Gargantuan State + Local Tax Incentives = Pyrrhic Victory for “Winning” Bidder
“Amazon Narrows Down List for HQ2 to 20 Cities”
—Headline, Bloomberg.com (1/18/2018).
Anyone hearing the news that Amazon had “narrowed” the list of contenders down to 20 cities might properly comment, “Good Lord! How many cities were on the original list??” (answer: 238).
While I don’t doubt the wisdom of such an approach if you’re Jeff Bezos, it’s a good bet none of the competing cities feel likewise.
That’s because, with such stiff competition, you’d expect the winning bidder to throw fiscal caution to the wind, and seal the deal with a truly historic tax giveaway.
Housing Market DÃ©jÃ Vu
It all sort of reminds me of the housing market, post-bust, when banks dumping foreclosures would preside over feeding frenzies often involving dozens of Buyers.
The banks’ preferred M.O.: dangle an artificially low price in front of Buyers; announce a deadline for “highest & best” offers; then, after culling the field (a bit), announce to the survivors a new deadline for — yup, highest & best offers, round 2.
Wash, rinse, & repeat — sometimes multiple times.
All of which is why I’m not shedding any tears over the Twin Cities’ “failure” to make the cut . . .
See also, “Highest & Best” ” Games & Abuses.”