Cities Fight For Chance to Host Amazon’s Second Headquarters
The ongoing spectacle of cities around the country vying to see which can bend over backwards furthest in convincing Amazon to make their friendly climes the company’s second home has reached embarrassing — and likely wildly counterproductive — proportions.
The city on city contest for cushiest sweetheart deal features billions in tax inducements, promises of millions in infrastructure spending, and dozens of mayoral YouTube videos replete with cringe-inducing Alexa jokes.
It seems — at least when it comes to Amazon — the calculus cities traditionally employ when enticing businesses mooting a new facility or a relocation appears to have been jettisoned in favor of a process more befitting “The Bachelor.”
The online retail giant’s second headquarters promises a windfall for the winning city, no doubt: 50,000 jobs, up to $5 billion in long-term investments, and an immediate boost to local tax coffers. And the vague, attainable-seeming criteria laid out by Amazon means nearly any midsize city with an airport could — theoretically — qualify. Indeed, the “low-bar” has encouraged a range of improbable cities to launch equally improbable bids more akin to a prospective summer Olympics hosting than a corporate relocation.
Consider Frisco, TX, a city of 120,000 located about 25 miles north of Dallas, which might as well have offered Amazon the keys to the city planner’s office. “Our city’s only about 60 percent built out,” according to Frisco mayor, Jeff Cheney. “So we’ve got a lot of available land where we can build to suit. We play to win. We’re innovators. We’re forward thinkers, and we’re serious.”
Dallas Cowboys owner Jerry Jones got in on the Frisco effort, too. A video of the garrulous Texas businessman encouraged Amazon owner Jeff Bezos to catch the “Frisco flu” as part of the city’s video pitch.
And Amazon’s search has spawned a wealth of awkward mayoral pitch videos. Creativity, unfortunately, hasn’t been much on display. The imaginative thinkers from Danbury, CT, and Washington DC both dreamed up takes on having their respective mayors ask Alexa what city Amazon should pick. Apparently, Alexa is malfunctioning; she opted for Danbury and D
Or take the collection of local business leaders from Tucson, AZ, who pooled their resources and business acumen to come up with the idea of mailing a 20-foot-tall cactus to Bezos.
“It’s a hardy plant. It can grow up to 40 feet. And that’s Tucson,” Joe Snell, Tucson businessman, offered in explanation for the prickly gift. “We’re a community that’s growing. We’re adaptive. And we’re durable.”
Amazon thanked the city of Tucson, and then returned the cactus.
Or there’s the mayor of Tulsa, who literally told reporters, “Whatever it takes,” when asked if he had concerns about going too far with incentives.
Not to be outdone, Lauren Hitt, head of Philadelphia’s special Amazon outreach team, recently seemed to suggest the city might do away with business taxes altogether if Amazon picks them. “We do have business taxes,” Hitt noted, before cheerfully offering “but that’s something that could be looked at in the scope of Amazon coming here.”
But in terms of outright corporate welfare, Newark, NJ, takes the cake. Legislation signed by recently departed governor Chris Christie promises the Seattle-based company $5 billion in tax incentives, if Amazon would only call “The Brick City” home.
Conspicuously absent each city’s glitzy sales pitch, however, is the chapter on gentrification, soaring housing prices, traffic, and strain on city services that an Amazon headquarters would entail. Indeed, the verdict on whether high-profile incentive-laden deals enticing business development are more boon or drain for victorious cities remains murky, at best.
“Why are they doing this whole dog and pony show? Amazon wants something for nothing,” Matthew Gardner, from the nonpartisan Institute on Taxation and Economic Policy, told the New York Times. “They would like a package of tax incentives for something they were going to do anyway.”
Economist Art Rolnick from the University of Minnesota agrees. “If you look at it from a national perspective, it’s zero returns,” Rolnick explained. “The company wins each time. It’s corporate welfare.”
And while Amazon may seem like a rock-solid, generational bet for the competing cities today, the company is only two-decades-old. The world of online tech and retail is a dynamic, rapidly changing environment.
Going all-in on GM and Ford undoubtedly felt like sure winners for Flint and Detroit, respectively, and one need look no farther for a cautionary tale on the risks posed by tying the fate of a whole city to one company.
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