Cities' Offers For Amazon Base Are Secrets Even To Many City Leaders (nytimes.com)

The location for Amazon's second headquarters is shrouded in secrecy, so much so that many city leaders are unaware of the financial incentives their cities used to entice Amazon (Warning: source may be paywalled; alternative source). The New York Times reports: Across the country, the search for HQ2, as the project has been nicknamed, is shrouded in secrecy. Even civic leaders can't find out what sort of tax credits and other inducements have been promised to Amazon. And there is a growing legal push to find out, because taxpayers could get saddled with a huge bill and have little chance to stop it. A primary reason for the information blackout is that, in many cases, the bids were handled by local private Chamber of Commerce affiliates or economic development groups that aren't required to make their negotiations public. Many of the groups are also not covered by Freedom of Information Act or state open-records requests.

But another reason is gamesmanship. Some cities say they want their Amazon proposals to remain confidential to avoid showing their hand to rivals. And Amazon required the finalists to sign nondisclosure agreements that forbid the local groups to release proprietary information about the company. With so much secrecy -- and bids like Austin's that involve unelected officials making promises -- there is the risk that taxpayers and their civic leaders will be forced to accept the proposed terms or live with turning down an enormously lucrative opportunity. Amazon, which is expected to make $235 billion in revenue this year, promises to bring the winning location up to 50,000 high-paying jobs and a $5 billion investment in construction.

Comments

What else does it promise to bring?

[Anonymous Coward]

...promises to bring the winning location up to 50,000 high-paying jobs and a $5 billion investment in construction.

50,000 additional drivers adding to congestion on the streets and freeways? 50,000 jobs that perhaps need 50,000 more units of housing stock that don't exist yet, and which will drive up housing prices until the gap is closed. You can't build 50,000 houses and apartments overnight.

Hey, don't get me wrong. I'm all for the idea that jobs adding lanes to the freeways will be created. And other jobs building those houses and apartments. And if I lived there I'd love the idea that the value of the home I already own going up (even though it's not worth anything until someone else buys it.) But don't think that all those good things don't come without a lot of bad, or at best neutral, things.

Personally I'm pretty glad that "my city" dropped out of this race to the bottom. If the winning city gives tax concessions that result in the locals paying for all the infrastructure improvements while Amazon and Bezos laugh all the way to the bank then they have my sympathy on one hand, but also my disdain on the other for being so stupid.

If you ask me, the smartest thing all these cities could do would be to walk away, en mass. Let Amazon pick a city based on what it needs and the individual merits of the candidate city. And then the city that "wins" will have the power to say "Okay Amazon, here's what you're going to need to do if you're going to bring 50,000 new jobs into this city.

But they won't.

Re:Olympics

[sniper86]

Or perhaps like Disneyland and Anaheim?

http://www.latimes.com/project...

But those sweet minimum wage jobs...

Re:I doubt they'd bother

[lgw]

in America due to a Supreme Court ruling (Citizens United) political corruption is explicitly legal. Money is speech here

You should actually read the decision, rather than repeating falsehoods. Citizens United said nothing like that. I don't know how that sad meme got started, but it just makes you look foolish to repeat it.

The Citizens United ruling said that closely held corporations have the same rights as partnerships - if a small group of people want to pool their money to engage in political advocacy, it doesn't matter whether they incorporate or not. The First Amendment is pretty clear about the right of the people peaceably to assemble, and to petition the government.

Nothing at all to do with public corporations.

And have you really thought through your "money is speech" rant? Jeff Bezos can buy the Washington Post if he wants his voice to be heard. You can buy an ad in the Post. Do you really want it to be legal for Bezos, but illegal for you? You think that will help?

A Bad Deal for the Community

[Amigori]

If I were running a small to mid-size community, there is NO way I would have bid for HQ2. Why?

1. That's alot of tax dollars in one corporate basket. They will do anything and everything to reduce that as close to zero as possible.
2. Infrastructure costs. Sure the initial construction boom in roads, utilities, housing, and shops is a boon to the community. But long-term costs are never included, and the negotiated tax breaks/incentives will reduce any available cash down the road. Especially when $company packs up and moves one town over for a new round of tax breaks.
3. City Government costs. An influx of 50k people will up the amount of government workers. Fire, Police, Parks, all have overhead costs that are direct costs to the tax-payer. Again, long-term costs.
4. Lower Tier suppliers. Around Detroit and the automotive and manufacturing areas, there is a large manufacturing base of Tier 1, 2, 3, etc. companies. They make components, subcomponents, and tooling, along with maintenance, transportation, and logistics. And that doesn't even include all the service and support companies that workers rely on, i.e. restaurants, gas stations, grocery stores, and so on. A 50k employee HQ2 compound doesn't come close to the same economic impact. Why?
5. The lower Tier companies just aren't there. Some services, janitorial, food prep, etc. Sure there's transport and logistics around Amazon's warehouses, but that's not what we're talking about here.
6. Who buys more groceries, gasoline, autos, housing, household goods, clothing, etc.: 1, $200k salary single person; or 4, $50k salary families?
7. Corporate cafeterias: As noted in a recent Article, local eateries lose business to the Company Store. And potentially any other stores the worker may walk by at lunch.
8. Plus, the usual subjects: traffic, real estate, urban sprawl, schools

I'm certainly not against economic development, but don't become a serf to corporatism.