Deal or No Deal: Amazon Headquarters in Newark?

Newark is getting a full-throated backing from Gov. Christie, the New Jersey Economic Development Authority (EDA) and even a little plug from the New York Times on its bid to bring Amazon’s second headquarters to New Jersey. Here’s an excerpt:

The city is Newark.

“We have exactly what Amazon is looking for, in terms of expanding their company in a city that will help them grow and where it would have real social impact,” said Mayor Ras J. Baraka in an interview. “Newark is an opportunity to make a real statement, about what they’re trying to accomplish in the United States in the age of Trump.”

On Monday afternoon, Gov. Chris Christie of New Jersey and Senator Cory A. Booker, the former Newark mayor, joined Mr. Baraka at Rutgers Business School, which shares its building in the city with Audible Inc., whose 1,000 employees produce and sell audio entertainment and which is owned by Amazon, to announce that Newark is the state’s official bid in the headquarters race.

Three quick thoughts on the entire spectacle, whether this is “good policy”, and what it means for Jersey politics:

  1. I was in Denver for work last week, and the Denver mayor turned a conference speech into an impromptu stump speech for Amazon’s second headquarters to pick his city. Immediately after, a conference leader thanked him for his comments, but mentioned that he couldn’t endorse Denver for Amazon because he was working on the St. Louis application. It got a good laugh, but it’s the reason I haven’t paid too much attention to the Amazon #HQ2 process — from the beginning it seemed like a publicity stunt designed to set politicians and cities against one another to get the largest tax break possible.
  2. Are we sure this is a good bargain?

 

Buie touches on the game of chicken that cities regularly play, and that the New Jersey Policy Perspective has been doing great work on the issue for years. Their Jon Whiten makes an important distinction between strategies:

“They’re talking about doubling already generous corporate tax breaks,” said Jon Whiten, vice president of New Jersey Policy Perspective. “They’re not saying, we’ll invest billions in New Jersey Transit so workers can get to work on time, or in affordable housing so workers can have a decent place to live.”

While I generally think the research supports Jon Whiten — i.e. that investment is better spent through improving the city to make it more competitive for business in the long-term, than with short-term tax breaks — I’m open to the idea that the scale of Amazon’s move is so radically different in scale that it might be worth pursuing despite the exorbitant price tag.

3. What are the New Jersey political implications of this move? There has been nervous chatter in South Jersey that the upcoming gubernatorial race might recenter power in the north of the state — with the Sen. Steve Sweeney-Gov. Christie alliance ending,  and probable governor Phil Murphy a bit of a wild card. The sense has long been that North Jersey gets a disproportionate share of resources compared to South Jersey — an idea recently bolstered by research by my colleague Shauna Shames saying just that. Camden has been pushing hard for its own Amazon Headquarters application, along with several other cities in the state. It’s unclear how realistic Camden’s bid ever was, but the EDA asking for a centralized process, then picking Newark, likely frustrates South Jersey power players. My understanding is that Camden will still submit its application, though its chances have decreased with the state-backing of Newark’s application.

There’s a lot going on here, from policy to politics, and I’d love to hear from all of you what you think.

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