Briggs: New York losing Amazon should be a warning to Indianapolis

Amazon's has canceled its plan to open corporate offices in Long Island City in the Queens borough of New York.

Of course HQ2 was about incentives.

After executives and government officials spent more than a year swearing that the bid process for Amazon's ostensible second headquarters was not rigged to maximize taxpayer subsidies, the company has revealed it was never opening offices anywhere without government money.

The promise of HQ2, which is going down in flames in one city, could be instructive for Indianapolis.

Amazon on Thursday canceled plans to open satellite offices in the New York City borough of Queens, the latest swerve in a headquarters search process, known as HQ2, which began in September 2017.

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The reason? Amazon's $3 billion incentive package in New York became perilous amid mounting political opposition.

No money? No headquarters.

That's one lesson. 

Another is that New York's rebuke of Amazon could represent the height of corporate overreach on incentive grabs. And people who are in the business of negotiating such deals now have to ask themselves whether they can assume elected officials will go along, especially if the terms are kept secret until the last minute.

Even though Indianapolis made it to Amazon's list of 20 finalists for HQ2, we don't know what type of incentive package Indiana officials dangled. That's because the city and state submitted a regional bid through the Indy Chamber, which is not subject to public records requests.

It does not appear that Amazon is going to reopen its bid process for whatever we're supposed to call HQ2 these days. But the Indy Chamber in a statement suggested that if it were to re-engage with Amazon, any and all discussions would continue in secrecy.

"As is the case with any major economic development project, our team would need to evaluate any new requests should they materialize," Indy Chamber spokesman Joe Pellman said. "Indy Partnership’s regional economic development experts receive daily requests for information on potential business expansion or relocation projects from across the globe, activities that typically remain confidential to respect the client and the process."

That might be a less tenable operating procedure than it has been in the past. Amazon's New York fail raises a question for governors, mayors and quasi-public economic development boards: Will they always be able to negotiate with the assurance that confidential deals will be swaddled in political support by elected officials hungry to take credit for new jobs?

It's hard to say how the City-County Council, for instance, might have responded to a deal to bring Amazon to Indianapolis, because none of its members were looped in on the bid. In one small indication of potential opposition, Democrat Jared Evans signed onto economist Richard Florida's petition encouraging governments to exit the incentives arms race.

Evans also was a critic of a $30 million retention incentive that Indianapolis Mayor Joe Hogsett's administration awarded to Corteva, a company that is emerging out of the DowDuPont merger. The council late last year approved that deal, with Evans' vote, but other council members were unmoved by the argument that Indianapolis would lose Dow AgroSciences' 1,400 jobs if the proposal failed.

The deal passed by an 18-7 vote, with several council members expressing fatigue over such must-pass incentive agreements.

It would be a stretch to argue that government officials might have rejected a deal to land tens of thousands of high-paying Amazon jobs. It's one thing for New York to turn its back on such an opportunity. But Indianapolis isn't quite so well endowed with corporate prosperity.

Then again, it's also a stretch to assume that Amazon seriously considered coming to Indianapolis in the first place. If there is to be a showdown over corporate subsidies in Indianapolis, it likely will be waged over a lesser prize.

One good way to avoid the blowback that doomed the Amazon deal in New York would be to increase transparency in economic development. There is no clear reason at this point why the city and state are refusing to make public the deal that would have been offered to Amazon.

Many cities and states disclosed that information during the HQ2 bid process. Other locations that were under consideration, including Nashville and Pennsylvania (which negotiated on behalf of both Pittsburgh and Philadelphia), have revealed their offers since Amazon made its decision in November.

The Indy Chamber has maintained secrecy while insisting the Central Indiana bid would have been reasonable in the context of other multibillion-dollar offers.

"I'm very comfortable in saying we did not get to the top 20 due to a dollar amount that may have been discussed by other communities," Maureen Krauss, the chief economic development office for the Indy Chamber, told me in November. "Our position was not incentive driven."

Amazon made a similar case Nov. 13, the day it announced plans to open offices in New York and suburban Washington, D.C. Jay Carney, the vice president of global corporate affairs for Amazon, appeared on CNBC and was asked about the ever-present HQ2 subtext.

"Look, incentives are part of the process in every major city across the country when they're trying to lure investment," Carney said. "I think that what you'll see is if you look at some of the proposals that were put forward by cities that released them publicly, you can find out very quickly that incentives did not drive this process for us."

Three months later, here we are. Amazon bailed on New York when faced with the mere possibility that its incentive package could fall apart.

That decision exposes a reality that cynics suspected all along: Amazon's HQ2 search was, in large part, always about the incentives.

That's all the more reason why Indianapolis taxpayers should at least know what their city and state were willing to give Amazon.

Call IndyStar reporter James Briggs at 317-444-6307. Follow him on Twitter: @JamesEBriggs.