With its high-profile North American sweepstakes to land the coveted HQ2, Amazon set out to change the game in corporate site selection. The new headquarters would be "a transformational project," the company declared in its 2017 request for proposals. State and local economic development leaders eagerly took the bait, with 238 localities in the United States, Canada and Mexico offering all manner of incentives to get in on the deal.
Nearly 18 months later, with the company pulling out of a deal to locate part of the facility in New York, Amazon may well have changed the game, but not in the way it had hoped.
"The idea of doing this national, public, in-your-face sweepstakes model, I don't think we're going to see this again," said John Boyd, a Princeton, New Jersey-based consultant who guides companies in the site selection process.
Public bidding wars like the HQ2 process had been a tried and true way for companies to wring incentives from state and local governments. In the 1980s, General Motors collected tax breaks from Tennessee in exchange for choosing Spring Hill as the site of its new Saturn plant following a nationwide bidding war. More recently, Nevada beat out Texas, California, Arizona and New Mexico as the site of a new Tesla battery plant by offering $1.3 billion in tax breaks.
But incentives were already becoming controversial by the time Amazon launched its HQ2 process in September of 2017. The company nonetheless insisted on secrecy on the part of its 20 finalist cities, on the apparent belief that no one would want to pass up the 50,000 jobs and billions in investment it was offering. In the end, however, the opaque process left community groups in New York feeling blindsided when details of the deal emerged.
Boyd said that in contrast to Amazon, most companies have already become far more careful about engaging all stakeholders.