Startups

Cleveland offered $120 million in freebies lure Amazon to the city


A Cleveland.com article detailed the lengths the small midwestern city would go to lure Amazon’s in 50,000-person HQ2. In a document obtained by reporter Mark Naymik, we learn that Cleveland was ready to give over $120 million in free services to Amazon including considerably reduced fares on Cleveland-area trains and buses.

The document, available here, focuses on the Northeast Ohio Areawide Coordinating Agency (NOACA)’s ideas regarding the key component in many of Amazon’s decisions – transportation.

Ohio has a budding but often tendentious connection to public transport. Cities like Columbus have no light rail while Cincinnati just installed a rudimentary system. Cleveland, for its part, has a solid if underused system already in place.

That the city would offer discounts is not surprising. Cities were falling over themselves to gain what many would consider – including Amazon itself – a costly incursion on the city chosen. However, given the perceived importance of having Amazon land in a small city – including growth of the startup and tech ecosystems – you can see why Cleveland would want to give away plenty of goodies.

Ultimately the American Midwest is at a crossroads. It could go either way, with small cities growing into vibrant artistic and creative hubs or those same cities falling into further decline. And the odds are stacked against them.

The biggest city, Chicago, is a transport, finance, and logistics hub and draws talent from smaller cities that orbit it. Further, “smart” cities like Pittsburgh and Ann Arbor steal the brightest students who go on to the coasts after graduation. As Richard Florida noted, the cities with a vibrant Creative Class are often the ones that succeed in this often rigged race and many cities just can’t generate any sort of creative ecosystem – cultural or otherwise – that could support a behemoth like Amazon landing in its midst.

What Cleveland did wasn’t wrong. However, it did work hard to keep the information secret, a consideration that could be dangerous. After all, as Maryland Transportation Secretary Pete K. Rahn told reporters: “Our statement for HQ2 is we’ll provide whatever is necessary to Amazon when they need it. For all practical purposes, it’s a blank check.”



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