Economic development is a very important part of planning for a city. As described in Contemporary Urban Planning, one very common approach taken by city officials is to try to keep as many big companies as they can in the city. The logic is a big company employs many citizens of the city and therefore is the source of a large amount of income tax and economic vitality of a city. The deal that struck out to me the most was the deal that Washington State made to Boeing to build its 777x production line in an area near Seattle. The deal is estimated to be worth about $8.7 billion and last up to 2040. It is by far the biggest tax break in our country’s history and given the tax breaks that it received in the last two year that $8.7 billion dollar estimate might have been an underestimate. This starts to call into question the value of these deals especially since Boeing is still cutting down on the number of their employees.

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Boeing’s Production Line

This brings us to the flashiest deal out on the market right now, Amazon’s HQ2. It will bring in 50,000 employees at an average income of $100,000 a year. Those numbers are so extremely attractive to any city. It’s so attractive in fact, it seems as if all the big cities (and even some not so big cities) have thrown in a bid to try and get HQ2.

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Amazon’s HQ in Seattle

Now this isn’t a bad thing, not yet. A lot of the cities haven’t put out official numbers, but from the few that have we are approaching a concerning area. For better or for worse, New Jersey is  a prime example of why it is concerning. A few months ago, Governor Christie proposed up to $7 billion in tax incentives, for Amazon to place their HQ2 somewhere in New Jersey. That proposal is very similar to the record breaking $8.7 billion deal that Washington proposed in 2013 and is now not really making its investment back.

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Governor Christie announcing proposed tax breaks

Sure, Amazon says it will make an investment of $5 billion dollars wherever it ends up. And yes, 50,000 times $100,000 is a lot of additional income for a city. But these are the numbers provided by Amazon in order to get the best incentives that they can get. It is up to the cities to look beyond the flashiness of Amazon and on paper calculations of the benefits and really consider the implications of such large tax breaks as well as potential costs. As someone who really wants a job at Amazon, I would love to have HQ2 in NJ, but I would much rather the state and Newark (or whatever city has the best chance) to make the best decision for it’s residents.

Sources:

“Amazon Announces 238 Proposals for HQ2.” Amazon.com, Amazon, http://www.amazon.com/b?node=17044620011.
Bagli, Charles V. “Newark Says, Hey Amazon, Look Over Here.” The New York Times, The New York Times, 16 Oct. 2017, http://www.nytimes.com/2017/10/16/nyregion/newark-amazon-headquarters.html.
Levy, John M.. Contemporary Urban Planning. 11th ed. N.p.: n.p., n.d. Print.

 

 

 

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