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Illustration: Lazaro Gamio/Axios

When you are a second-tier city, courting a Big Tech company can backfire.

  • As we've reported, cities have struck big-ticket deals with tech companies, but typically surrender tax and other subsidies, only to have the incoming firms frequently fail to deliver.
  • And second-tier cities across the country have made themselves labs for the nascent driverless car industry. Those experiences have sometimes led to tragic outcomes, including a June 2018 fatal accident in Tempe, Arizona, where a woman was hit by an Uber driverless car.

For the Big Tech companies, the payoff is usually data. In its recent search for an HQ2, Amazon solicited applications from 238 cities, large and small. On the way to settling on New York and a Virginia suburb of Washington, DC, Amazon ended up with a massive, granular database of American cities, a goldmine of inside dope as it expands.

But almost always, the smaller metros end up disadvantaged.

One city that spilled its secrets to Amazon: With big hopes for the $100,000-a-year jobs the company dangled in front of the bidding cities, Spokane, Washington, submitted a bid for HQ2.

  • Spokane's proposition, Mayor David Condon tells me, included the very practical advantage that it's affordable.
  • In the end, Spokane, a near sister city of Seattle five hours away from the main Amazon HQ, won a booby prize — an Amazon warehouse that will employ around 1,500 people at about $15 an hour.
  • And when it got the warehouse, the city built new infrastructure, Condon says — roads to accommodate increased truck traffic to and from the building.

Albuquerque is arguably better placed as a destination for Big Tech, with a population around 600,000 and four universities. Indeed, it has already attracted a handful of major satellite campuses, including a 3,300-strong Intel office.

But even Albuquerque gets played by Big Tech:

  • Instead of a Facebook office, it has a Facebook data center, which has created thousands of short-term construction gigs, but will ultimately employ just 300 people long-term.
  • And to get Facebook even to go that far required $30 billion in industrial revenue bonds on the company’s behalf, which will result in tax breaks over the next 30 years, per the Albuquerque Business Journal.
  • Meanwhile, there are side effects: Facebook has taken such a huge share of the city's construction workforce that airport renovations are delayed.
  • Netflix made waves in Albuquerque when it decided to put its North American studio headquarters in the city. It promised to spend at least $1 billion producing TV and movies in Albuquerque over the next decade. But Netflix paid just $30 million for the existing facility it will occupy, a complex that cost the city $91 million to build.

Albuquerque Mayor Tim Keller defends the Netflix deal: "No one has any bad taste in their mouth."

The companies did not respond to requests for comment.

Go deeper

Right-wingers making McCarthy sweat for future Speaker post

House Minority Leader Kevin McCarthy stands with his Republican colleagues outside the House on Nov. 17. Photo: Stefani Reynolds/Bloomberg via Getty Images

Right-wing elements in the Republican Party are complicating House Minority Leader Kevin McCarthy's attempts to become the next speaker of the House should the GOP take back the majority in 2022.

Why it matters: While McCarthy has worked carefully to build trust among the conservatives who tanked his chances at clinching the speakership in 2015, they're still circling ahead of the next Speaker vote in January 2023.

3 hours ago - Politics & Policy

Congress sprints to meet crush of deadlines

Illustration: Aïda Amer/Axios

Congressional leaders have been pushing off vital action for months — and a lot of it will catch up with them in December, which begins Wednesday.

Driving the news: Funding for the federal government is set to expire at midnight on Friday. There are also consequential deadlines related to the debt limit, President Biden's agenda and annual actions like voting on the National Defense Authorization Act.

3 hours ago - World

U.S. fears Iran won’t scale back to 2015 nuclear deal

Officials gather in Vienna on Sept. 29 for the first day of renewed nuclear talks with Iran. Photo: EU Vienna Delegation/Handout/Anadolu Agency via Getty Images

U.S. officials have extremely low expectations as world powers resume negotiations with Iran to curb its nuclear program, believing the Iranians aren't yet ready to negotiate seriously, Axios is told.

Driving the news: Senior officials in the U.S. intelligence community have assessed the new Iranian president, Ebrahim Raisi, thinks of his predecessor, Hassan Rouhani, as a weak accommodationist who negotiated a bad deal with the U.S. and other world powers in 2015.