The Cities That Amazon HQ2 Left Behind
By Victor Luckerson
Before the Amazon HQ2 hysteria started, Bob Duffy twice asked Jeff Bezos to make an investment in Rochester. The upstate New York locale once employed about 60,000 tech workers, when the film empire of Eastman Kodak was one of the most valuable enterprises in the world. Duffy worked at Kodak as a messenger and dark room production tech for a year after high school. His wife, Barbara, worked in the company’s HR department for 20 years. Their house is mortgaged through ESL Federal Credit Union, the bank that founder George Eastman established in 1920 to help Kodak employees finance their homes. “Kodak had such an impact in almost every aspect of civic life,” says Duffy, who served as Rochester’s mayor from 2006 to 2010. “If you needed something done, Kodak was there to help you.”
In September 2017, Duffy read about an exciting opportunity. Amazon planned to open a second headquarters that would house 50,000 employees. In the words of CEO Bezos, this would be a “full equal” to the corporation’s Seattle home base. The company promised billions of dollars in direct investment, and further investment from commercial and real estate developers was sure to follow. Metropolitan areas across the continent with at least 1 million residents were invited to apply.
Why not Rochester? thought Duffy. Amazon could be the city’s Kodak for the modern era. In its 208-page bid, submitted in tandem with nearby Buffalo, the city proposed housing Amazon on the old Kodak campus, the symbol of a faded tech giant. But Rochester was knocked out of the running for HQ2 in January. “We always held out hope that we would make the top 20. I was disappointed when we didn’t,” Duffy says. “Many midsized cities do struggle and they do work very hard for growth. … [Amazon] could come in and actually transform the environment with their investment.”
With the benefit of hindsight, it’s now clear that few of the 238 communities that applied for HQ2—including many of the 20 finalists—ever really stood a chance. On November 13, the online retailer announced that HQ2 will not be an HQ2 at all; instead, the company will open two smaller sites in Long Island City, a Queens neighborhood in New York, and Crystal City, a Virginia suburb of Washington, D.C. Those cities already house Amazon’s two biggest offices away from the West Coast. They’re nexuses of financial and governmental power. And they’re just a few miles from two of Bezos’s lavish homes. Amazon broke the rules of its own game, then picked the most obvious candidates.
Increasingly the U.S. economy is centered on so-called “superstar cities” like New York, D.C., and San Francisco. These places, like the giant corporations that call them home, benefit from scale, deep talent pools, and network effects that make their power more entrenched as time goes on. Other locales struggle to keep pace, just like the brick-and-mortar retailers trying to compete with Amazon’s might. The HQ2 frenzy resonated so broadly because many places knew a chance like this would never come around for them again.
Now that it’s over, the cities that lost are left to make sense of a process that was always stacked against them. Meanwhile, Amazon is set to reinforce an economic system that is increasing inequality, monopoly power, and political polarization in one fell swoop. “We really do have two classes of places,” says Mark Muro, a senior fellow of the Metropolitan Policy Program at the Brookings Institution. “We have the superstar metros that are highly technology based … and then we have hundreds of places that are sort of left behind.”