The Lie of Business Incentives

Even though Amazon pulled out of iths “HQ2” proposal, including Jeff Bezos’ notorious helipad, it looks like Amazon is expanding in New York City anyway.

The lesson to be learned here is that the best way to win when companies pit cities against each other for subsidies is not to play that game:

Amazon is reportedly back in the market for office space in New York City, which, if true, is a sweet bit of vindication for critics of the company’s whole HQ2 fracas.

In February, Amazon dropped its plans to build a massive office complex in Queens amid political blowback over a package of state and city subsidies the project would have received. Now, according to the New York Post, the company is shopping for real estate on the West Side of Manhattan. “The tech giant has been in talks with owners of two shiny new skyscrapers located just one block west of Penn Station — the newly built One Manhattan West and its soon-to-be sister project, Two Manhattan West,” the paper reports, citing “sources.” The company, which already has 5,000 employees in the city, is apparently looking for 100,000 square feet or “much more.”

That footprint is significantly smaller than the 4 million to 8 million square feet of space Amazon planned to build out for its HQ2 project. But the fact that the company is still planning to grow its New York presence without a large, specially crafted subsidy package seems to prove the basic point many of the deal’s critics made, which is that major cities with large pools of business and engineering talent do not need to stoop to corporate welfare in order to attract major tech companies, which tend to go where they can find enough employees.

Actually, it’s not even that, Amazon’s locations were, as tends to be the case, where their CEO already had a house.

Seriously, city fathers, do not play that game.

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