Amazon's Big 'HQ2' Decision and the Difficulties Ahead for NYC, Arlington
*By Carlo Versano*
In the end, it was all about the talent.
Amazon this week chose the talent pools of the D.C. and New York metro areas to base its split "HQ2" expansion after a year-long search during which city officials from across the country begged the e-commerce giant for the high-tech, highly-paid jobs they hoped might be a boon for economic development.
The irony: the company will be bringing as many as 50,000 of those jobs to areas that can barely serve the residents, workers, and commuters they already have.
The Big Apple is already facing a dual crisis of a lack of affordable housing and a chronically underfunded, rapidly-decaying subway system.
On Thursday, the MTA, the state-run agency that operates public transit in New York, presented options for a cocktail of fare and toll hikes that it said would be needed to fill holes in a budget gap. That's apart from the $40 billion or more the agency requires to undertake the costly repairs needed to modernize the system.
The idea of adding 25,000 new commuters to a neighborhood served primarily by one of the most [overcrowded](https://ny.curbed.com/2018/9/19/17871828/hudson-yards-new-york-subway-bus-capacity) lines in the system is already causing anxiety among current residents of Long Island City.
At the same time the MTA struggles to stay operational, New York State is giving Amazon more than $1.5 billion in taxpayer-funded incentives, which works out to about $48,000 per job. That's in addition to $1 billion in potential city tax credits, and a federal tax break, since Long Island City is considered a distressed "opportunity zone" in the new tax law, despite having a median income far above the national average.
In the suburbs of Washington, where traffic congestion is already among the worst in the nation, an affordable housing crisis has been building for years. Rising rents and home prices in cities like Arlington, which will be home to one of the new Amazon ($AMZN) hubs, have forced lower and moderate-income residents further from the city (and thus lengthening commute times and worsening traffic).
Millennials who work in D.C. and have been saving to buy their first homes will almost certainly be among the first to feel the pinch. One Arlington condo jumped in price by $20,000 [overnight](https://www.washingtonpost.com/business/economy/northern-virginia-property-owners-are-delighted-amazon-hq2-will-be-moving-in-renters-first-time-buyers-and-low-income-residents-arent/2018/11/13/47307aba-e457-11e8-b759-3d88a5ce9e19_story.html?utm_term=.7323202f5f1a) when the Amazon decision was first reported.
This sense that Amazon played into an already raging debate over income inequality in America was the basis for the protests that erupted in Queens following the announcement, led in part by Representative-elect Alexandria Ocasio-Cortez, who castigated the governor and mayor for what she says amounts to taxpayers paying Amazon to hasten gentrification and worsen the housing crisis ー all for the flimsy return of "economic development."
Meanwhile, on the other side of the East River, Alphabet's Google ($GOOGL) is quietly doubling its own New York City footprint with a massive [new real-estate deal](https://www.wsj.com/articles/google-plans-large-new-york-city-expansion-1541636579) in the works. A deal that Google says it will make without subsidies ー or the promise of a [helipad](https://d39w7f4ix9f5s9.cloudfront.net/4d/db/a54a9d6c4312bb171598d0b2134c/new-york-agreement.pdf).
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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