CommentsPERSPECTIVE-Tech giant Amazon.com is considering the City of Los Angeles for its second North American headquarters, which could eventually employ 50,000 people.
One of Amazon’s concerns in making its choice is the possibility of increasing the cost of housing in the chosen area. However, as Mayor Garcetti explained in an interview with Bloomberg, “We can absorb those many jobs without being blamed for high rents.”
So, I take that to mean that since our rents are already astronomic, then Amazon should not be concerned having any effect on them.
It appears our Mayor is offering three sites to Amazon: two in downtown Los Angeles and one at Warner Center in Woodland Hills. The bid also offers six other sites in Los Angeles County, according to the Los Angeles County Economic Development Corp.
How much is Mayor Garcetti really selling LA for, and at what cost to the stakeholders? Let’s pick this idea apart and put it back together. Every city needs to create new jobs, but what would this do to the established businesses in Los Angeles?
PROS
- California is one of the most innovative tech hubs in America and Los Angeles has its share of professionals in STEM fields (science, technology, engineering and math).
- Los Angeles has a major port which is ideal for companies in general business and/or hi-tech corporations.
- Downtown Los Angeles is approximately 45 minutes from an international airport.
- Having Amazon would potentially create much-needed jobs for Angelenos.
CONS
- Local businesses might see costs rise slightly; the price of an office lease could rise nearly 3 percent in 10 years, and retailers might expect to pay just under 2 percent more for storefronts over the same period.
- LA could see an increase in traffic resulting from the expansion of the city’s tech industry.
- There would be prolonged housing construction as a result of an influx of more wealthy stakeholders who are willing to pay for convenience as well as higher rents.
- Gentrification would continue, pushing out low-income and minority communities in favor of a more affluent and wealthy population.
But the big WOW would be the loss in local tax money. By the way, the top contending cities for Amazon are offering BILLIONS OF DOLLARS IN TAX BREAKS in exchange for having Amazon call their city the new home for its second headquarters. Just so we are clear, the net effect on growth is the sum of the (generally positive) effects created by more favorable economic incentives and the (negative) effects created by the increase in the deficit.
Nevertheless, when it comes to the homeless, 2017 has seen a fair amount of real movement from Amazon, a company that casts a long shadow in its home city of Seattle. In 2017, a network of homeless shelters there called Mary’s Place received a package from Amazon. The cardboard box contained a note promising that a new Amazon building in downtown Seattle would also house a new shelter to be run by the nonprofit. The new 200-bed facility scheduled to open in 2020 is supposed to be one of the largest homeless shelters in Seattle. Does this mean that LA will also be a recipient of homelessness gifts from Amazon? It is hard to predict or expect with a mayor who continues to ignore the needs and concerns of the actual citizens of our city. LA is for sale by the mayor and there is no limit to his willingness to sacrifice the well-being of his own dwindling middle class constituents. If chosen, hopefullythe tech giant will continue to address the homelessness issue despite our mayor’s lack of sensitivity to the issue.
(Diedra M. Greenaway, MS/MBA, is a Los Angeles City Budget Advocate and BA Budget Chair for the Department of Economic and Workforce Development. Diedra is a CityWatch contributor.) Edited for CityWatch by Linda Abrams.
