Stung by Amazon’s rejection, cities look on the bright side
Sometimes losing is winning.
Or at least that’s what some of the 18 North American cities passed up by Amazon for its new headquarters are telling themselves.
After 14 agonizing months of wooing and then waiting for the online retail giant to make up its mind, the finalists learned that instead of Amazon picking one location for its new offices, it would split them between Long Island City in Queens, New York, and Arlington, Virginia, in suburban Washington, sending an estimated 25,000 jobs to each.
The places that didn’t make the cut are bearing the rejection with a mixture of reflection, disappointment and some optimism. But while they’re missing out on the economic boost – for now – they’ve also dodged having to give away billions of dollars in tax incentives.
Amazon’s search for a new home resulted in some 238 suitors from across the continent that the company in January whittled down to 20, stretching from Toronto to Miami in the east to Denver and Los Angeles out west.
The prospect of new jobs and the cachet that comes with a tech behemoth like Amazon led many cities to pull together aggressive tax incentive packages worth billions of dollars, among other enticements.
Newark, New Jersey, for instance, proposed $2 billion in tax incentives, along with a potential $5 billion put up by the state.
“I think considering the size of the tax package we were offering, I think a lot of taxpayers are taking a sigh of relief,” said Brandon McKoy, who heads government and public affairs at the progressive think tank New Jersey Policy Perspective. “It was very exorbitant.”
The other finalists were: Atlanta; Austin; Boston; Chicago; Dallas; Denver; Indianapolis; Montgomery County, Maryland; Nashville; Pittsburgh; Raleigh, North Carolina; and Washington.
Some economic development experts argue that giving up billions in tax revenue through incentive programs was a flawed mindset from the start.
Richard Florida, an urban development expert at the University of Toronto, cast Amazon’s search in stark terms, suggesting the company “played” cities against each other to get the best deal, while also scoping out potential future locations for business hubs.
He compared the selection process to the televised talent competition, “American Idol.”
“We can get back to doing economic development the right way, not through these Amazon Idol competitions,” he said.
New York offered Amazon more than $1.5 billion in tax credits and other incentives while Virginia and Arlington ponied up about $573 million.
But the tax incentives were not the only factor for Amazon. Indeed, the chosen sites had offered less than other places. Amazon has said it picked locations best suited to attract the high-skilled workers it’s seeking.
That’s small consolation to places left to soul-search what they could have done differently.
“We competed hard, we competed well, but we did not succeed,” said Dallas Mayor Mike Rawlings, whose city was a contender. “It calls upon us, as leaders in this city, to look hard at ourselves and say, ‘Why can we not beat New York City and Washington, D.C.?” Others cast the loss in a positive light. “It put Philadelphia in the national (and international) spotlight — increasing our visibility to other companies and showing our viability for other largescale projects,” said Philadelphia Mayor Jim Kenney in a statement.
For all the time and energy expended on the process, there’s also a sense of relief to finally be done with it, even if the outcome for most wasn’t as hoped.
“I’m glad it’s over,” said Newark Mayor Ras Baraka. “It’s just a lot of anxiety, a lot of waiting.”