Big Question for U.S. Cities: Is Amazon’s HQ2 Worth the Price?

Dozens of cities are working frantically to land Amazon's second headquarters, raising a weighty question with no easy answer:

Is it worth it?

Amazon is promising $5 billion of investment and 50,000 jobs over the next decade and a half. Yet the winning city would have to provide Amazon with generous tax breaks and other incentives that can erode a city's tax base.

Most economists say the answer is a qualified yes -- that an Amazon headquarters is a rare case in which a package of at least modest enticements could repay a city over time. That's particularly true compared with other projects that often receive public financial aid, from sports stadiums to the Olympics to manufacturing plants, which generally return lesser, if any, benefits over the long run.

For the right city, winning Amazon's second headquarters could help it attain the rarefied status of "tech hub," with the prospect of highly skilled, well-paid workers by the thousands spending freely, upgrading a city's urban core and fueling job growth beyond Amazon itself.

Other companies would likely move, over time, to that city, including employers that partner with Amazon in such cutting-edge fields as virtual reality and artificial intelligence. Some Amazon employees would also likely leave the company to launch their own startups, thereby producing additional job growth.

In theory at least, those trends could help attract more highly educated residents in a virtuous cycle that helps increase salaries and home values.

"This definitely beats other deals that I have seen, to be sure," said Enrico Moretti, an economist at the University of California, Berkeley and author of "The New Geography of Jobs. "It would certainly increase the attractiveness of that city for other well-paying high-tech jobs."

It's that hope that has triggered excitement, from such metropolises as New York, Boston and Chicago to tiny Maumee, Ohio (population 14,000)....

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