Newark and Amazon HQ2 probably not perfect together

Today is the deadline for locations to submit their proposals to Amazon for its $5 billion second headquarters site. This seeming bonanza has so excited municipalities and states that many across the US and Canada are  trying to lure Amazon to their locales. Newark is in the running but facing tough competition from other locations rated by Moody’s as more likely to succeed. We have a chance, but….

Let’s start with New Jersey’s process. The New Jersey Partnership for Action (PFA) announced its plan to submit a response on behalf of the state, and it requested proposals from interested parties. The PFA is led by LG Kim Guadagno. PFA submitted the proposals to Chris Christie, who always wants to be the boss, and he selected only one location, Newark.

In NY, for instance, NYC submitted four proposals and the state another four proposals. We might have been better off having the state submit multiple proposals for other interested metropolitan areas like Jersey City and New Brunswick, each of which has certain advantages. Theoretically other NJ sites could still have submitted their own plans. However, without the state’s imprimatur they were discouraged from doing so.

The financial-services arm of Moody’s looked at what Amazon may want in a city to come up with a list of the best candidates for HQ2. #1 was Austin Texas. In the Northeast, a likely region for selection, #6 was New York City / New Jersey / White Plain New York. Ahead of us were: #5: Pittsburgh, #4 Rochester NY, and #3 Philadelphia. So we are in the running but facing others in the Northeast that are ranked higher.

Christie is offering $5 billion in state tax incentives and Newark would provide an additional $2 billion. The total of $ 7 billion, or $140,000 for each job Amazon is promising, is possibly the highest of all the contenders. Unfortunately Christie has had poor results in his tax subsidies/incentives so far – too much money for too little results. The same could easily turn out to be the case with HQ2 which projects 50,000 new jobs, plus, other general economic benefits for our area. Even if Newark were to win, the high cost to tax payers could exceed the benefits and deprive us from funds that could have been better spent.


  • Christie’s big dollar offer: Regardless of whether Christie is offering too much, Fortune magazine says it is “likely that the big dollars that Amazon has asked for will be a major deciding factor in its location.” Christie’s offer of much largesse could be just what Amazon is looking for. On the other end of the spectrum is NYC’s proposal which promises more advantages but is not offering special subsidies.
  • General Advantages: Newark offers proximity to NYC, an extensive transportation network of trains, planes and automobiles, surrounded by highways, six colleges and universities, prime office space, and new apartments downtown far less expensive than housing in NYC or even Jersey City.
  • Amazon’s existing presence: It already has in NJ several warehouse/distribution centers that employ 5,500 workers, at substantially lower wages than are being promised for HQ2. Amazon announced it would open two more centers in NJ adding 2,000 full-time jobs. 


MY TAKE ON THIS: In roulette if you put all your money on just one number you can win big, but putting smaller sums of money on different numbers is likely to be more successful in the long run even if less lucrative for each bet. 

  • In retrospect encouraging more NJ metro areas to participate with the state’s blessing would have been wiser – more bets.
  • For a longer-term point-of-view our new governor should certainly not be relying on Amazon to be our savior, but instead be making smart bets on numerous other smaller ventures that might benefit our economy.
  • If Amazon’s overriding concern is big dollar incentives then Newark might come out on top. More likely, however, is than in weighing incentives, financial/regulatory environment, labor pool, and amenities we will end up behind other locations.

Comment (1)

  1. Bill Orr (Post author)

    The freeholder board and City of Camden submitted a 197-page proposal Thursday touting the city’s moxie and grit


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