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Foss: State's Amazon deal warranted scrutiny

Foss: State's Amazon deal warranted scrutiny

Foss: State's Amazon deal warranted scrutiny
Protests against Amazon's second headquarters took place at an Amazon store in New York, Nov. 26.
Photographer: Jeenah Moon/New York Time

On the same day Amazon announced that, no, it won't be building a second headquarters in New York City after all, I found myself reading about General Electric. 

It was just a few years ago that Massachusetts scored what appeared to be a major economic development coup, luring GE to Boston with a $150 million incentive package.  

Things haven't worked out as planned, to put it mildly. 

Last week the struggling company announced that it will sell the parcel of land where its new Boston headquarters was supposed to go, and reimburse $87 million in state money used to acquire and prep the property. 

This latest twist in the ongoing GE saga is just another reminder that the incentives states use to attract businesses don't always live up to the hype. 

There are countless examples of companies that received generous government subsidies but failed to produce the jobs they promised or make promised investments. 

One of the bigger boondoggles in recent memory is Wisconsin's decision to award the Taiwan-based electronics company Foxconn $4 billion in subsidies to build a massive new facility that would employ 13,000 people. These lofty plans have since been scaled back, and the promised jobs seem unlikely to materialize. 

I don't know what Amazon would or wouldn't have done had it built a second headquarters in New York City, and perhaps the $3 billion in incentives offered by the state would one day have seemed like a great deal, though I have my doubts. 

What I do know is that, given their spotty track record, these deals shouldn't be above scrutiny or criticism. 

New Yorkers are right to object to the lack of transparency, accountability and public involvement that characterized the state's effort to bring Amazon to New York City, and to ask whether the cost would have been worth it. 

In all likelihood, it wouldn't have been. 

In an essay titled, "Handing Out Tax Breaks to Businesses is Worst Than Useless," the writer and urban theorist Richard Florida makes the case that our current approach to economic development is hugely wasteful. 

States, Florida writes, "shell out too much money up front. They front-load incentives, instead of watching how businesses that are getting the incentives perform over time. Companies are able to take the incentives and can be slow to deliver on jobs or follow on investments, or in some cases just pull up shop altogether. ... Basically, states hand over the money to companies and then do not even follow up to see if they are working or not." 

Whether the uproar over New York's incentives for Amazon sparks a larger movement to reform our broken system of economic development remains to be seen.

But it should. 

There's a better way to do things -- one that takes the concerns of residents into consideration and treating the community as a partner, rather than an irritation to be subdued and overcome. 

Amazon had little interest in addressing the questions raised by its opponents, opting to scrap its plan to build in Queens rather than deal with these perfectly valid concerns. 

This "my way or the highway" approach doesn't reflect favorably on Amazon CEO Jeff Bezos, suggesting that in addition to being the richest man on earth he might also be the most thin-skinned. 

Certainly, it wouldn't have taken much for him to convince people the company was acting in good faith -- to demonstrate some concern about Amazon's impact on housing prices, homelessness or New York City's already overburdened public transportation system. 

Of course, state leaders, from Gov. Andrew Cuomo on down, could have done more to make the case that Amazon's presence would have been good for New York.

But they didn't, and were ill-prepared to do anything other than lash out at their opponents when the deal fell apart in such shocking and unexpected fashion. 

If the Amazon saga has one lesson, it's that it's no longer enough to entice a big business to your community. You also need to justify the expense, and explain how the average person will benefit.

Neither Bezos nor Cuomo did this, and it's ultimately what doomed Amazon's plans for New York. 

Reach Gazette columnist Sara Foss at [email protected]. Opinions expressed here are her own and not necessarily the newspaper’s.

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