improvements” rather than Amazon-specific subsidies
• Ignoring opportunity costs of foregone tax revenue
• Excluding the Virginia Tech campus from cost-per-job calculations

The Reality: At $112,000 per job for 25,000 jobs, New York would pay $2.8 billion just for the direct jobs—before counting economic activity, tax revenue, or indirect employment. This made the subsidies a negative return on investment even under optimistic assumptions.

The Wealth Transfer to Bezos

The $4.6 billion in subsidies represented a direct wealth transfer to Amazon shareholders, primarily Jeff Bezos:

Bezos’s Personal Benefit:

• Bezos owned approximately 16% of Amazon stock
• $4.6 billion in subsidies increased Amazon’s after-tax profitability
• Increased profits flowed to shareholders through stock appreciation
• Direct benefit to Bezos: ~$736 million

Context of Bezos’s Wealth:

• November 2018 net worth: Approximately $140 billion
• The subsidies represented 0.5% of his total wealth
• Bezos had paid zero federal income tax through Amazon in 2017 and would pay zero again in 2018
• The world’s richest person was receiving nearly three-quarters of a billion dollars in subsidies from taxpayers

The Political Process: Backroom Dealing

The HQ2 selection process excluded democratic accountability at every stage:

No Public Input: Neither New York City nor Arlington held public hearings before committing billions in subsidies. The deals were negotiated in secret between Amazon and top officials:

New York:

• Governor Andrew Cuomo personally negotiated the deal
• Mayor Bill de Blasio was brought in later
• City Council had no vote on subsidy packages
• Community boards were not consulted
• Public learned of specifics only at announcement

Virginia:

• Governor Ralph Northam negotiated directly with Amazon
• Arlington County Board approved incentives in closed session
• Public input was limited to after-the-fact approval
• The $1 billion Virginia Tech campus was announced as a fait accompli

The Justification: Officials argued that public process would have given competing cities an advantage, requiring secrecy. This logic made democratic accountability incompatible with corporate welfare—a feature, not a bug, of the system.

The Immediate Backlash

Unlike the celebratory bidding war, the HQ2 announcement generated immediate criticism:

New York Opposition:

• City Council members condemned the deal
• Community organizers mobilized against subsidies
• Concerns about displacement and gentrification in Long Island City
• Questions about infrastructure strain (subway, schools, housing)
• Growing movement to block the deal

Virginia Response: Arlington’s selection generated less opposition, partly due to:

• Closer proximity to existing Amazon operations
• Less dramatic neighborhood displacement concerns
• Virginia’s more business-friendly political culture
• Better distribution of benefits across the state

National Criticism: Progressive politicians including Bernie Sanders, Alexandria Ocasio-Cortez, and Elizabeth Warren condemned the subsidies as corporate welfare and wealth extraction from working people to subsidize billionaires.

The Data Harvest Revealed

The HQ2 announcement revealed that Amazon’s real strategy had never been to select a single city:

What Amazon Gained:

• Detailed proprietary data from 238 cities on real estate, infrastructure, and subsidies
• Benchmarks for maximum subsidy offers for future negotiations
• 14 months of positive media coverage
• Enhanced bargaining power with Seattle (which had attempted to tax Amazon earlier in 2018)
• Intelligence on workforce, transportation, and development opportunities across North America

What Cities Gained:

• 236 cities: Nothing but wasted time and consulting fees
• 2 cities: The “privilege” of subsidizing the world’s richest person
• 0 cities: A good deal based on cost-benefit analysis

The process demonstrated that the bidding war itself had been a scam—a data extraction and leverage operation disguised as economic development.

Media Coverage and the Bezos Conflict

Coverage of the HQ2 announcement highlighted the conflicts created by Bezos’s ownership of the Washington Post:

The Washington Post’s Coverage: The Post extensively covered the HQ2 announcement, but:

• Treated subsidies primarily as a policy debate rather than as kleptocracy
• Focused on local concerns about displacement and infrastructure
• Ran explainers on how Amazon “won” the subsidies through legal mechanisms
• Gave less prominence to analysis framing the deal as wealth extraction

The Disclosure Issue: The Post disclosed Bezos’s ownership in stories about Amazon, but:

• Disclosure appeared in boilerplate text, not as a central framing issue
• Coverage rarely examined how Bezos personally benefited from subsidies
• The Post didn’t investigate Bezos’s role in lobbying for favorable treatment
• Structural conflicts of interest were acknowledged but not systematically explored

Alternative Coverage: Progressive outlets like The Intercept, In These Times, and publications by Good Jobs First provided more critical analysis, explicitly framing the subsidies as corruption and wealth extraction.

Significance: Corporate Welfare as Institutionalized Kleptocracy

The Amazon HQ2 subsidies demonstrated that corporate welfare had become an institutionalized form of wealth extraction:

The System Design:

• Cities competed against each other in a race to the bottom
• No federal coordination or limits on subsidy competition
• Democratic accountability was structurally excluded
• Cost-benefit analyses were manipulated to justify predetermined outcomes
• Media coverage normalized the corruption

The Wealth Extraction:

• $4.6 billion transferred from taxpayers to shareholders
• Primary beneficiary: world’s richest person
• Subsidies for company that paid zero federal income tax
• No mechanism for recapture if Amazon failed to deliver jobs

The Political Corruption:

• Backroom negotiations excluding public input
• Governors and mayors personally cutting deals
• No legislative approval required
• Economic development agencies captured by corporate interests
• Revolving door between government and corporate consulting

The NYC Deal Collapse (Foreshadowed)

The backlash in New York suggested the deal might not survive political opposition. Community organizers, labor unions, and progressive politicians mobilized to block the subsidies, setting up a confrontation that would come to a head in early 2019.

The Amazon HQ2 subsidies revealed that American federalism had created a system where corporations could extract billions from cities and states while contributing zero to federal tax revenue. Jeff Bezos became the world’s first person worth over $150 billion the same year Amazon received $4.6 billion in subsidies—a form of wealth accumulation subsidized by the same taxpayers Amazon refused to pay federal taxes to support.

Democracy dies in darkness, but corporate welfare thrives in the full light of day—protected by complexity, normalized through competition, and shielded from accountability by billionaire-owned media institutions that frame kleptocracy as economic development.