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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 JoeMerchant on Friday October 20 2017, @01:55PM
It's a negotiated open/free-market deal ergo: In an ideal market net benefits to the host city should be near zero. The competing cities should be somewhat cautious about risk points in the deal, and that caution amounts to the net benefit to the city in the future. If a city takes too much risk, the deal could end up being a net expense to the city.
The sure thing about HQ2 is that it will represent commercial growth: air traffic, truck traffic, at least some jobs, tax income if it's not all negotiated away but also expenses for increased road capacity, police, fire, utilities, etc.
It would be nice if they would hire 10,000 AI developers each earning $200K per year, but that's not guaranteed. It's nice to talk about win-win scenarios, but in the end the city has to weigh its own interests against anticipated benefits of hosting, and offer incentives commensurate with those benefits.
🌻🌻 [google.com]