When a city tells Amazon no, what happens?

Local News

FORT WAYNE, Ind. (WANE) — When City Council denied personal property tax breaks Tuesday for the new Amazon distribution center, Fort Wayne joined a very short list of cities that have said no to Amazon.

How will the online retail giant respond?

Quite possibly without missing a beat, according to the watchdog group Good Jobs First. “We’re seeing a lot of places where Amazon is not even bothering to ask for incentives, because they need to grow,” said Arlene Martinez, Director of Communications. “They need to move a lot more quickly than that.”

Good Jobs First tracks economic development subsidies and incentives doled out by state and local governments. Martinez cited two cases in New York where Amazon was asked not to locate in a community and withdrew completely. In suburban Pittsburgh, community outcry might have led Amazon to decline $10 million is state subsidies. She believes Fort Wayne is the first to welcome the company with an initial round of tax phase-ins, but not offer more.

“It’s great Fort Wayne did that. It’s a big move because so many places will just give Amazon whatever they want,” she added.

Amazon, which collects more than $800,000 in revenue per minute, received $16 million in property tax incentives for Project Mastodon, the code name for the massive distribution center on U.S. 30 and Flaugh Roads. Council members had to sign a non-disclosure agreement to vote on the initial proposal.

“Amazon uses that tactic a lot,” Martinez said. “They’re kind of a bully when it comes to the way that they force cities into non-disclosure agreements or threaten to not come. If you look at their business model, they have to open in a lot of places really quickly; they have to be near transit; they want to be near certain labor pools. There’s other factors that are much more important for Amazon but they will use this issue of subsidies and the threat of not coming as a way of getting money out of governments. Of course, governments just want to bring jobs to their community, right? I think they mean well but it really is Amazon holding this power and they really wield that.”

Nationally, Amazon wants $1 billion in yearly tax breaks, Martinez added, and has racked up over $4 billion in incentives already, according to their Amazon Tracker. Political leaders and economic developers are fond of the incentives but Good Jobs First doubts their effectiveness. “They’re so popular among elected officials and other policymakers, because they’re something tangible that you can really point to, even though research on the left, on the right, and libertarian shows these incentives are ineffective at creating jobs or boosting the regional economy.”

UPDATE: An earlier version misquoted Amazon’s $1 billion annual incentive goal and its $4 billion incentive total.

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