By at least one count, over 100 cities are vying for the 50,000 jobs at Amazon’s proposed $5 billion second headquarters. As cities put together their bids, here are some lessons we’ve learned about incentives from other corporate headquarters decisions.

Focus first on strategy

Incentives are meaningful but do not drive the decision to make an expensive investment in a new corporate headquarters. Companies choose to expand or relocate a headquarters to support their corporate strategy. Winning offers are aligned with that strategy.

For example, headquarters moves often occur as companies reorganize to serve new or growing markets more effectively. The location choices are frequently intended to signal or reflect corporate culture. And, of course, ensuring that the company is able to retain, attract and develop the right kind of talent to support its strategy is critical.

Amazon’s RFP includes an introduction to their four guiding principles. Take these seriously. As a publicly traded company, substantial information exists on corporate strategies and priorities.

Work together

As we’ve written before, coordinated state and local incentive offers are necessary for success. The RFP specifically encourages one response per MSA and cooperation among relevant jurisdictions. Recent successful headquarters projects have demonstrated a close level cooperation at the state and local levels.

A lack of cooperation or inconsistent messaging from state and local actors is a problem, as it would indicate difficulties for the company in the selection process, and, worse, going forward as it executes a massive, complex investment.

Prepare for transparency

This project and any associated incentive package will receive constant scrutiny. This is to be expected since the project will have tremendous economic and physical impacts in the community where it chooses to locate. Further, the incentive package is expected to reach billions of dollars. Taxpayers have a right to know how the specifics of the incentive package, its distribution over time, and the connection to the promised economic and fiscal benefits associated with the headquarters complex.

That does not mean it will be easy. Calculating and sharing complex financial information associated with incentive packages of this size, likely involving multiple jurisdictions, will create challenges for economic development organizations. It is worth thinking through now how that information will be collected and shared with the community.

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