In the biggest ever defeat for a subsidized project in history, Amazon announcedyesterday that it was canceling its planned half of HQ2 for New York City, which was to receive subsidies worth at least $3.133 billion. After facing months of public opposition, the company provided a Valentine’s Day present in the form of capitulation. Amazon showed that, like Electrolux, its efforts to extract maximum subsidies from 238 cities constituted corporate rent-seeking on a grand scale.
Moreover, as Richard Florida reports at Citylab, the victory has also energized reformers around the country searching for a solution to the problem of corporate bidding wars. I myself have received inquiries from multiple elected officials’ offices about the European Union’s systematic control of investment incentives.
I’m playing at a chess tournament in Texas right now, so I will have more to say about this when I next have time to post.
“But perhaps the strongest sign that the deal was in trouble came when Gianaris, who represents Long Island City, was appointed to serve on the Public Authorities Control Board, which must approve all but a $500 million capital grant from the state. If Cuomo confirmed Gianaris’ nomination—not doing so would be “a declaration of war against his colleagues in the Democratic party,” says Kim—he would have had the authority to effectively veto the project.”
DINO Cuomo put in a box of his own making!