Home » Amazon’s 238 Suitors – Pro-Business or Crony Capitalism?

Amazon’s 238 Suitors – Pro-Business or Crony Capitalism?

by Alex McGee

Amazon is looking for a location for its second headquarters, “HQ2,” and it seems the world’s largest online retailer will have quite the crop to choose from. According to Reuters, Amazon received 238 proposals from city and regional governments across North America. These proposals ranged from tax benefits to investment in infrastructure to the area, some to the tune of billions of dollars. In return, the company said it would invest more than $5 billion and create up to 50,000 jobs.

Amazon reported bids came from 54 states, provinces, districts, and territories in the United States, Canada, and Mexico. While Amazon did not disclose the range of incentives it was offered, Reuters reports that New Jersey proposed $7 billion in potential credits against state and city taxes. One suburb of Atlanta reportedly offered 345 acres of industrial land to create a new city called Amazon.

For those bidding for the new Amazon location, it’s an opportunity to bring new jobs and economic development to their city (as well as political clout to the winner of the contest). However, some wonder if the benefits of hosting the company will really outweigh the massive costs these cities are prepared to give in incentives and favoritism.

For example, officials in San Antonio decided not to bid for Amazon’s attention, despite matching Amazon’s requirements to do so. In an open letter to Amazon’s CEO Jeff Bezos, San Antonio Mayor Ron Nirenberg stated that the public process was creating a bidding war between cities, and that “blindly giving away the farm isn’t our style.”

The San Antonio Economic Development Foundation stated that the city’s decision to refrain from bidding “serves as a testament to our dedication to being good stewards of the economic incentives San Antonio has to offer businesses.” Nirenberg’s letter states that Amazon is still welcome in San Antonio, simply without special treatment. Perhaps such a principled stance would make for an attractive destination for “HQ2?” Amazon has said it will decide where to bring “HQ2” next year.

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