Sarah Holder is a staff writer at CityLab covering local policy, housing, labor, and technology.
Petitions and protests urge cities to stop offering tax incentives to Amazon HQ2. But who’s listening?
As cities draft incentive packages to lure Amazon’s second headquarters (HQ2), a diverse patchwork of foes to the bidding process have emerged. Economists, city council members, socialists, and even the Koch brothers are rallying against state and city leaders who have offered large economic incentives to the corporate giant.
Three city council members from HQ2 finalist cities released a joint statement last month, urging all lawmakers to decline authorizing these subsidies: Jared Evans from Indianapolis, Brad Lander from New York, and Greg Casar from Austin. It’s a symbolic move, but it could be the only one with teeth if Amazon were to pick one of their cities: In some, including Austin, city council serves the ultimate vote in approving local tax deals. Publicly professing an intent to vote “no,” as Casar has done, might inspire other members to follow.
The city council members are reacting to the billion- and million-dollar packages Amazon has already elicited from the cities that have made their bids public, with offers of everything from tax breaks to subsidized construction and training costs. But they are also reacting to the potentially vast pool of money that isn’t yet known. Only two sites have released unredacted versions of their proposals, and many others have obscured particulars. Not even the city council knows what’s in Austin’s bid, because while they do vote on it eventually, the Chamber of Commerce, not the city, does the actual bidding.
These lawmakers signed onto a pledge initiated by Richard Florida, co-founder of CityLab and Director of Cities at the University of Toronto’s Martin Prosperity Institute, urging city leaders to refuse to offer Amazon any extra economic incentives. After the council members affirmed their support, councilman Philip Kingston from Dallas and Alderman Scott Waguespack from Chicago's 32nd Ward added their names to the petition. “[W]e call upon you to forge and sign a mutual non-aggression pact that rejects such egregious tax giveaways and direct monetary incentives for the Amazon headquarters,” it reads. If all cities agree not to offer incentives, the reasoning goes, then no city will lose a competitive advantage and they’ll compete against one another on the merits of their cities’ attributes. By March, more than 15,000 people had signed it, mostly academics, economists, and business leaders.
Other lawmakers who have not signed onto Florida’s letter have found other ways to speak out about the bidding process. Fellow Austin council member Leslie Pool publicly called out the Austin Chamber of Commerce for its lack of HQ2 transparency.
“I know nothing about the Amazon bid. It appears none of my colleagues do either,” Pool said, according to the Austin American-Statesman. “I have been asking for some insight to what the proposal had, and I’ve been asking for six months. I find that extraordinary. It’s been mishandled by the Chamber. If they thought about it, they would have realized this would have been an issue for the whole town, and they should have talked to us about what they can negotiate.”
While Casar hopes the majority of Austin’s council, including Pool, will end up signing—and, later, voting—he says right now it’s more important to have broad representation across the 20 shortlist cities. The point of a non-aggression pact is that they mutually (and unanimously) disarm.
“Really, regardless of what’s in the Chamber of Commerce’s bid on behalf of the Austin area,” said Casar, “I believe that we would be better served if cities banded together and in unison decided to reject participating in what is a downward spiral at the expense of the public, for the private gain of Amazon.”
On another side of the ideological spectrum is Generation Opportunity, an organization of young conservatives backed by American Prosperity, which is in turn backed by the famous conservative billionaire brothers Charles and David Koch. Last month, the group launched a digital ad campaign geo-targeted directly to millennials in the 20 finalist cities, calling on them to help cities end “sweetheart deals.”
“Winning Amazon’s second headquarters will look more like losing for many Americans,” reads the ad, a torrent of urgent yellow and white words, dramatic music, and screenshots from cities’ video appeals.
While Florida’s letter focuses on local action, Generation Opportunity has also launched a national appeal to Congress. “Corporate Welfare is a Loss for Taxpayers and Young Entrepreneurs,” a pop-up on their homepage reads, urging millennials to sign their own petition, calling on the federal government to promote economic fairness and eliminate tax incentives.
Council member Casar says that the issue should ultimately be federally regulated. “But since it’s not being addressed, my hope is that as we build networks and connections amongst progressive elected officials, we would be able to harness the collective power of cities to match the huge corporate power of an organization like Amazon,” he said.
That collective power extends all the way down to the grassroots, as local branches of the Democratic Socialists of America organize their own targeted attacks.
When it became clear that the D.C. metro area was a front-runner among the finalist cities, the Metro DC DSA, Jobs for Justice, and the Fair Budget Coalition banded together to launch #ObviouslyNotDC—a play on D.C. Mayor Bowser’s hashtag campaign for HQ2, #ObviouslyDC. “Let’s prioritize DC communities, not the world’s richest man,” their website reads. (Jeff Bezos has a net worth of $112 billion, superseding Bill Gates on Forbes’ just-released Billionaires list.)
“There are already a lot of structural issues with DC,” said Margaret McLaughlin, the chair of Metro DC DSA and an organizer of ObviouslyNotDC. “We have a lot of homelessness that a lot of people pay lip service to fixing, but don’t actually do anything about.”
That D.C. has offered upwards of $100 million in tax incentives makes that lack of action “just entirely disingenuous,” she says. “This money could be used for fixing the huge deficit in WMATA funding that is only going to grow.” The offer is intended to create new jobs in the district, but McLaughlin predicts most of those will be filled by people moving from “the Bay Area, from Seattle, mostly white, and very well-educated.”
As D.C. residents gathered outside a recent budget forum hosted by the mayor, ObviouslyNotDC projected their logo above the front door. “Alexa, Go Away!” protestors bellowed. "What are the incentives, Mayor Bowser?" they asked. Bowser waved them offstage.
But ObviouslyNotDC’s campaign isn’t meant to antagonize Bowser specifically. “She doesn’t care, and she won’t care about a little socialist organization. It might be a thorn in her side, but she’ll continue what she’s doing. Same with the governors,” said McLaughlin. “We want to get more people aware of what’s at stake and what the consequences possibly could be—because that’s where the power lies, in the people.” EmpowerDC, a grassroots advocacy group for low- and middle-income DC residents, is harnessing that people power in the form of a localized petition, much like Florida’s. It calls on members of the D.C. council to affirm their commitment to withholding local incentives from Amazon, by issuing a public statement to that effect.
Petitions and protests might sway public opinion, but the impetus to stop a bidding war like this ultimately rests with Amazon and the cities vying for it to keep their proposals incentive-free. “Amazon is using their political and economic muscle to force cities to undermine the public good,” said Casar. “And the only way we can counter that isn’t city by city but actually by those cities working together.”
No city leader of a shortlist site has signed a mutual nonaggression pact, nor have they expressed interest in doing so. But, asked for their positions on incentives at a panel on local power at South by Southwest this week, both New York City Mayor Bill de Blasio and Austin Mayor Steven Adler rejected the notion of “excessive incentives,” a concept that hasn’t been precisely defined.
“Excessive incentives … or paying money to buy a company to come, that’s not something that we would do,” said Adler. “But I’m not going to preclude having the conversation about how in a new paradigm a company could weave itself into the fabric of a community or come into a city in a way that benefits that city. That’s a conversation that I think we would have, if Amazon would like to engage in that conversation.”
De Blasio has been firm from the start that it is not in the interests of his own city to offer incentives, but stopped short of weighing in on what others should do. (A bid on behalf of New York City offered by the state has not been made public).
“We respect all the other cities and their approaches. Everyone’s gotta figure out what works for them,” he said. “We don’t like the old paradigm. The old paradigm used to be a bunch of localities competed against each other to give the most money possible to a big company. We think that is a bankrupt concept.”