Why Cities Can’t Stop Poaching From One Another


Location decisions often ultimately turn on quirks like the C.E.O.’s personal preferences. And most companies, including sports franchises, have higher priorities than tax breaks. Amazon’s request for bids was full of them: a specialized labor force, a good transit network, an airport hub, major universities to produce workers and amenities to keep them.

Consultants once had to contact cities to obtain all of that information, said Chris Steele, who runs the North American practice for the location strategies firm Investment Consulting Associates. Now much of it is easily accessible in public data. By the time consultants reach out to cities today, they really only need to ask two questions they don’t already know the answers to: What real estate is available? And what incentives are you offering?

“It’s created an illusion that incentives are much more important in the process than they really are, and/or that it’s the only thing communities have left that they can actually do something about,” Mr. Steele said.

Incentive deals also often include “but for” clauses, statements companies sign pledging that they wouldn’t come to town, or create these jobs, but for the incentives. Those lines offer political cover, too. And they further perpetuate the public belief that communities have to keep entering these bidding wars.

In San Francisco, Allen Jones believes the solution, at least with sports teams, is for more cities to make a pledge like Proposition I. Mr. Jones, a longtime San Francisco resident, wrote the ballot initiative.

“San Francisco has no excuse for taking from our neighbors when we have so much,” he said. And not long ago, he points out, the city was on the losing end of one of these deals, when the 49ers left Candlestick Park for a new stadium 40 miles south in Santa Clara County.

“If we didn’t like it being done to us,” Mr. Jones said, “why are we doing it to someone else?”


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