Cities woo Ama­zon af­ter on­line gi­ant dumps New York

The Tribune (SLO) - - News/obituaries - BY MIKE CATALINI

Ama­zon’s breakup with New York was still fresh when other cities started send­ing their own valen­tines to the on­line gi­ant.

Of­fi­cials in Ne­wark, New Jer­sey, one of the 18 fi­nal­ists that Ama­zon re­jected in Novem­ber when it an­nounced plans to put its new head­quar­ters in New York and north­ern Vir­ginia, sent a gi­ant heart that read, “NJ & Ne­wark Still Love U, Ama­zon!”

Rep­re­sen­ta­tives of other jilted suit­ors, such as Chicago and subur­ban Mary­land, tried to get Ama­zon’s at­ten­tion and say they’re still in­ter­ested in a re­la­tion­ship, too.

The love notes came even though Ama­zon said it doesn’t plan to pick a new city to re­place New York, where the HQ2 project was sup­posed to pro­duce 25,000 jobs. In­stead, the com­pany said it will spread some of those jobs around at other Ama­zon sites in the U.S. and Canada and ex­pand its ex­ist­ing New York of­fices.

But why woo a com­pany that says it’s not in­ter­ested?

For one, the al­lure of po­ten­tial jobs is just too much to pass up for many politi­cians, said Nathan Jensen, a Univer­sity of Texas gov­ern­ment pro­fes­sor who has crit­i­cized how eco­nomic de­vel­op­ment in­cen­tives are used.

And even if Ama­zon spurns them, this is a lowrisk way for politi­cians to show they are look­ing out for their con­stituents.

“The ‘los­ing’ cities can con­tinue to pub­licly talk about every­thing they are do­ing for HQ2 even if they know they don’t have a shot. If they know HQ2 isn’t com­ing, there is no real cost to do­ing this,” Jensen said.

More than 230 mu­nic­i­pal­i­ties in North Amer­ica com­peted for HQ2, tak­ing part in a month­s­long bid- ding war that Ama­zon ea­gerly fo­mented. Cities of­fered bil­lions in in­duce­ments. In New Jer­sey, state and lo­cal gov­ern­ments put $ 7 bil­lion in in­cen­tives on the ta­ble as part of the Ne­wark bid.

New York ul­ti­mately won the com­pe­ti­tion by promis­ing nearly $3 bil­lion in tax breaks and grants in ad­di­tion to ac­cess to the na­tion’s me­dia and fi­nan­cial cap­i­tal and its ed­u­cated work­force. But on Valen­tine’s Day, Ama­zon abruptly can­celed the project af­ter run­ning into fierce op­po­si­tion to those in­cen­tives from law­mak­ers and po­lit­i­cal ac­tivists on the left.

That shows that the com­pany cared lit­tle about get­ting com­mu­nity in­put, said Richard Florida, an eco­nomic de­vel­op­ment ex­pert.

“Af­ter search­ing across 200 plus com­mu­ni­ties and iden­ti­fy­ing NY (and greater DC) as the places it needed to be, it pulls out as soon as lo­cal res­i­dents and politi­cians ques­tion the bil­lions in in­cen­tives it does not need and asks it do more for the com­mu­nity,” Florida said in an email.

Florida and Jensen pre­dicted some cities will now be­gin to push back when com­pa­nies seek tax sub­si­dies. But Greg LeRoy, ex­ec­u­tive di­rec­tor of the non­par­ti­san think tank Good Jobs First, said there is lit­tle like­li­hood that will hap­pen any­time soon.

“Look, this is deeply learned be­hav­ior,” LeRoy said. “There’s an 80-plusyear his­tory to this taxbreak-in­dus­trial com­plex.”

In the mean­time, the mayor of War­ren, Michi­gan, posted on­line about his town be­ing avail­able. Up­state New York cities, like Rochester, made it clear they, too, are open for busi­ness.

“Nas­sau County wel­comes your in­vest­ment and would like to dis­cuss sit­ing your project here,” state Sen. Todd Kamin­sky, a Long Is­land Demo­crat, told the com­pany.

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