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Foss: Can New York land Amazon?

Foss: Can New York land Amazon?

There's something unseemly about frenzy set off by headquarters competition
Foss: Can New York land Amazon?
The Amazon Apollo building in Seattle on Dec. 7, 2016.
Photographer: David Ryder/The New York Times

Here's a question we'll hear more people asking in the months to come: Can New York land Amazon's second headquarters

The short answer is: probably not. 

After all, it's not as if Amazon doesn't have options. 

The technology company has announced a public competition for its second headquarters, and is accepting proposals from all over North America. 

North America is a big place, with no shortage of communities that would love to become home to a $5 billion facility that will eventually employ up to 50,000 workers. Why would New York, with its high taxes and regulatory burden, attract the attention of Amazon, a company famously averse to both taxes and regulations? 

The longer, more nuanced answer has to do with New York's history of bending over backwards to accommodate big corporations. 

It's safe to assume that officials are perfectly happy to give Amazon whatever it wants, and that communities that wish to be taken seriously will include generous taxpayer-supported incentives in their proposals. 

Frankly, I wouldn't be surprised to see public officials offer to sacrifice their first-born children, if they thought it would give them an edge in the Amazon sweepstakes. 

Amazon already has some idea of what to expect from New York, given that last month the company announced that it would build a brand-new 359,000-square-foot office in New York City. 

Unsurprisingly, this announcement included another announcement: that the company would receive $20 million in tax credits from the state's Excelsior Jobs Program. That's pretty generous, and it will look like peanuts compared to the incentives public officials will offer for building a facility expected to employ 25 times as many people. 

There's clearly a cost to doing business with Amazon. 

But that hasn't stopped officials from New York City, Buffalo, Westchester County and the Capital Region from expressing interest in bidding for Amazon's second headquarters. 

Their attitude was perhaps best summed up by Andrew Kennedy, the CEO of the Center for Economic Growth in Albany, who told the Albany Times Union, "This is something that we need to do. It's a great opportunity — it's Amazon." 

Now, you can't fault Amazon for expecting cities and states to roll out the red carpet for the company, given how routinely taxpayer-subsidized packages are doled out in the name of economic development. 

But there's something unseemly about the frenzy set off by Amazon's headquarters competition. 

The desire for jobs and investment is perfectly understandable, but the jobs and investment offered by Amazon come with big, expensive strings attached. 

In an essay that I expect will be heeded by exactly no one, Greg LeRoy, the executive director of Good Jobs First, which tracks government subsidies, urges public officials to think carefully before offering costly tax breaks to one of the most successful companies in the world. 

"Because Amazon has chosen to stage this auction publicly (a rare event, see also Tesla Motors and Boeing), public officials should feel emboldened to break out of the 'prisoners dilemma' narrative that usually inhibits them," LeRoy writes. "That is: Since one can easily determine who else is competing for the deal (mayors are tweeting!), and the company's criteria are public knowledge, why shouldn't governments communicate and cooperate to avoid getting fleeced?" 

It's a good question — but it's also far too sensible to gain much traction. 

Governments don't mind getting fleeced, if it's in the name of economic development and if the prize is a big fish like Amazon.

They see no other way to retain and lure businesses, even as an increasing number of reports and studies suggest that companies given generous taxpayer-financed subsidies seldom deliver on their promises. 

In any case, the deadline for submitting proposals to Amazon is Oct. 19. 

I wouldn't bet on New York. 

But I wouldn't bet against it, either. 

Reach Sara Foss at [email protected]. Opinions expressed here are her own and not necessarily the newspaper's. Her blog is at https://dailygazette.com/blogs/thinking-it-through.

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