Asked and answered
Tuesday, Nov 13, 2018 - Posted by Rich Miller
* Tribune…
Amazon will split its second headquarters between New York’s Long Island City and Arlington in northern Virginia, the e-commerce giant said Tuesday, ending Chicago’s hopes of adding a highly coveted corporate name and thousands of high-paying jobs to the city’s burgeoning tech sector. […]
Now local leaders must figure out on their own how to make Chicago a stronger magnet for technology talent. Some said being on Amazon’s short list helped boost Chicago’s reputation as a tech city. But there is still work to be done attracting companies — large and small — to Chicago, and growing local startups and businesses.
* Duncan Black…
As people start counting up the absurd amounts of public money that are going to be handed over to Amazon, I’ll ask the dumb question of why most municipalities are unable to comprehend that providing nice things for their citizens is also a good way to attract a tax base. I mean, build a d**n park. Improve your schools. Clean the streets (this is a Philly thing). These things are relatively cheap compared to throwing hundreds of millions at companies that don’t need them anyway.
There’s more to it than that (for instance, Penny Pritzker’s new P33 initiative looks promising), but it’s a good place to start.
- 3cequ- - Tuesday, Nov 13, 18 @ 1:30 pm:
And what did the business community just ask for? Stability. Set a tax rate, provide services, be fair. If we do those things, we can be successful drawing more than our share of business to Illinois without giving up huge subsidies.
- cover - Tuesday, Nov 13, 18 @ 1:33 pm:
I’m very glad that Illinois isn’t shoveling taxpayer funds at either Amazon or Foxconn. Wisconsin will regret that Foxconn deal for years to come.
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 1:35 pm:
I wonder if the JB pledge to increase minimum wage to $15/hr will include the Amazon centers in our state.
- DarkDante - Tuesday, Nov 13, 18 @ 1:40 pm:
==I wonder if the JB pledge to increase minimum wage to $15/hr will include the Amazon centers in our state.==
I believe Amazon already announced an initiative to raise all wages to the $15 level. They cut a lot of other bonuses to finance it, but hey, at least warehouse workers can get a decent wage.
- Montrose - Tuesday, Nov 13, 18 @ 1:41 pm:
What the selection showed is that a low tax location was not a factor in decision making. New York, New York City in particular, isn’t known for its low taxes.
Access to a decent workforce and being in a location the workforce could easily get to (both places have great public transportation infrastructure) mattered.
Being close to places that Jeff Bezos wants and needs to be mattered.
Having better access to federal government mattered.
What the income tax rate is? Not so much.
- wordslinger - Tuesday, Nov 13, 18 @ 1:46 pm:
Little surprised by that particular location in Northern Virginia. Hope they like jet noise, because its practically on the Reagan runways.
- Steve - Tuesday, Nov 13, 18 @ 1:46 pm:
Chicago and the state of Illinois don’t need to / can’t afford to subsidize Amazon at $48,000 per job. Everyone should be proud that we didn’t get Amazon at that outrageous price.
- siualum - Tuesday, Nov 13, 18 @ 1:47 pm:
Economic development in Illinois is pretty much “how much can we give away” in terms of tax abatements, etc. And how many times have we seen these businesses shut down after the incentives have expired? Two examples come to mind: Motorola and Nippon Sharyo.
- wordslinger - Tuesday, Nov 13, 18 @ 1:56 pm:
–Economic development in Illinois is pretty much “how much can we give away” in terms of tax abatements, etc.–
In reality, year in and year out, Illinois is at the tops among states in startup and expanded facilities (you can check the Site Selection magazine archives for that).
Despite the Rauner/tronc/IPI partisan talking points over the year, the fact is Illinois is fifth among 50 in GDP.
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 1:59 pm:
DarkDante. You are correct. I completely forgot about that.
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 2:04 pm:
Is JB a free market guy like Rauner claimed to be?
- G'Kar - Tuesday, Nov 13, 18 @ 2:12 pm:
siualum–the closing of Nippon Sharyo had much more to do with their inability to produce a desired product. They lost a $371 million contract with Amtrak to produce passenger cars for Illinois and California when their prototype failed to pass safety checks. Not surprisingly after that they were unable to attract any more business.
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 2:12 pm:
In my 5 years living in Lincoln Park I felt like the cost of living was at least double that of southern Illinois(we had one to many vehicles). Northern Va. And Long Island are also both pricey. I ask this to the all knowing CapFax readers. Is $150k/yr enough to live on in these urban centers?
- siualum - Tuesday, Nov 13, 18 @ 2:20 pm:
-G’Kar- true enough. But the fact remains its development was highly subsidized, and now the plant is vacant.
- A Jack - Tuesday, Nov 13, 18 @ 2:29 pm:
I have to wonder that since Amazon is only delivering half the promised jobs to two locations, if each location can cut the promised subsidies in half.
- LXB - Tuesday, Nov 13, 18 @ 2:34 pm:
The median household income in Queens is just a bit under $60K, so $150K is probably enough to live on.
- City Zen - Tuesday, Nov 13, 18 @ 2:39 pm:
Congratulations to all HQ2 participants for providing Amazon with big data on their respective metropolitan demographics…for free.
- JoanP - Tuesday, Nov 13, 18 @ 2:55 pm:
Ha. This story from the NYT says that one of the big reasons NYC got the HQ was the ability of DeBlasio and Cuomo to work together: https://www.nytimes.com/2018/11/13/nyregion/amazon-long-island-city.html
- DuPage Saint - Tuesday, Nov 13, 18 @ 3:00 pm:
Thank goodness Amazon passed us by. They need no subsidy
He just played everyone. I am sick of corporate welfare at the expense of public wellbeing. I look forward with great anticipation to the Wisconsin Foxconn deal implosion
Maybe JB can retool the TIFF scams in this state
- Anonymous - Tuesday, Nov 13, 18 @ 3:07 pm:
Amazon is moving to the nations political (influence legislation) and financial/media capital (they are turning into a media company) is quite obvious - no other municipality had a chance. I believe this so called competition was to bleed incentives out of NYC and Northern VA.
- Generic Drone - Tuesday, Nov 13, 18 @ 3:19 pm:
Time to stop government subsidies and bailouts of companies without making them pay it back.
- Generic Drone - Tuesday, Nov 13, 18 @ 3:20 pm:
I guess i have been banned
- In 630 - Tuesday, Nov 13, 18 @ 3:38 pm:
Companies keep raising the stakes in these so-called bidding contests. States and local governments need to come together, ban these giveaways, and agree to stop playing along.
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 3:48 pm:
Snark. I expect giveaways from Democrats but to think a Republican would ever do such a thing is unimaginable.
- Henry Francis - Tuesday, Nov 13, 18 @ 3:55 pm:
Whatevs. Who needs Amazon when you have all those huge companies from Japan, China. Germany, etc. that the Guv talked bidness with in his oversea trips. How many jobs have they created now?
- Arthur Andersen - Tuesday, Nov 13, 18 @ 3:59 pm:
word, who doesn’t like to watch planes on a nice day?
What was telling to me about that site was that the GSA had recently relocated two Fed agencies (22,500 jobs) outta there elsewhere in the region. When the G is bailing, there goes the neighborhood.
- revvedup - Tuesday, Nov 13, 18 @ 4:41 pm:
Amazon bailed on the State of Chicago…errr, Illinois for several reasons. First was the lack of workable government at both levels. Second was the rampant violent Chicago crime and lack of meaningful response to it. Third was continued uncertainty over tax, finance, and economic policies. Fourth, the economic mess of the State and City.
- Archpundit - Tuesday, Nov 13, 18 @ 4:42 pm:
===at least warehouse workers can get a decent wage.
Sort of. The Amazon employees get a raise, the contractors/those who work for employment agencies who are a huge chunk of the workforce aren’t necessarily included.
DC is a great place to be partially centered since the real Amazon business is web services/hosting and the government is a great customer.
- wordslinger - Tuesday, Nov 13, 18 @ 4:56 pm:
–word, who doesn’t like to watch planes on a nice day? –
There’s that, of course.
Not my favorite part of the DC metro. Very congested, already.
At the end of the Metro, which is nice, but definitely not driver-friendly, with all the restricted areas around The Pentagon, Ft. Meyer and Arlington National Cemetery, plus the Potomac to deal with.
- DuPage Dave - Tuesday, Nov 13, 18 @ 7:14 pm:
I think Chicago lucked out on this one. Like Foxconn, the winning areas will spend tons of money for questionable payoffs.
Although you have to enjoy the picture of Emanuel failing to land the big deal again. Kind of like Jerry Krause repeatedly failing to land a big free agent in the post-Jordan era.
- Beacon of Hope - Tuesday, Nov 13, 18 @ 7:41 pm:
What will now happen to Intersect Illinois, the “statewide marketing arm”?
- Blue Dog Dem - Tuesday, Nov 13, 18 @ 8:49 pm:
I repeatedly reached out to the Pritzker team during the campaign about Intersect Illinois. No response.
- Freeport Fred - Tuesday, Nov 13, 18 @ 9:33 pm:
I would imagine JB will want to set up his own Econ Development team. Intersect was a Rauner brain child that has had limited results and takes credit for local municipality work. Never saw them make it down south , maybe best to gut the Dept of Commerce and Intersect and make a real “ Best Team in America”