Amazon’s Bait and Switch Headquarters Competition

When over a year ago Amazon announced that it would look for where to site a second headquarters, it set off a bidding frenzy from 238 cities and regions, even Alaska and Puerto Rico. They offered billions of dollars in tax breaks in return for the 50,000 jobs that Amazon predicted.

Exactly a year ago, we ran a piece called "How Corporate Welfare Fleeces American Cities which you can access by clicking the title. It gave a number of examples, contending that "having outstripped 238 bidders, the Amazon
It's nothing new. This Time
cover dates from November, 1998
winner is apt to be quite a loser...Someday soon we will see a gaggle of politicians somewhere bleeding their town white to be on the stage with Jeff Bezos to announce the Amazon trophy".

What's really stunning about Amazon's announcement that it is splitting its choice between two cities, is that there has been no mention whatever of either Crystal City, Virginia, or Long Island City, New York (part of New York City) halving their offer to match Amazon's halving the job count to 25,000 in each location. Jeff Bezos probably can't believe that the likes of New York Governor Andrew Cuomo and New York City Mayor Bill De Blasio would be fool enough to fall for the con.

For comment, the PBS NewsHour had on Richard Florida, an urban studies theorist and a professor at the University of Toronto's School of Cities. And he had assisted two of the cities formulate their bid. He was asked, "Are the incentives that the cities are offering and the states are offering, is it worth getting the headquarters?" Florida answered,

No, absolutely not. The level of incentives that Governor Christie was talking about [New Jerseys offer while he was still governor], $5 billion, I think — the state of Maryland, I believe, put $7 billion on the table — there's no way that 25,000 or 50,000 jobs are worth that".

Confirming everything we had written in our article of a year ago, Florida continued:

"But why are we going to hand out hundreds of millions or billions to a trillion-dollar company and the world's richest man? That — it was really the thing that galled me on this and many other people, was the way our progressive cities and mayors, our blue cities and mayors, really caved into this competition".

He thinks cities should band together in a nonaggression pact that would put an end to gouging by companies considering moves and sports teams demanding that cities build their stadiums.

"I think HQ2 is a ruse", he went on. His belief is that Amazon wanted to get to know as much as they could about all those locations — at their expense, of course. They wanted to put together the best database on economic development and site selection for logistics, production facilities, and talent. An in fact, Amazon has announced they're putting about 6,000 jobs in some of the 218 cities that didn't make the final 20. So the competitors are getting something for their efforts, but 6,000 jobs spread wide in no way matches what these cities have spent trying to attract Amazon.

Florida said that when Amazon narrowed the list to 20 cities, he picked either Washington, DC, where Bezos has a $32 million mansion, or New York, because it's the country's biggest headquarters city. Proof of ruse: How could Amazon have chosen New York City with its dilapidated and failing subway system?

One or the other was always going to be his choice, Florida said, and it turned out to be both, so "Why put 236 cities through this?" Those presentations cost them a lot of money to analyze and prepare. With the 50,000 jobs split between them, let's watch whether these cities cut their bids in half or whether Bezos will fleece them doubly.