Tomorrow, local leaders will submit their case to Amazon that Baltimore should be the choice location for the company’s new headquarters (HQ2). This is a missed opportunity for Baltimore.
Rather than spending time and resources putting together a proposal to woo Jeff Bezos, city and state officials could have said, “No thank you, Amazon. It seems what you're looking for would not be in the best interests of Baltimore. We're going to put our energies elsewhere, envisioning strategies for development that would best benefit our citizens and provide incentives to for-profit and nonprofit corporations that are willing to work within the parameters we have set as part of a larger strategy based on our citizens’ needs and our plans for the future.”
Instead, by submitting their proposal — no doubt replete with the hefty tax incentives Amazon requests — Baltimore’s leaders are once again conflating benefits to developers with benefits to our citizens, prioritizing courtship of business over formulation of substantive vision for our city.
The tired argument in favor of municipal government abdicating its planning responsibilities to large corporations is based on vague notions of “economic development.” A successful company within our borders will bring needed jobs. Employees will pay taxes, and we’ll fix the city with those taxes.
This could be the silver bullet we’ve been waiting for, right?
Maybe. But not likely.
Let’s consider those new jobs Amazon promises. According to the Request for Proposals, HQ2 will create an estimated 50,000 jobs with projected annual average compensation of over $100,000, to vary depending upon prevailing local wages. The jobs will “likely” be in the realms of executive/management, engineering, legal, accounting and administration.
These jobs require advanced degrees. But 71 percent of Baltimoreans age 25 and older do not have a bachelor’s degree; 16 percent have not graduated from high school. These realities are important to consider when evaluating if HQ2 would meet our citizens’ employment needs. We should be courting companies our residents could actually work for.
Amazon employees from outside of Baltimore would need housing, and their purchasing power would raise housing costs for everyone else, contributing to our affordable housing crisis. Rents in Seattle, the site of Amazon’s existing headquarters, are reportedly rising faster than anywhere else in the country. According to an Abell Foundation report, 57 percent of Baltimore renters already pay more than they can afford for rent. Seattle locals call Amazon's expansion "Armageddon," thanks to rising housing costs, price of living, and traffic congestion.
But those high-earning new residents will pay lots of taxes, and that will fix everything, right? Well, not exactly. The way new tax revenue from big development projects makes its way to our poorest neighborhoods is labyrinthine at best. Direct investment in those neighborhoods would make a lot more sense.
But won’t Amazon pay lots of taxes? Probably not. The RFP asks municipalities to identify “incentive programs available for the Project at the state/province and local levels … (i.e. land, site preparation, tax credits/exemptions, relocation grants, workforce grants, utility incentives/grants, permitting, and fee reductions) and the amount” available, adding that the “initial cost and ongoing cost of doing business are critical decision drivers.” In other words, Amazon wants a good deal for its billion-dollar monopoly. “Incentives” here mean tax deals like the $660 million Baltimore is taking on in debt to help finance Under Armour’s Port Covington project (also Baltimore’s choice location for HQ2), in the hopes that it will see a return at some point. This is very risky business, especially when dealing with tech companies, which are infamously volatile. Without enforceable clawback provisions which tie tax credits to performance, corporations like Amazon can easily make promises they may not fulfill.
And what would HQ2 do for our city’s urban form? Baltimore’s Planning Department has spent the better part of the past decade rewriting Baltimore’s zoning code in an effort to make more walkable, mixed-use neighborhoods and encourage economic vitality in our communities. A sprawling office park may make for efficient business, but it does not make a vibrant city.
Saying “No thank you, Amazon” is an opportunity for Baltimore. Not an abstract Baltimore comprised of people some economist deems more deserving of our city, not the Baltimore that would be convenient and profitable to the CEO of a global corporation, but rather the Baltimore of the people who live in Baltimore now — the people who voted for the leaders who make decisions on their behalf. The people who breathe the life of our city.
Christina Schoppert Devereux (firstname.lastname@example.org), a native Baltimorean and former attorney at Community Law Center, studies Urban Planning at the University of Southern California’s Price School of Public Policy.