Amazon's announcement of a search for a what it is calling a second headquarters site somewhere in North America is intriguing. I live in Boston, which recently lured GE with a combination of special tax incentives and the city's pre-existing charms. I'd be happy to see Amazon come here so long as the tax breaks aren't a total giveaway. But if I had to predict or bet, I'd suspect that the company winds up choosing Washington, D.C., Virginia, or Maryland.
Jeff Bezos just spent $23 million on a 27,000-square-foot building in Washington, D.C., that he intends to convert into a single-family home, according to a report in the Washington Post newspaper, which Bezos owns.
But there are reasons to choose the Washington, D.C. area beyond the convenience of, or proximity to, the CEO, or friendly local press. Sure, there's a faint case that the D.C. area has the universities — Georgetown, University of Maryland, Johns Hopkins, George Mason, George Washington University, American University — to generate the workforce Amazon needs. And, though D.C. is hardly Silicon Valley or even Kendall Square, there's some web startup tech culture there dating back at least to the era of AOL, which was based in suburban Virginia.
The main reason, though, is the opportunity and threat that comes from the federal government. Opportunity, because the huge federal government, with its taxing power, offers Amazon the chance to sell products and services to the government, including web services — server hosting for websites, computing power — and more run-of-the-mill purchasing that would allow government employees to order things from Amazon the same way that consumers do. And threat, because the federal government is just about the only institution in American life at this point that is powerful enough to challenge Amazon, either by forcing it to break up as an antitrust matter (hence the need for two headquarters rather than one), or by forcing it to collect sales tax on all sales (including those of "marketplace" vendors), or even by some sort of retroactive play on those past sales taxes that went uncollected (though retroactive laws are generally a bad idea, the constitutional prohibition on ex post facto law has been found by courts to apply only to criminal cases, and there's a reasonable case that the taxes were owed all along, so going after the money wouldn't be changing the law, just enforcing a law that already existed.)
What better way to illuminate the job-creating power of Amazon and guard against a government backlash than to park a big new headquarters in Washington and have the Amazon employees having their children go to school with, and play Little League and youth soccer with, the Congressional staffers and Justice Department employees? The proximity might breed envy, but the more likely result would be humanizing Amazon and making it more likeable, and less likely to be the subject of a government attack.
I could be wrong — Amazon may choose a different site, maybe even one in Canada, to underscore that it has options if the American government takes a hostile turn. But the Washington. D.C. metro area would certainly have attractions.
