Amazon is opening a 48,000-square-foot office in Santa Barbara, Calif., adding 150 jobs and doubling its workforce in the city, the company announced this week. The office is for "Alexa tech teams," it added.
Santa Barbara Mayor Cathy Murillo commented: "We welcome a new Amazon office in downtown Santa Barbara, adding to the mix of innovative, technology companies in our region. We encourage their employees to participate in community events and enjoy the amenities of local restaurants, shopping, and arts and culture."
The company stressed that it has "created more than 45,000 full-time jobs in California since 2010 and invested over $34.5 billion in the state, including infrastructure and compensation to our employees." In 2012, California forced Amazon to begin collecting state sales tax, and in the past decade the company has greatly expanded its network of warehouses in California.
---
Amazon founder Jeff Bezos was irritated that Elon Musk had won $1.3 billion from Nevada in 2014 to open a large battery plant. That's why, according to Bloomberg News, Amazon pushed so hard to get major concessions from local and state governments around the country and in Canada when, in 2017, it announced a competition for a second headquarters.
Bloomberg wrote: "In meetings, the Amazon.com Inc. chief expressed envy for how Musk had pitted five Western states against one another in a bidding war for thousands of manufacturing jobs; he wondered why Amazon was okay with accepting comparatively trifling incentives. It was a theme Bezos returned to often, according to four people privy to his thinking. Then in 2017, an Amazon executive sent around a congratulatory email lauding his team for landing $40 million in government incentives to build a $1.5 billion air hub near Cincinnati. The paltry sum irked Bezos, the people say, and made him even more determined to try something new."
Bloomberg said that Bezos's pressure to win more money "prompted executives to scrap lessons learned through the years in favor of an unapologetic appeal for tax breaks and other incentives.
"Employees with experience negotiating deals around the country anticipated problems, but their red flags were ignored by those eager to please Bezos with a new playbook for a big win. Secretive and walled off from the rest of the company, according to people familiar with the situation, the HQ2 team members marinated in the headlines and hoopla and persuaded themselves Amazon would be welcomed anywhere."
While the effort achieved some of its goals, it was also in part a PR disaster for the company, when in one of the two winning cities--New York City--a groundswell of protest developed against the city and state's bid of $3 billion, which included a $500 million grant to build the new headquarters in Queens. As Bloomberg put it: "Amazon's negotiating strategy, internally summarized as 'F*** you. We're Amazon,' had met its match."
In addition, many local governments around the country, burned by the time and expense of bidding on a project that was going to be limited to 20-25 areas at the most, felt manipulated by Amazon and are exploring ways of cooperating to forestall the kind of bidding war that Amazon wanted.
And in a postscript to the story of Amazon's failed attempt to build HQ2 in Queens, late last year the New York Times reported that Amazon had signed a lease for 350,000 square feet of office space in the Hudson Yards area near the Javits Center that will house more than 1,500 employees--and received no tax credits or other government handouts.
While some noted that Amazon's presence will be much smaller than the HQ2 project, others happily pointed out the inconsistencies. The Times wrote: " 'Won't you look at that,' Representative Alexandria Ocasio-Cortez, who represents an area in Queens near where the campus was to be built, wrote on Twitter. 'Amazon is coming to NYC anyway--*without* requiring the public to finance shady deals, helipad handouts for Jeff Bezos, & corporate giveaways.' "
And state Senator Michael Gianaris, who initially supported HQ2 but changed his mind after learning more about the incentives, said in a statement: "Amazon is coming to New York, just as they always planned. Fortunately, we dodged a $3 billion bullet by not agreeing to their subsidy shakedown earlier this year."