And then there were 20.
In January, Amazon announced that they had trimmed the list of potential sites for their second North American headquarters down from 238 proposals to 20 finalist locations.
Amazon has promised to employ 50,000 workers at their new headquarters, and spend an estimated $5 billion in the community.
The remaining 20 sites are: Atlanta; Austin, Texas; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Md.; Nashville; Newark; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh; Toronto; and Washington, D.C.
The promise of 50,000 jobs and billions in new economic development will seem like a dream come true to most of these areas. But as I discussed last October with Greg LeRoy, founder and executive director at Good Jobs First, it’s possible that the community that is selected will end up footing the bill for a large chunk of these improvements through the massive tax incentives they will be pressured to offer in the process of wooing Amazon.
LeRoy, whose organization calculated the average cost of mega business courtship deals like this one from 1996-to-2016 at $658,000 per job, told me back then that tax incentives aren’t usually the deciding factor when a company chooses where to build. But municipalities still heap the incentives in their direction anyway.
I reached out to him to see what he thought about Amazon’s city-by-city beauty contest, and he had a rather surprising suggestion: This is a time for all 20 municipalities to work together.
“This is not your grandparents' site location deal. [The elected officials of the 20 localities] should cooperate and communicate freely with each other, to avoid overspending,” he explained. “To the 20 localities named as remaining contenders, I say: fully disclose your bids right now and invite real public participation to revise them. Your residents need to know if your proposed deal is structured to help them benefit in any way and to shield them from gentrification. “
That’s a sentiment that has recently been echoed by other commentators who’ve formed an online call-to-action.
This week, a petition on Change.org began circulating that asks elected officials and community leaders of the 20 cities to collectively agree that they will not offer Amazon any tax incentives to procure the second headquarters.
The petition was organized by Richard Florida, a professor at the University of Toronto’s Rotman School of Management, in the hopes that the competing cities would withdraw from the bidding war Amazon has set up, and instead, collude to ensure Amazon cannot score big incentives.
According to VentureBeat, the petition’s 93 original signees include Robert Reich, former U.S. Secretary of Labor under President Bill Clinton; and Jason Furman and Alan Krueger, both former chairs of the president’s Council of Economic Advisors.
“I don’t think all 20 mayors will stand up,” Florida told Quartz. “But I think if two or three or four or five did, that would make a big difference.”
It’s certainly an interesting approach. Some experts, like LeRoy, think the best a community can hope for is to break even when they make these kind of investments, and some go so far as to say cities always lose out. But, after months of trying to outdo one another in the crush to become Amazon’s second home, it’s hard to imagine that these finalist cities will suddenly want to work together.
There is little doubt that elected officials in these 20 locales are all eager to be the one that lands the big fish. And with Amazon making big job promises, many of those officials’ constituents will view the opportunity as something they simply cannot risk. While critics may have the math right about the relative cost of these types of tax incentives, there’s a lot more at stake for local governments (and government officials) when it comes to winning a contest like this. In the end, Amazon will likely score a significant tax incentive wherever it lands on the map.