WASHINGTON: As the winners of the biggest corporate prize in decades — the new
Amazon headquarters — relished their victory, debate was still raging over the billions of dollars in incentives offered to attract the fast-growing US technology colossus.
The new Amazon “HQ2” with an estimated $5 billion investment creating 50,000 new
jobs will be split between the Long Island City district in New York and Crystal City, a
Virginia community across the Potomac River from the US capital Washington.
Officials in both communities welcomed what they said would be a major economic boost from Amazon in creating jobs, new facilities and infrastructure, and that the plans would be positive for public coffers. But critics warned that tax incentives and investments from state and local governments — up to $3 billion in New York and $2.5 billion in Virginia — may outweigh the economic benefits from Amazon’s investments.
Amazon’s search for incentives — derided by some as a “Hunger Games” competition — is a common practice in the United States.
Michael Farren, a George Mason University research fellow who specialises in corporate relocations, said these kinds of incentives rarely make the difference in a company decision.
“Corporate relocation decisions are made on the basis of things that have deeper impact on the business’ bottom line, like the availability of a skilled workforce,” he said. “So why do they do this? It’s because otherwise politicians couldn’t claim credit for the deals.”