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How Lost Amazon HQ2 Cities Still Can Win



  Is Amazon a monopoly?

Only one city will win Amazon's second headquarters. But other cities can still benefit from the process.

Some cities, such as Denver, Philadelphia and Toronto, indicated that they see a strong interest from companies looking to expand or move after being short-listed. Amazon's new facility, called HQ2.

"The attention that has been on the list since the nomination is enormous," said Julia Sakas, spokeswoman for Toronto Global, the group that organized the city's bid for HQ2. "It literally put us on the radar of companies that might never have considered the Toronto area."

Last year, Amazon received 238 proposals from large and small cities to host its next headquarters. It announced the top 20 candidates in January. The campus will cost about $ 5 billion and create up to 50,000 jobs.

Some cities offered Amazon large tax breaks and perks for HQ2. For example, Newark, New Jersey, announced $ 7 billion in incentives to lure the company, while Maryland offered a $ 8.5 billion package (Montgomery County is one of the finalists).

Related: Texas City Reveals Why Amazon Lost Amazon HQ2

"Many cities have invested an incredible amount of work on Amazon HQ2, and this [could] has distracted them from other economic development opportunities," said Nathan Jensen, Professor at the University of Texas in Austin. "But using their information and marketing materials from the HQ2 offering could be an effective way to reuse some of the results of this hard work."

Cities like Toronto also use the information they've put together for their Amazon proposals to attract other companies. Since the October offer release, Sakas has been downloaded more than 1

5,000 times by businesses and the public.

Some local organizations have already used the data from the proposal for research purposes.

According to a spokesman for the city's Department of Commerce, Philadelphia has become more interested in companies.

"The videos [we created for HQ2] were able to capture some of the city's best qualities and to illuminate them in a way that was easily understood by people not so familiar with Philadelphia compared to New York or Washington DC are." the spokesman said.

Several companies have called Philadelphia's Amazon Place a catalyst for their new interest in the city. One company, Elm Partners, a investment firm based in London, is moving to the city.

Denver also said it received "significant" interest following the public release of the short list, according to a spokesperson for Metro Denver Economic Development Corp., the private organization that leads its HQ2 effort. Denver has not revealed the incentives it offered.

Related: For Amazon HQ2 hopeful, Seattle serves as a warning story

Even cities like Arlington, Texas, which are no longer in the running hope, will generate publicity around HQ2's interest in it Supply Location Arlington offered up to 1.7 million square feet at Globe Life Park – home to the Texas Rangers baseball team moving to another stadium – to host its new offices. The city submitted an application as part of Dallas-Forth Worth's bid for the facility. (Dallas-Forth Worth remains a candidate).

"We are open to business and look forward to other great companies looking to see Arlington," said Mayor Jeff Williams.

However, some experts warn that the enormous incentives offered to Amazon could create a troubling precedent for future projects.

"For many of us studying economic development, we were shocked by the response of the cities to Amazon HQ2 – both in the lack of transparency and in the willingness to provide massive incentive packages," said Jensen. "I fear that the economic development incentives offered to Amazon HQ2 could be the new norm for some of these communities."

He added that a city or state should be careful not to give away so many tax benefits that it otherwise violates the community. In order to pay local tax cuts, cities may need to levy taxes or save on public services such as education and infrastructure.

"Tracking this strategy of mega deals [cities] is conspicuous and may allow politicians to get credit for economic development, but it should not be the primary goal of economic development," Jensen said.

CNNMoney (New York) First published May 17, 2018: 3:15 pm ET


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