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Comment by mi100hael | Hacker News Reader

I'll be the one to voice disagreement and say I have no problem with cities offering tax breaks for large development projects like this. The lasting benefit to cities like Columbus, Indy, and Pitt would definitely be far more than even a couple billion in tax breaks. You're talking a fundamental change in direction from being a has-been manufacturing town to a national technology leader. Doubling real-estate values for current residents. Enormous increases in sales/property/income tax revenues. It's an investment with very real returns for these places.

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Yeah, but the point is that Columbus, Indy, etc. don't stand a chance of actually getting picked. They're just being used as leverage to get Boston/NYC/DC to play ball.

Isn’t that point based on the possibly incorrect assumption Columbus doesn’t have a chance?

And if their odds really are slim, wouldn’t the rational choice for Columbus to make be to offer tax breaks?

Like, why is the actor that is Columbus concerned at all if they put some sort of pressure on Boston/NYC/DC?

(I think HQ2 will be Columbus or Denver).

I agree. I think Amazon cares a lot more about logistics and future growth than the specific tax incentives being offered.

The prevailing claim that Amazon has already chosen and is trying to extract better incentives seems wrong to me. If that was the case Amazon could have approached ~5 cities from the start with a plan for each and put a far stronger competitive pressure on them.

I think what this is really about is getting the cities to do the leg work of the research and initial planning process. Amazon wasn't going to put together 200 initial site proposals and 20 more detailed ones. By letting the cities make the proposals Amazon can look at far more potential sites than if they had done the research internally.

IMHO the biggest issue for some of the smaller cities is attracting talent. Good luck getting top notch twenty-something engineers to move to Indy when all of their buddies are in SF, NYC, Boston, etc. Guess I'll eat my words if HQ2 ends up being in the midwest, but this seems like an insurmountable hurdle for the little guys.

Indy has Rose Hulman and Purdue, both of which pump out pretty good software engineers. Are they on par with the SV types? Maybe not, but you're not paying them 300k either.

For what it's worth, I live in Indy and I get emails from Amazon every week trying to get me to work somewhere fairly close to here (like Detroit).

Indy has Rose Hulman and Purdue

University of Illinois has top notch CS grads too, pretty close to Indy. Seems like the most likely reason they made the list.

Indy also has underrated infrastructure - having to host the massive event that is the Indy 500 every year has given the city experience in dealing with large influxes of travelers.

And that's where those H1B come in.

“top notch twenty-something”

LoL

Hold on. If they don't get picked, they don't have to go on with the tax break, right? The incentives are conditional.

The cities that don't get chosen, yes. But the thinking is that Amazon has already secretly picked a city years ago (Let's say Washington, DC) who was not originally planning to offer any tax breaks.Then they make a this big show that's basically The Bachelor, causing every city to fall over themselves to offer tax breaks. Once 200+ cities offer tax breaks, then Washington, DC feels compelled to "bid" like everyone else, unknowingly sweetening a deal that has already been "made."

Don't know why they wouldn't. Indy is a major interstate highway and air transport hub. FedEx has a big operation at Indianapolis. Columbus less so, but it's less than an hour away and directly connected by interstate. Both have affordable housing, generally low cost of living, and business-friendly government.

Not the guy who you commented to, but I'm guessing he thinks it's due to the talent pool they can recruit from by locating in a large metropolitan/suburban area.

Right. Not to mention in the case of Columbus you have 60,000 students, proximity to other large cities, room for growth, a nice little airport ripe to be ruined by heavy business traffic, and it's the state capitol. A company like Amazon can come into Indianapolis, Pittsburgh, or Columbus and basically dictate what they want - we want this land, we want this infrastructure, we want these flights at the airport - and it can all be accommodate with great benefit to the city as well. The only real downside to either of those three cities, aside from needing a few more tech workers or maybe more public transportation investment, is that they aren't "cool". It's not cool to have low cost of living and no interesting geographic features with mediocre weather.

People who think Amazon is going to set up shop in NYC or LA or something are delusional.

Do you have a source for this comment or are you speculating?

Speculating, as is true for everyone on this thread unless your name is Jeff Bezos.

I’m inclined to agree but recognize that this has also been the pitch for subsidizing sports teams and new stadiums at tax payer expense and those have a terrible track record.

For football(American), I agree, but basketball and baseball stadiums see much more use. MLB teams play 81 home games a year. NBA teams play 41 games a year, and basketball stadiums can also double as Hockey Arenas, and concert/convention venues.

NFL teams only play 8 home games a year, and they're usually very big - 60k-100k seats - much too large for almost any other event. These massive buildings might only be used 10 or 12 times in a year. Huge waste of taxpayer money.

There is, in general, no lasting benefit to the cities that give tax breaks to corporations. http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban...

But this isn't some "in general" deal to pay hundreds of millions to keep some ho-hum factory employing a couple hundred employees. We're talking about a very unique deal involving billions of dollars invested from Amazon and tens of thousands of well-educated, well-paid employees.

Special pleading? Why would this deal have a different outcome than others?

To be fair; their biggest example is a company pulling out after functionally going bankrupt. That's more to do with 'be careful who you play ball with' and general risk of doing business at all than method used. They complain they aren't getting tax revenue they planned ~15 years later - but that also is compared to not getting any revenue from the company not being located there in the first place.

Do i want my city to give Amazon a huge incentive package? Probably not, I think we're moving in a good direction already. Would I be upset if they promised significant public transit improvements as a lure to Amazon? Not at all; long overdue civic improvements that likely will never get approved else-wise.

> not getting any revenue from the company not being located there in the first place

This has to be balanced against the cost to the municipality over the years the company would have been there. The tax breaks and incentives may generate revenue, but as the story notes, the fully burdened cost to the government may wipe out any additional tax revenue. It is proper to ask "what additional costs did taxpayers bear that they wouldn't have if the company had not located there?"

Agreed - it's a balance.

The exact same thing is said of sports stadiums, WalMart stores, and was said of the steel industry back in the day. Companies have shown they’re perfectly willing to leave as soon as those breaks expire, or they get a better deal elsewhere.

Yeah, it is less like a high school drama, and more like buying a guaranteed tax revenue stream so large that it makes Goldman Sachs jealous.

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