The worst possible outcome in the competition for Amazon.com’s second headquarters has already come to pass for the Twin Cities.
Never mind that Amazon picked 20 other places as finalists for a new facility and up to 50,000 additional jobs. And sure, it wasn’t any fun to read in the Washington Post that the Twin Cities is the “clear loser” of the race for Amazon HQ2 so far, out of 218 also-rans.
What’s far worse than anything that’s happened so far is that a once-in-a-lifetime economic development project has passed us by and it seems doubtful there’s anything to be learned from the experience.
What are policymakers expected to do with news that this region doesn’t appear all that attractive to a fast-growing technology company, while places like Columbus, Ohio, and Indianapolis do?
Are we to conclude that the Twin Cities just isn’t big or vibrant enough? That would mean any economic growth scheme no matter how nutty should be pursued. But of course, Nashville made the cut and it’s roughly half the size of the Twin Cities.
Invest in education and training? That’s a perennially fine policy idea, yet not only is Nashville a lot smaller than the Twin Cities, it trails in the percentage of adults with at least a bachelor’s degree. Some of the other finalists for the Amazon project do, too.
If the analysis of a highly skilled workforce included all the project managers, product managers, database managers and all the other high-skilled people working at Minnesota’s 18 Fortune 500 companies, Nashville also trails there. The presence of big corporate employers based in the Twin Cities helps explain why median family income in the Twin Cities is 22 percent higher than it is in greater Nashville.
The availability of transit featured prominently in Amazon’s criteria, so maybe our state has paid the price for having spent too little on public transit? But Atlanta made the list of 20 finalists, and according to census data, a lower percentage of workers in greater Atlanta get around on transit than do workers in the Twin Cities.
Metro Atlanta is also well known for how much time gets wasted going nowhere on its congested roadways, with the average time to get to work more than 25 percent longer there than it is for Twin Cities commuters.
Finalist Columbus has a far lower percentage of people who use transit, as well. And so few people bike to work there that in the census data there’s no bar on the graph for this category at all. The percentage of workers who commute on bicycles apparently was rounded to zero.
Scheduled air service? MSP handles roughly five times the passenger volume of John Glenn Columbus International.
Of course no one could ignore the cost of doing business, including personal income and business taxes, as Minnesota is a high tax state. Yet Boston is on Amazon’s finalists list along with Los Angeles. So are places with both high taxes and state governments so ineptly managed that if they were corporations they would be bankruptcy candidates.
Minnesota just was named the best-run state in the nation by USA Today.
And while on the topic of rankings, it was difficult to miss a prominent link at the top of the CNBC webpage that graded the relative merits of Amazon’s 20 finalists. A click on that button at the top would take the reader to CNBC’s 2017 ranking of best states for business, where Minnesota placed third.
A couple of additional clicks on that page take readers to CNBC’s best states to live in 2017. Once again Minnesota was third.
There’s one other big factor that might be making all the difference, and that’s taxpayer subsidies. It could easily turn out that the winner of this Amazon deal simply will have bought it by promising to shovel more taxpayer money to a company led by a guy with a 12-figure fortune, enough incentives that regional investments in transit or an educated workforce really don’t matter.
The details of what has been promised vary, but at the top of the list is New Jersey, with an offer to Amazon of $5 billion in tax incentives over 10 years. Meanwhile, the city of Newark offered a property-tax abatement worth up to $1 billion and another $1 billion in local wage tax breaks.
Minnesota’s proposal to Amazon seemed to be more of an offer to talk than a firm bid, noting that the initial phase of the project as outlined by Amazon might get $3 million to $5 million from state incentive programs plus some local support.
That would be a rounding error in an offer like New Jersey’s. But had our state promised $7 billion in taxpayer giveaways, there would have been a run on the pitchforks at Mills Fleet Farm as outraged taxpayers got ready to go to downtown St. Paul after dark to form an angry mob.
An executive of Greater MSP, the economic development group that handled Minnesota’s bid for the project along with the state, gently put off a conversation Monday by saying it was still too soon to share any lessons.
If anything is ever learned it will be worth sharing. But maybe it’s better to simply stop caring about what anyone at Amazon thinks.
After all there has only been one approach to landing big private employers that has ever really worked in Minnesota: That’s building them from scratch.