(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said cities competing to land Amazon.com Inc.'s second headquarters may end up paying out more in subsidies than they receive back in benefits.
“I'm betting Jeff Bezos knows exactly where he wants to put his second headquarters and he's getting all the cities to compete on who can write the biggest check,” Kashkari said Friday in an interview on CNBC television, referring to the online retailing giant's chief executive. “I think that's a money-losing investment for tax payers.”
Officials from several U.S. cities and states are vying to land an estimated 50,000 jobs that would come with hosting the planned site. New Jersey is offering a $7 billion tax incentive to make Newark attractive, and Chicago and Montgomery County, Maryland also offered plans that could reportedly add up to billions of dollars of taxpayer subsidies.
Kashkari said the research director of the Minneapolis Fed, Mark Wright, told him their city had “dodged a bullet” by not making Amazon's list of 20 cities it is considering.
His voice adds to a growing chorus of criticism, including a group of high-profile economists such as Harvard University's Edward Glaeser and Columbia University's Jeff Sachs who have signed a petition urging cities to call a truce and stop offering the company massive incentives.
To contact the reporter on this story: Christopher Condon in Washington at ccondon4@bloomberg.net.
To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Alister Bull, Sarah McGregor
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