Amazon HQ2 RFP

Status
Not open for further replies.
Maryland’s transportation chief said Tuesday that he has promised Amazon a “blank check” for any transportation improvements the retail giant would want if it chooses the state’s Washington suburbs for a second headquarters.

Transportation Secretary Pete K. Rahn said that amount “could be more or could be less” than the $2 billion in unspecified transportation upgrades the state has already committed to as part of its $5 billion pitch for Amazon to choose the White Flint area of North Bethesda in Montgomery County.

“Our statement for HQ2 is we’ll provide whatever is necessary to Amazon when they need it,” Rahn told state senators during a hearing on his department’s budget, according to an online video archive of the public meeting. “For all practical purposes, it’s a blank check.”

Rahn said the state doesn’t have the $2 billion budgeted, saying, “I don’t know how we’d do it.
Click to expand...

https://www.washingtonpost.com/news...to-clinch-amazons-hq2/?utm_term=.1ad7c14cefa0
 
jass said:
https://www.washingtonpost.com/news...to-clinch-amazons-hq2/?utm_term=.1ad7c14cefa0
Click to expand...

Huh, kinda seems like a hope and a prayer. This is why I worry about a NYC bid. Transit system is already in place to handle 20-50K extra workers. No need to rely on vague promises without the funding attached to them.

Back of the envelope math - 20,000 initial employees making 100K on average means 5% tax (on avg) in Maryland. That's an extra $100M a year in revenue. Not chump change, but to pay off a $2-3Bn infrastructure investment it would take 20-30 years to pay off even in a no time value of money environment. One would assume Maryland will issue bonds for this, thus making it even more expensive.
 
tangent said:
Wow... personally if I was a company a blank check approach by the state of Maryland would be a huge red flag if they were actually serious. A unbudgeted blank check would eventually come around as higher taxes on the workforce and unsustainable state spending. And who else are they making promises they can't keep to?
Click to expand...

It's all hot air. The transportation secretary doesn't have the authority to grant those funds. Even if they did have the money (which they don't) it would take years and years for planning and construction to happen. I don't think Amazon wants public transportation 10 years from now - they want it ready when they are.
 
It's not a blank check if it's earmarked for transportation improvements. It's just saying that Amazon can choose what transportation improvements it wants.
 
tysmith95 said:
It's not a blank check if it's earmarked for transportation improvements. It's just saying that Amazon can choose what transportation improvements it wants.
Click to expand...

Without restrictions, it is a blank check. Transportation improvements can mean a lot of different things. Would a $2B monorail from DC proper to the campus site for use by Amazon employees exclusively be appropriate?
 
Rover said:
Back of the envelope math - 20,000 initial employees making 100K on average means 5% tax (on avg) in Maryland. That's an extra $100M a year in revenue. Not chump change, but to pay off a $2-3Bn infrastructure investment it would take 20-30 years to pay off even in a no time value of money environment. One would assume Maryland will issue bonds for this, thus making it even more expensive.
Click to expand...

You need to go a bit further down the envelope. Say it takes 40 years to pay off with the enhanced tax revenue, borrowing costs, etc. That still means it's an essentially free upgrade. But then consider whether some of it might have been done anyway, regardless of Amazon. Maybe instead of a $3 billion upgrade, they were going to do $ 1 billion. That could mean the state getting a better infrastructure package for less cost than the original concept.

As you say, it's all back of the envelope, but look at it in Boston terms. We need to do red-blue and north-south rail whether or not Amazon comes. How nice would it be to get that done for half the cost, using Amazon derived tax revenue to subsidize the project.
 
HenryAlan said:
You need to go a bit further down the envelope. Say it takes 40 years to pay off with the enhanced tax revenue, borrowing costs, etc. That still means it's an essentially free upgrade. But then consider whether some of it might have been done anyway, regardless of Amazon. Maybe instead of a $3 billion upgrade, they were going to do $ 1 billion. That could mean the state getting a better infrastructure package for less cost than the original concept.

As you say, it's all back of the envelope, but look at it in Boston terms. We need to do red-blue and north-south rail whether or not Amazon comes. How nice would it be to get that done for half the cost, using Amazon derived tax revenue to subsidize the project.
Click to expand...

This is the kind of argument sports team owners make when they ask the public to pony up for a shiny new stadium - it'll pay for itself!

Call me a skeptic. In Maryland if the infrastructure improvements are primarily directed for Amazon use (the aforementioned monorail to campus example) then that blows this theory out of the water.
 
I am in favor of Massachusetts offering infrastructure improvements to wherever Amazon tries to place their headquarters. For example road improvements plus a new commuter rail stop if it's in Assembly/Somerville, or the Blue/Red connector and an extension to Lynn if it's in Suffolk Downs.
 
tysmith95 said:
I am in favor of Massachusetts offering infrastructure improvements to wherever Amazon tries to place their headquarters. For example road improvements plus a new commuter rail stop if it's in Assembly/Somerville, or the Blue/Red connector and an extension to Lynn if it's in Suffolk Downs.
Click to expand...

I would also depending on cost. Is there a reliable estimate for the two Blue Line projects (Red Line connection and extension)? The point being if you have a GLX situation where Amazon is building a 2nd HQ but the cost overruns are going berserk, in that case you'd have to grit your teeth and bear it while the contractors soaked you since they'd know the state couldn't cancel the project. That would be....interesting.
 
Rover said:
This is the kind of argument sports team owners make when they ask the public to pony up for a shiny new stadium - it'll pay for itself!

Call me a skeptic. In Maryland if the infrastructure improvements are primarily directed for Amazon use (the aforementioned monorail to campus example) then that blows this theory out of the water.
Click to expand...

Except that is precisely not the argument I'm making. I'm suggesting that it might help with costs the state needs to bare regardless.
 
HenryAlan said:
You need to go a bit further down the envelope. Say it takes 40 years to pay off with the enhanced tax revenue, borrowing costs, etc. That still means it's an essentially free upgrade. But then consider whether some of it might have been done anyway, regardless of Amazon. Maybe instead of a $3 billion upgrade, they were going to do $ 1 billion. That could mean the state getting a better infrastructure package for less cost than the original concept.

As you say, it's all back of the envelope, but look at it in Boston terms. We need to do red-blue and north-south rail whether or not Amazon comes. How nice would it be to get that done for half the cost, using Amazon derived tax revenue to subsidize the project.
Click to expand...

You also have to factor in operating and maintenance costs, especially if it is new rather than upgrades or replacements, during those years to get a true apples to apples comp.
 
Rover said:
I would also depending on cost. Is there a reliable estimate for the two Blue Line projects (Red Line connection and extension)? The point being if you have a GLX situation where Amazon is building a 2nd HQ but the cost overruns are going berserk, in that case you'd have to grit your teeth and bear it while the contractors soaked you since they'd know the state couldn't cancel the project. That would be....interesting.
Click to expand...

I know, I don't want to see a repeat of the GLX. That just screams corruption to me, although we no longer have strong enough local media to investigate that.

But the BLC and extension would help the region as a whole, not just Amazon.
 
Rover said:
This is the kind of argument sports team owners make when they ask the public to pony up for a shiny new stadium - it'll pay for itself!

Call me a skeptic. In Maryland if the infrastructure improvements are primarily directed for Amazon use (the aforementioned monorail to campus example) then that blows this theory out of the water.
Click to expand...

That's a poor argument, because a stadium is not useful or necessary. It's a fun toy. Transit improvements are useful and necessary; making them pay for themselves is a nice bonus.
 
The $2 billion cometh, and now the $2 billion goeth, sayeth the governor

https://www.washingtonpost.com/loca...72e2047c935_story.html?utm_term=.397e171676e0


__________________________________
Apparently, Maryland's proposal also includes a clawback of state monies spent, or revenues foregone because of incentives, if Amazon doesn't create at least 40,000 jobs.

Its not clear how Maryland would be able to spend $2 billion in infrastructure at/near the White Flint site. White Flint already has a Metro station, build a second station? Commuter rail tracks nearby, so maybe a second commuter rail station for Rockville?

However, CSX owns the railroad tracks, and only allows inbound commuter rail service in the AM, and outbound service in the PM. To have two-way service during the day, CSX told the state to build a third track. The state hasn't. And of course, the Metro Red Line basically parallels the commuter rail tracks in this area.
 
Last edited:
HenryAlan said:
As you say, it's all back of the envelope, but look at it in Boston terms. We need to do red-blue and north-south rail whether or not Amazon comes. How nice would it be to get that done for half the cost, using Amazon derived tax revenue to subsidize the project.
Click to expand...

Boston area doesn't "need" to do any infrastructure expansions. By definition, to support the existing economy and existing population and existing settlement patterns we "need" to maintain the infrastructure we currently have.

And 50,000 more workers in some areas in and around Boston are likely already sustainable with existing infrastructure, especially downtown where multiple lines converge within a mile or so.

Yes, in order to grow the population and grow the economy we need to be able to move more people around and move them around more efficiently in both time and dollar terms.

To that end I agree that we should do those projects and other projects at some point to support some future growth... alternatively enough is going to be enough at some point and we are going to have to plan for a stagnant or declining population at least in the immediate Boston area and look more seriously at reducing the maintenance costs of our infrastructure for sustainability rather than growth.

Bottom line is that any plans for infrastructure needed specifically for Amazon should be paid for with the taxes on the economic activity that Amazon creates. It isn't a moral principle, it is just a practical matter of sustainability. A deal isn't a deal if you end up paying a higher price later.
 
tangent said:
Boston area doesn't "need" to do any infrastructure expansions. By definition, to support the existing economy and existing population and existing settlement patterns we "need" to maintain the infrastructure we currently have.

And 50,000 more workers in some areas in and around Boston are likely already sustainable with existing infrastructure, especially downtown where multiple lines converge within a mile or so.
Click to expand...

With respect, no way. Maintenance of the status quo (constant delays on the major transit lines, inability to deal with routine winter weather, constant peak congestion of the major roadways into the city) is going to cause attrition of the workforce over the medium to long term. Unless you mean bringing our current infrastructure up to a state of good repair, and operating it optimal levels.

And adding 50,000 anywhere? People would feel that. imagine pushing 50,000 more people through the core crossings. Those platforms don't seem like they can deal with it.
 
tangent said:
Boston area doesn't "need" to do any infrastructure expansions. ...to support the existing economy and existing population and existing settlement patterns we "need" to maintain the infrastructure we currently have.
Click to expand...


i would say Boston doesn't need to do any outlandish infrastructure expansions.

We should focus on maintaining, optimizing & streamlining what we have.

Do that and work with Amazon, and we'll be in the elite final 4 or 5.
 
Last edited:
Status
Not open for further replies.

Back
Top