Twin Cities cut from Amazon’s HQ list

The Twin Cities are out of the running as site of Amazon’s new HQ.

Today, the company announced which 20 metropolitan areas of the 238 which submitted tenders had made the first cut. These are Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County, Md., Nashville, Newark, New York City, northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto, and Washington.

As the Star Tribune reports,

The failure to make even the list of top 20 prospects for Amazon is sure to spark recriminations and introspection about Minnesota’s ability to compete in economic development, however.

The state government has little to spend for recruiting corporate expansion and relocation projects, and state lawmakers have shown little interest in raising incentives at a time when the state’s labor market is so tight. In the past 10 years, however, states around the U.S. typically offered $30,000 per job in incentives to companies making expansions or relocations, according to multiple studies and a Star Tribune review of Good Jobs First data. Neighboring states Iowa and Wisconsin have been far more successful in recent years in landing corporate expansions.

At least nine of the cities on Amazon’s list of 20 offered incentives of more than $1 billion, according to a Star Tribune list of the competing proposals.

We don’t yet know why the Twin Cities failed to make the cut. As my colleague John Hinderaker explained recently, perhaps we shouldn’t be surprised given their ongoing failure to attract tech jobs. Given the wide diversity of places that remain on the list – Austin and Chicago, Newark and Raleigh – it is too early to draw any conclusions. Amazon is set to announce the winning bid later this year. When it does, and explains its reasoning, it should give Minnesota’s policymakers some food for thought.

John Phelan is an economist at the Center of the American Experiment.