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'A Major Distraction': Is A Megadeal Like Amazon's HQ2 Always Worth It?
Thursday marks the deadline for bids in Amazon's highly publicized search for the location of its second headquarters, dubbed HQ2. Cities are clamoring to land the conglomerate's project and its unparalleled promise of up to 50,000 jobs paying an average of $100,000, at one of the world's fastest-growing companies.
But with that comes some public soul-searching: How much should a city or state subsidize a wealthy American corporation in exchange for such a shiny promise? [...] Financial incentives are among numerous criteria Amazon included in its solicitation of bids. [...] By multiple estimates, Amazon has already cashed in on more than $1 billion in taxpayer-funded subsidies and incentives for its warehouses, data centers and other operations.
[...] "I often thought, as governor, it would be sort of nice, if all the governors just got together and said, 'Look, we're just not going to play this anymore,' " says former Wisconsin Gov. Jim Doyle. Doyle was at the helm during the financial crisis in 2008, when General Motors shuttered plants, including a factory in Janesville, Wis. But later, the automaker said it would reopen one location, bringing back the jobs. Wisconsin put together its largest incentive package yet — Doyle says he felt an obligation to — but it lost to Michigan's even bigger offer. [...] Since then, Wisconsin has become infamous for its eye-popping $3-billion financial incentive to get a Foxconn liquid-crystal display plant.
Previously: Amazon to Invest $5 Billion in Second HQ Outside of Seattle
Cities Desperate to Become the Location of Amazon's "Second Headquarters"
(Score: 2) by stretch611 on Friday October 20 2017, @10:28AM (3 children)
However, even if it does pull in 50,000 workers, how many are in that city paying taxes and how many will commute.
How many people will bag lunch vs how many will buy locally and pay sales taxes.
How many people will actually move to the area instead of just changing to a new job. Even if people do move to the area, the reason why they pay taxes (or at least what should be the idea) is the fact that the city/county/state supports them with services like fire/police/public transportation. The job location also has to have that support as well. Not to mention any road upgrades that the city needs to pay for in order to support the new location and mitigate the traffic.
The city may look like it will make some money... but the amount is only a small fraction of what it looks like on paper, if any money is made at all once you deduct the price that they whore out to Amazon or any other big company.
Now with 5 covid vaccine shots/boosters altering my DNA :P
(Score: 2) by JoeMerchant on Friday October 20 2017, @02:05PM (1 child)
Smart accountants will project all that, if they're smart enough they'll get somewhere close to reality, and these are the numbers the deal is decided on - by both sides.
Meanwhile, what hits the negotiation table are skewed projections either hyping the deal for how great it could be, or all doom and gloom like you are pointing out - and they argue back and forth, and they leak stuff to the press to try to sway public opinion, and in the end it's about the corporation vs the politicians - once the politicians think it is in their own best interests to take the deal, it is done.
I hope you chose your politicians well.
🌻🌻 [google.com]
(Score: 2) by stretch611 on Friday October 20 2017, @02:18PM
Look at the US Congress... need I say more?
Now with 5 covid vaccine shots/boosters altering my DNA :P
(Score: 1) by khallow on Friday October 20 2017, @02:34PM
Let us note that 5% is a small fraction.