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Attempt at Massive Corporate Giveaway Fails

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Amazon will not be expanding its already existing satellite facilities in New York City building HQ2 in Long Island City:

Amazon said on Thursday that it was canceling plans to build a corporate campus in New York City. The company had planned to build a sprawling complex in Long Island City, Queens, in exchange for nearly $3 billion in state and city incentives.

But the deal had run into fierce opposition from local lawmakers who criticized providing subsidies to one of the world’s most valuable companies. Amazon said the deal would have created more than 25,000 jobs.

Amazon’s decision is a major blow for Gov. Andrew M. Cuomo and Mayor Bill de Blasio, who had set aside their differences to lure the giant tech company to New York.

As recently as Wednesday, the governor had brokered a meeting between Amazon executives and union leaders who had been resistant to the deal, according to two people briefed on the sit down. The meeting ended without any compromise on the part of Amazon, according to the people.

Name a more iconic duo! Although Cuomo at least seems to understand that he’ll never be president. Anyway, I wonder if they can figure out another use for that $3 billion.

This is a good piece:

That’s a good way for Amazon to send a message to other state and city governments around the country that may be considering tax incentives for Amazon facilities in the future: Jeff Bezos is not kidding around. But it’s also a win for the resurgent left in New York City, which rejected both the specifics of the plan and also more broadly the kind of coziness between elected officials and big business that the dealmaking represented.

While the question of local government subsidies to entice businesses remains an urgent one (see, for example, The Verge’s exposé of Scott Walker’s disastrous $4.1 billion Foxconn boondoggle), the HQ2 drama in many ways reveals an even bigger policy failure.

Simply put, while locating large pools of high-salary white-collar positions in the New York and DC metro areas makes a ton of sense for Amazon, it doesn’t actually make that much sense for either greater New York City or greater Washington. Amazon’s presence will tend to exacerbate those cities’ crises of housing affordability and overburdened transportation infrastructure.

And it makes no sense at all for the United States of America, which urgently needs more economic opportunity in dozens of other metro areas that have a different set of problems. America needs to find a way to do better than this. Being the home to a very large share of the world’s most dynamic high-tech companies is an incredible source of national strength, but in practical terms it does not benefit most Americans. With better policy, it could.

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