In New York Law Journal and Vice, Professor David Reiss Takes Critical Look at States’ Deal with Amazon

Are incentive-laden deals that cities offer to lure big companies, such as the one Amazon recently struck with New York City and Northern Virginia, worth the costs imposed on state and local governments? In a commentary that appeared in the Nov. 21 edition of the New York Law Journal, Professor David Reiss, an expert in Real Estate Finance and Consumer Finance Law and founding director of the Law School’s Community Development Clinic, addressed this question and suggested that cities would be better served working together rather than competing against each other.

Positing that such enormous incentive packages are not necessarily worth the cost and may never be recouped, Reiss cited as an example Wisconsin’s $4 billion deal with Foxconn. “[T]axpayers are subsidizing each [newly created] job by well over $300,000 each,” he wrote. “Nonpartisan analysts have determined that it will take decades, at the earliest, for Wisconsin to recoup its ‘investment.’” Reiss pointed out that “monies spent on attracting a company is money that can’t be spent on anything else…public schools, mass transit, roads or affordable housing in many communities.”

In a Dec. 6 article in Vice, “Amazon Is Bringing in Elite Lobbyists Amid Seething Rage Over HQ2,” Reiss opined on the possibility that interest groups could bring suit over Amazon’s deal with New York. “These suits can slow down or even stop projects—and can give community members leverage with the City, State and project developers,” he said.

A Fellow of the American College of Real Estate Lawyers, Reiss serves as Academic Programs Director of the Center for Urban Business Entrepreneurship (CUBE). He is a frequently quoted expert on legal developments in the real estate finance sector and has written a regular column for The Hill. His popular blog, REFinBlog, offers a roundup of developments in the law and practices related to the real estate finance industry. He is the author of the forthcoming book, Paying for the American Dream: How to Reform the Market for Mortgages (Oxford University Press, 2019).

Read the New York Law Journal column here.

Read the Vice article here