Amazon-NYC reversal will aid PPPs in other cities

Subject

Corporate incentives to cities.

Significance

Amazon’s abandoment of its second headquarters (HQ2) plans in New York City (NYC) provides insight into limitations of subsidies to attact corporate investment to cities, and the potential value of public-private partnerships (PPPs) as an alternative.

Impacts

• Research showing that firms flock to people, not places, suggests cities should fund services and infrastructure, not firms.
• New York Governor Andrew Cuomo tried to persuade Amazon to return but made little progress and the campaign quickly lost momentum.
• Amazon employs 6,600 people in Austin, Texas and will add 800 jobs without incentives, early evidence that cities will learn from HQ2/NYC.