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Cities are begging for Amazon's new headquarters and it's sad

Cities across the country are offering tax breaks and lavish perks to win Amazon's second, supplemental headquarters.

by Noah Kulwin
Oct 19 2017, 10:44am

New Jersey wants to give Amazon $7 billion in tax breaks. The tiny town of Stonecrest is offering to change its name to “Amazon, Georgia.” The cities of Buffalo and Rochester are reportedly pitching Buffalo’s tallest building, the Seneca One tower, with over a million square feet of office space. Tucson business leaders, not to be outdone, sent Jeff Bezos a 21-foot saguaro cactus, and New York City Mayor Bill de Blasio said that landmarks like the Empire State Building would turn orange in a temporary show of support for the city’s bid.

These cities, and dozens of others across the country, are all vying to be the place where Amazon sets up its second, supplemental headquarters. After more than two decades of concentrating its offices in Seattle — and dominating the local economy — the digital-commerce giant announced in September that it would be accepting proposals for where to locate its “HQ2.”

The deadline for the proposals is today — October 19 — and the desperation for Amazon’s 50,000 promised jobs and $5 billion of investment is being felt across the country. Roughly a third of people in Buffalo and Rochester, for example, live below the poverty line (according to U.S. Census figures), as do about 30 percent of people in New Jersey’s bid city, Newark.

But landing Amazon’s new headquarters will also bring a separate set of headaches for the city that wins. Bidding cities such as Pittsburgh, Baltimore, and Raleigh, North Carolina, could see housing rental prices increase substantially, according to the apartment search service Apartment List. And some experts suggest that the massive tax breaks and subsidies being offered to Amazon could substantially mitigate the economic benefit its presence would provide — akin to the billions of dollars in taxpayer money routinely doled out for sports stadiums.

Amazon, in its official RFP for the second headquarters, says that a “stable and business-friendly environment and tax structure will be high-priority considerations for the Project.”

“If they choose to come to Missouri, to me that would almost imply that we ended up being the biggest sucker among the 50 states,” University of Missouri economist Saku Aura told a local news affiliate about St. Louis and Kansas City’s proposals to Amazon.

This doesn’t appear to dissuade cities and states from bidding, however. They are continuing to put out YouTube videos, real estate and tax giveaways, and stunts intended to go viral.

Amazon, however, will probably care more about what cities do for its pocketbook than anything else. Top executive Jeff Wilke told an interviewer last week that stunts won’t have much of an impact on Amazon’s ultimate decision.