Amazon cancels plans for HQ2 in new york

[mhays]

Originally Posted by Crawford

I think we're missing something with Amazon. I have no idea what it is, but the public is missing some piece of the narrative.

They supposedly got cold feet about NYC because there was some opposition, but any idiot knows that getting anything done in NYC is controversial. They actually faced surprisingly limited resistance. You could hand out $1 million no strings attached to every household and 30% of the population would object.

Now they're cancelling towers in Seattle after Seattle rolled over and removed any potentially objectionable taxes. What's going on here?

Cancelling? No, they said they'd sublease the big tower that's currently rising in Seattle.

Meanwhile they're 2.3 million square feet a short walk away, including a building that started this fall.

[edale]

From the article linked a few posts up:

"The e-commerce giant is cancelling a 722,000-square-foot lease for the entirety of Wright Runstad & Company’s 58-story Rainier Square tower, currently under construction, according to the Seattle Times. Last year Amazon threatened to pull the plug on the lease if the city passed a proposed business tax, which it ultimately did not."

[DCReid]

Originally Posted by edale

From the article linked a few posts up:

"The e-commerce giant is cancelling a 722,000-square-foot lease for the entirety of Wright Runstad & Company’s 58-story Rainier Square tower, currently under construction, according to the Seattle Times. Last year Amazon threatened to pull the plug on the lease if the city passed a proposed business tax, which it ultimately did not."

No company grows rapidly forever. They may be taking a pause with leasing with a hope that a new area for rapid growth will be found in a few years.

[mhays]

Then the Times article is wrong. The local business press is reporting that Amazon will sublease the space. Here's the Seattle Daily Journal of Commerce with the correct story, which says: "In a statement, Amazon said it is always evaluating its space requirements and intends to sublease Rainier Square based on current plans." https://www.djc.com/news/re/12119516.html

FYI, a lease is a pretty solid thing unless you pay heavily for an escape clause.

[suburbanite]

You can't just cancel an executed lease. It's a binding agreement.

If they're taking the space to the sublease market that's completely different. The financial impact to the Landlord is negligible, and the effect on the city shouldn't be too drastic unless they plan on completely eliminating the jobs intended for that tower.

[Crawford]

Of course Amazon (or anyone) can cancel a lease. A lease can be cancelled at any time, for any reason, as long as both parties agree.

And lease agreements often have termination clauses, where the tenant pays some predetermined sum.

[Pedestrian]

Amazon to Launch New Grocery-Store Business
By Esther Fung and Heather Haddon
Updated March 1, 2019 7:08 p.m. ET

Amazon.com Inc. is planning to open dozens of grocery stores in several major U.S. cities, according to people familiar with the matter, as the retail giant looks to broaden its reach in the food business and touch more aspects of consumers’ lives.

The company plans to open its first outlet, in Los Angeles, as early as the end of the year, one person said. Amazon has already signed leases for at least two other grocery locations with openings planned for early next year, this person said, without saying where those stores would be.

Additional talks are under way for Amazon grocery stores in San Francisco, Seattle, Chicago, Washington, D.C., and Philadelphia, the people familiar with the matter said.

The new stores would be distinct from the company’s upscale Whole Foods Market chain. It isn’t clear whether the new stores would carry the Amazon name . . . .

Amazon is also exploring purchasing regional grocery chains with about a dozen stores under operation, one person said, that could bolster the new chain . . . .

The new stores aren’t intended to compete directly with the more upscale Whole Foods stores and will offer a different variety of products, at a lower price point, these people said. Whole Foods doesn’t sell products with artificial flavors, colors, preservatives and sweeteners, among other quality standards . . . .

For its new stores, Amazon is targeting new developments and occupied stores with leases ending soon. It could, for instance, consider a portion of a vacated Kmart, a person familiar with the matter said. Stores in the new grocery brand could be in strip centers as well as open-air shopping centers, the people said, and will be about 35,000 square feet, smaller than the typical 60,000-square-foot supermarket.

Amazon doesn’t want restrictions on the type of goods it may sell at its stores and wants the ability to change the store and sell health and beauty products for instance, the people familiar said. Leases in shopping centers often include limitations so that businesses complement rather than cannibalize each other.

It is unclear whether these new stores will be cashierless, but they will be heavily tilted to customer service and pickup capabilities, according to the people. Amazon is also looking to have some control over the attached parking lot to speed shoppers’ ability to get groceries, the people said . . . .

https://www.wsj.com/articles/amazon-...d=hp_lead_pos1

One wonders why Amazon seems fixated on the low margin gorcery business rather than high margin businesses like Amazon Web Services. The difference is so vast, in fact, that it seems more and more likely they will eventually break up the company into a tech portion and a retail portion. It has even been speculated that's why the wanted a new "headquarters"--one for each portion.

[suburbanite]

Both parties agreeing is the key point. If the Landlord was relying on Amazon's anchor tenancy to secure financing and begin construction no way in hell they're letting them walk away, hence the sublease.

A typical termination buyout would consist of the unamortized portion of the improvement allowance given to the tenant and some extra penalty like 3 months of rent. In the case of trying to terminate before the building is even finished, the cost to make the Landlord whole would be astronomical.

[mhays]

Originally Posted by Crawford

Of course Amazon (or anyone) can cancel a lease. A lease can be cancelled at any time, for any reason, as long as both parties agree.

And lease agreements often have termination clauses, where the tenant pays some predetermined sum.

Sure, it's just typically more expensive in net present value than fulfilling the original lease.

[mrnyc]

sooo it comes out -- how 'bout dat cleveland bid!

it seems nyc wasnt the only one throwing around mega huge incentives -- much bigger than we all even suspected i think -- $3.5B here --


Cleveland’s bid for Amazon offered prime downtown real estate and unprecedented city and county tax breaks

Updated Mar 10, 6:21 PM; Posted Mar 9, 2019

CLEVELAND, Ohio -- To entice the world’s largest online retailer to build its second headquarters here, the region’s leaders offered Amazon access to a patchwork of downtown and waterfront real estate that would have embedded the company throughout the core of the city and likely changed its look and feel.

The proposal, made public for the first time this week, also dangled unprecedented financial incentives worth up to $3.5 billion that included the City of Cleveland and Cuyahoga County giving Amazon much of the new income and property taxes generated by the project.


more:
https://www.cleveland.com/news/2019/...ax-breaks.html

[the urban politician]

I told Amazon I'd pay them $100 if they built a HQ in my basement

I've got a couch, weights and a bench, a fridge full of beer, and a TV

[Sun Belt]

Originally Posted by the urban politician

I told Amazon I'd pay them $100 if they built a HQ in my basement

I've got a couch, weights and a bench, a fridge full of beer, and a TV

$100 won't even get you a Prime membership these days!

[montréaliste]

Just like I said it would be. Jeff Bezos' wife stands to get 36 billion from the divorce settlement. How does that fare compared to the promise of thousands of high paid jobs over the next ten years on Amazon's additional payroll?

[10023]

Originally Posted by montréaliste

Just like I said it would be. Jeff Bezos' wife stands to get 36 billion from the divorce settlement. How does that fare compared to the promise of thousands of high paid jobs over the next ten years on Amazon's additional payroll?

How are those two things related? Amazon isn’t paying her settlement.

[montréaliste]

Originally Posted by 10023

How are those two things related? Amazon isn’t paying her settlement.

Don't get your socks all tangled.
They are only related because I decided to relate the two facts.

One; the promise of a 10 or 20 billion payroll over 10 years and the other, a massive 36 billion for one individual.

[Sun Belt]

Originally Posted by montréaliste

Jeff Bezos' wife stands to get 36 billion from the divorce settlement.

That's it?

Jeff got off easy!

[iheartthed]

Originally Posted by montréaliste

Don't get your socks all tangled.
They are only related because I decided to relate the two facts.

One; the promise of a 10 or 20 billion payroll over 10 years and the other, a massive 36 billion for one individual.

It's not a payout. She's not cashing out her equity in the company. And Jeff is retaining voting control over her shares in the company, so nothing will change in the decision-making.

[10023]

Originally Posted by montréaliste

Don't get your socks all tangled.
They are only related because I decided to relate the two facts.

One; the promise of a 10 or 20 billion payroll over 10 years and the other, a massive 36 billion for one individual.

As I said, they are not related.

[JManc]

Originally Posted by Sun Belt

That's it?

Jeff got off easy!

She walked away with almost $40 billion. She probably wasn't out for half in the first place; that was media speculation. She turned over her stake in the WaPo, Blue Origin over to him and both sides were probably amicable about the whole thing.

[montréaliste]

Originally Posted by 10023

As I said, they are not related.

I'm pointing out that one person is making more money out of Amazon than tens of thousands highly paid workers for many years to come is all I am saying. Period. I am right and righteous to be right about it. Nah, not really.