Cities Selling Themselves Out to Amazon

Saturday December 2nd, 2017   •   Posted by Paul Theroux at 3:26pm PST   •  

25656202 - santa clara,ca/usa - february 1, 2014: amazon building in santa clara, california. amazon is an american international electronic commerce company. it is the world's largest online retailer. Amazon made its reputation as the world’s largest online retailer by making it possible for anyone anywhere to buy consumer products. But has anybody considered what the company itself is capable of buying when it becomes the consumer?

In September 2017, Amazon announced that it was seeking to establish a second headquarters in the United States, where the company would seek to invest $5 billion in the construction of new facilities and which would potentially house as many as 50,000 employees. Called HQ2, Amazon succeeded in soliciting hundreds of offers from city governments across the country, where some have truly crossed the line of ethics in looking out for the best interests of their residents.

Danny Westneat is a columnist at the Seattle Times, who has obtained details of the bids offered by 30 of the 238 cities that have actively solicited Amazon to locate their HQ2 project in their municipalities. That limited sample shows some of the extreme lengths that local politicians have gone, where some City Halls even offering to give the Amazon corporation control over their civic governments.

Most of the HQ2 bids had more traditional sweeteners. Such as Chula Vista, California, which offered to give Amazon 85 acres of land for free (value: $100 million) and to excuse any property taxes on HQ2 for 30 years ($300 million). New Jersey remains the dollar king of the subsidy sweepstakes, having offered Amazon $7 billion to build in Newark.

But more of a bellwether to me are proposals that effectively would put Amazon inside the government.

Some are small. Boston has offered to set up an “Amazon Task Force” of city employees working on the company’s behalf. These would include a workforce coordinator, to help with Amazon’s employment needs, as well as a community- relations official to smooth over Amazon conflicts throughout Boston. (Surely Amazon can handle these things itself?)

But wait, there’s more! And it gets worse….

But the most far-reaching offer is from Fresno, California. That city of half a million isn’t offering any tax breaks. Instead it has a novel plan to give Amazon special authority over how the company’s taxes are spent.

Fresno promises to funnel 85 percent of all taxes and fees generated by Amazon into a special fund. That money would be overseen by a board, half made up of Amazon officers, half from the city. They’re supposed to spend the money on housing, roads and parks in and around Amazon.

The proposal shows a park with a sign: “This park brought to you by Amazon,” with the company’s smiling arrow corporate logo.

“The community fund projects would give Amazon credit for the funding of each project,” the proposal says. “The potential negative impacts from a project would be turned into positives, giving Amazon credit for mitigating it.”

Is it even legal to give a company direct sway over civic spending like that?

It rather makes the deal offered by Chicago, a city whose reputation for extreme corruption is well established, pale by comparison. Here, if Amazon locates its second U.S. headquarters in the Windy City, the company would be allowed to pocket all of the local income taxes that its employees in the city would see taken out of their paychecks.

60778788 - 3d flag of fresno city (california), usa. 3d illustration. This kind of dealmaking exposes the practice of offering incentives such as these to attract employers as the scam that it is, where the people most harmed by the practice are those whose “best” interests elected officials have specifically pledged to serve. The money for every goody and perk being offered to appeal to these rent-seeking corporations has to come from somewhere, and since it will not be from either the officially-blessed corporation or the city officials’ own pockets, the burden of paying the bills will instead fall squarely upon the indigent city residents who the rent-giving politicians seeking crony relationships with rich corporations would truly seem to hold in very low esteem.

In far too many ways, the bidding frenzy for Amazon’s HQ2 project parallels the games that billionaire sports team owners have played in getting local governments to pick up the tab for the multi-million dollar stadiums they demand, where the public often finds itself obligated to pay the municipal debts taken out to finance the projects long after the teams have packed up and moved to other cities where more corrupt officials were all-too-willing to get them even sweeter deals at the expense of their citizens.

It’s amazing how extraordinarily generous city officials can be with taxpayer dollars when presented with the public policy equivalent of a get-rich-quick scheme. It’s disturbing to find that some of these officials appear to view the anti-democratic transfer of political power away from the people who live in their communities, as in Fresno, to be a benefit.

For whose interests do the politicians and bureaucrats in these communities really work?

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December 2017