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How Amazon losing cities HQ2 can still win

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Only one city will win the second Amazon headquarters. But other cities can benefit from the process.

Some cities such as Denver, Philadelphia and Toronto say they have seen an increase in the interest of companies seeking to expand or relocate, after being named in the short list for The new installation of Amazon, called HQ2.

"The attention he has given us since the pre-selection is enormous," said Julia Sakas, spokesperson for Toronto Global, the group that organized the city's bid for HQ2. "It has literally put us on the radar of companies that may have never considered the Toronto Region."

Last year, Amazon received 238 proposals from large and small cities to host its next headquarters. Announced the best 20 candidates in January. The campus will cost around $ 5 billion to build and will create up to 50,000 jobs.

Some cities offered great tax advantages and benefits to Amazon for HQ2. For example, Newark, New Jersey, announced $ 7 billion in incentives to attract the company, while Maryland offered a package of $ 8.5 billion (Montgomery County is one of finalists).

Related: Texas city reveals why it lost Amazon HQ2 bid

"Many cities did an incredible amount of work for Amazon HQ2, and this [could] has distracted them from other economic development opportunities," he said. Nathan Jensen, professor at the University of Texas at Austin. "But using your information and marketing materials from the HQ2 offer could be an effective way to reuse some of the results of this hard work."

Cities like Toronto are also reusing the information they compiled for their Amazon proposals to help attract other companies. Since publishing the online offer in October, Sakas said it has been downloaded by companies and the public more than 15,000 times.

Some local organizations have already used the data of the proposal for research purposes.

Philadelphia has also experienced more interest from businesses, according to a spokesman for the city's Department of Commerce.

"The videos [we created for HQ2] were able to capture some of the best qualities of the city and highlight them in a way that was easily understood by people who may not be as familiar with Philadelphia compared to places like New York or Washington DC " said the spokesperson.

Several companies have referred to the Amazon tone of Philadelphia as a catalyst for their new interest in the city. One company, Elm Partners, a investment firm formerly established in London, is now moving to the city.

Denver also said it received a "significant" interest after the public launch of the short list, according to a spokesman for Metro Denver Economic Development Corp., the private organization that leads its HQ2 efforts. Denver did not disclose the incentives it offered.

Related: For aspiring Amazon HQ2, Seattle serves as a warning

Even cities such as Arlington, Texas, that are no longer in the race expect advertising around HQ2 to generate interest in your proposal site. Arlington offered up to 1.7 million square feet at Globe Life Park, home of the Texas Rangers baseball team, which will move to another stadium to house its new offices. The city submitted a proposal as part of the Dallas-Forth Worth bid for the facility. (Dallas-Forth Worth is still a candidate).

"We are open to business and we look forward to other large companies that want to see Arlington," said Mayor Jeff Williams.

However, some experts warn that the huge incentives offered to Amazon could set a worrying precedent for future projects.

"For many of us who study economic development, we are shocked by the responses of cities to Amazon HQ2, both because of the lack of transparency and the willingness to offer mass incentive packages," Jensen said. "I worry that the economic development incentives offered to Amazon HQ2 could be the new norm for some of these communities."

He added that a city or state should be careful not to grant so many tax benefits that would hurt the community in other ways. To pay for local tax cuts, cities may have to increase taxes elsewhere or reduce spending on public services such as education and infrastructure.

"This strategy of [cities] pursuing mega-businesses is striking and may allow politicians to claim credit for economic development, but it should not be the main objective of economic development," Jensen said.

CNNMoney (New York) First publication on May 17, 2018: 3:15 PM ET


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