Amazon has confirmed the big economic development rumor of August: the online retailer is bringing a warehouse to Sioux Falls, promising 1,000 jobs and an infusion of $200 million in private investment.
And of course, Amazon can’t do it alone. The project is part of a pitch for a federal subsidy:
According to documents obtained Monday by [that Sioux Falls paper], Seattle-based Amazon joined a combined effort with the city, several state agencies and the Sioux Falls Development Foundation in requesting $1.9 million in grant funding from the U.S. Economic Development Administration,
The money would be used to build out and add infrastructure and utilities for Foundation Park, with Amazon signing on to the grant application as a beneficiary. Amazon told federal officials the facility would serve as a hub of economic growth [“Report: Amazon Commits to Build New Facility in Sioux Falls,” AP, 2020.08.31].
The Sioux Falls Development Foundation is also looking for local tax dollars to support the expansion. It wants to be able to deprive Minnehaha County of the full tax benefits of the Amazon development by diverting any new tax revenues toward paying their own building costs first:
The foundation will ask the City Planning Commission and Sioux Falls City Council to approve tax increment financing for the northwest Sioux Falls development park, which would allow for infrastructure to be installed on the north end of the property.
…A TIF district works by allowing the applicant – in this case the Development Foundation – to use the difference between property taxes paid on the base value of a property and the property taxes paid on the value of the same property once improvements such as buildings are made. That difference – the increment – could be used for improvements such as utility work, roads, lighting or landscaping.
…Approving a TIF is a multistep process, and the first step is establishing the boundaries of the district, which is what the Planning Commission will be asked to consider at its Sept. 2 meeting [Jodi Schwan, “Development Foundation Seeks Tax Increment Financing to Further Develop Foundation Park,” Sioux Falls Business, 2020.08.28].
You’d think that Amazon, with a 40% increase in sales and doubled net income in Q2 2020, could roll in and build a warehouse without any government subsidy. But evidently even the most successful capitalists depend on socialism to expand their empires.
Bezos probably earns at least 1.9 million bucks every minute of the day. He can pay his own way and then some and then some more and then even more.
Socialism for the elite.
How much will the starting wages here be 20 bucks an hour I hope to start.Pay a liveable wage, so teachers can come and work here.
I question the conclusion that
This type of government funding for Amazon seems more a “subsidy” than “socialism.”
The statist definition seems more consistent with what most economic writers have described as “socialism.” In short, as far as I can tell “socialism” has little or nothing to do with transfer payments of government revenue to private individuals or to businesses absent the government obtaining an ownership interest in the individual or business in exchange for the transfer.
Thus, so called economic incentives such as TIFs don’t seem to fit within either of the above definitions of “socialism.” The conservative misuse of the the term as a meaningless “bogyman” continues to confuse our mainstream language.
The linked article argues that the misuse of of the term “socialism” is backfiring on conservatives.
Whatever the reality, it would seem that misuse of of such economic terms undermines the attempted clarity of language.
Well, we do have to dumb down everything for Republicans. They don’t know socialism from kleptocracy, so we use “socialism” as a way to communicate with the dumb crowd.
I read somewhere that Bezos is forecast to be the first trillionaire. I think that’s a bit exaggerated. It’s a long way from billion to trillion.
Nonetheless, he is despicably greedy and lacks the decency to be ashamed. He’s acquired his wealth on the suffering of those he under pays, under benefits, under protects and over works.
That is shamefully despicable.
Just to clarify a couple of things; 1. Amazon is building their facility TIF or not. In fact, I am told I may be moving equipment to the site on Friday to start working on it Tuesday. 2. The TIF as currently structured will benefit the SFDF by allowing them to expand the park BEYOND what it currently is for future development, NOT where Amazon is currently building. THAT infrastructure is already a done deal.
One more thing – TIFs are tax dollars collected from the property that are directed to paying for the infrastructure necessary to support the properties development. Once that infrastructure cost is paid for by the collected tax dollars – the TIF expires and the same tax dollars go into the general fund. In any case, TIFs have date certain expiration dates. If the infrastructure costs are NOT covered by the INCREASED tax dollars coming from the development, the developer is on the hook for the balance, and the tax dollars from that property go back into the general fund.
would it be like a farmer getting crop insurance and crop subsidy but that would not be socialism, but everything else is.
Governor Kristi Noem says her office was “heavily involved” in months of discussions to get Amazon to come to Sioux Falls.
Meanwhile, KFGO reports today that Amazon is going to build a similar warehouse in Fargo, north of the Hector International Airport and the I-29/I-94 intersection. “Amazon has reportedly not asked for any local tax breaks.”
Good for the Fargoans. Those fellows have no taxes or hills.
They are also building an identical facility in Lakeville, MN. We bid on all 3. Got one. BTW, the fact that the company I work of is even involved at all is indicative that the ground the building is going up on has some stability problems that are beyond normal. That in itself is one of the reasons TIFs were originally designed to address. I.E., the extra costs associated with development of difficult sites.
ps, grudz, I am in Fargo working on a project right now. They have a LOT of unstable soils up here.