EDITORIAL: Plenty of upside to not hosting Amazon
When one door closes, the saying goes, another opens.
Now that Amazon has closed the door on a second headquarters being built in Pennsylvania, state leaders are free to rattle a few doorknobs as they seek new doorways to economic development.
Amazon’s announcement Tuesday that it will build East Coast operations in Long Island City, Queens, and the Washington, D.C, suburb of Crystal City, Virginia, was, to be sure, disappointing. (A third, smaller facility will be located in Nashville, Tennessee.)
After all, not one but two Keystone State cities — Pittsburgh and Philadelphia — were among the 20 finalists for the company’s promise of $5 billion in construction spending and 50,000 high-paying jobs. That’s a once-in-a-lifetime investment infusion, and it explains why 238 cities and regions nationwide fell over themselves to submit proposals to host the facility.
Pennsylvania was no slouch. In the wake of Tuesday’s announcement, Gov. Tom Wolf’s office revealed the state offered up some $4.6 billion in financial assistance and infrastructure improvements over the next 25 years. (The winners offered a combined $2 billion-plus in incentives; some bids went as high as $7 billion.)
While the infusion of jobs, investment and growth would have been nothing to sneeze at in Pennsylvania, they would have come at a cost well beyond the state’s financial incentives.
Incoming Democratic Rep. Alexandria Acasio-Cortez of New York, for example, is among the critics of her state spending hundreds of millions in incentives to “a billion-dollar company,” especially when there are pressing infrastructure needs citywide. “We need to focus on good healthcare, living wages, affordable rent,” she wrote on Twitter. “Corporations that offer none of those things should be met w/ skepticism.”
There are also concerns that tens of thousands of new, high-tech jobs will mean an influx of out-of-state residents, higher housing costs and displacement of longtime residents.
In other words, the very character of a municipality could be changed in ways welcome (stable jobs; greater tax base; ancillary and second-tier business growth) and unwelcome (gentrification; a housing crunch; redirection of municipal investment).
Hard to believe, then, that hosting Amazon’s second home would not have been a dual-edged sword for a city like Philadelphia, which leaned heavily on its quality-of-life attributes — walkability and bike-ability, sidewalk cafes, a thriving art scene, low-cost amenities — in its pitch to Amazon.
So, there is upside to being a bridesmaid at the wedding of Amazon and its new partners. Aside from the inevitable unintended consequences of such a mammoth development, the financial commitment, which would have been steep and long-lasting, need not be sweated. And while Amazon is, indeed, a desirable star on which to hitch a state’s economic wagon, there is greater flexibility in a diverse and multipronged development approach. Which is what state leaders are now free to focus on.
In fact, a tentative step in that direction was taken just as the Amazon announcement was being circulated. Wolf on Tuesday announced up-and-coming online retailer goPuff is putting down stakes in Pennsylvania: The firm will build a headquarters in Philadelphia and 10 warehouses across the state, resulting in an estimated 500 new jobs.
That’s no Amazon, but neither did it require billions in incentives and the potential sacrifice of community identity.
Wolf and state development leaders must continue to pursue such avenues as the state seeks to attract, retain and expand new and existing businesses.
Pennsylvania has plenty to offer job creators and entrepreneurs — more so now that it will not be locked into a 25-year investment relationship.