Friday, February 15, 2019 by Chad Swiatecki

Incentives or no, Amazon growing in Austin after nixing New York

The announcement Thursday that Amazon is canceling its planned HQ2 facility in Queens, New York, confirmed what many business and policy watchers in Austin have predicted: In the coming years Austin will see a slice of the 25,000 planned jobs that were supposedly headed to the HQ2 site.

The company said Thursday that it has no plans to reopen the national site search it conducted throughout 2018. Last week when news first broke that the e-commerce giant was considering axing the New York site, a spokesperson for the Austin Chamber of Commerce, which spearheaded the city’s recruiting effort for the HQ2 project, said the group hadn’t had any new discussions with Amazon.

Similarly, last week David Colligan, the city’s director of global business expansion, said there have been no further discussions at City Hall about trying to land the headquarters that had been planned for New York. Colligan also said the city is moving forward with implementing its revised economic incentives programs that are aimed at small businesses and middle-class jobs, in a shift away from offering tax relief for large corporate campuses.

In recent weeks, Amazon has made other waves locally with the news that it plans to occupy 145,000 square feet of office space at an under-construction tower at the Domain in North Austin. The company also operates a fulfillment warehouse in San Marcos that is expected to employ 4,200 people by later this year.

That gradual growth of Amazon jobs in the area without a grand announcement presents Austin with an opportunity, said Paul O’Brien, CEO of the Austin-based MediaTech Ventures startup and a veteran of the Silicon Valley startup scene.

“This presents the best opportunity for Austin as a whole to focus on working together with the goal of pushing the private sector to address the challenges we’re facing on transportation and affordable housing, and become a part of the ecosystem,” he said. “It’s wonderful that we don’t have to put on the whole song-and-dance routine again because the jobs are here already and there are more of them coming. We need to hold them accountable on doing the things necessary to be part of the community.”

Thus far Amazon has not sought city incentives for its projects in Austin. O’Brien said that shows the company feels strongly enough about Austin and the region’s technology talent that a break on property or other taxes makes less of a difference.

He said the company’s growing Austin presence is likely to offer career advancement and other options to workers who get their first middle-class jobs in part because of the city’s shift toward building small businesses and so-called workforce jobs.

“We don’t need to be aggressive with incentives for Amazon because they’re already coming, and the careers that the city is working on growing need places to advance to for those who want to go into higher management,” O’Brien said. “I’m glad the city is going in the new direction with incentives toward workforce development because of all the challenges that there have been here recently in the small-business sector.”

Photo by Robert Scoble made available through a Creative Commons license.

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Key Players & Topics In This Article

Economic Development Incentives: This is shorthand for a series of programs designed to lure business to a given region. In Austin, the program tends to take some form of tax-based incentives. These can include rebates or grants that are often tied to a set of stipulations. These tend to include local hiring goals, same-sex partner benefits, or, more recently, wage floors for construction workers who build facilities for the incoming organizations.

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