DMI Blog

John Petro

Jetting out of Queens

Happy Jetting? The airline carrier JetBlue, which has called Queens, New York its home since its founding in 1999, is considering relocating its headquarters once its lease expires at its current space in 2012. The airline has stated that it is “investigating possible new locations within the New York metropolitan area, as well as sites outside of New York.”

If JetBlue moves out of Queens, the 400 jobs at its current headquarters could be “Jetted” out of the city. Additionally, the airline is considering consolidating its other locations in the metropolitan area, one in Garden City, New York and one in Darien, Connecticut, into a single location. All together, the three locations represent 800 jobs.

The New York Daily News reports that the city is currently coming up with an incentive package that would entice the airline to stay in the city.

City officials refused to discuss specifics of the offer it plans to make, noting JetBlue's request for proposals swore them to secrecy.

"We have a proposal that we will be submitting to JetBlue and we remain deeply committed to helping them continue to grow and thrive in New York City," said David Lombino, a spokesman for the city Economic Development Corp.

Unfortunately, this game is far too common – and far too costly – to the cities and states that are forced to play it. A corporation threatens to move from its current location. Other cities and states perk up their ears and offer up tax breaks and other incentives. The outcome is that the city and its taxpayers lose while corporations win.

It’s hard to blame the corporations. Who would turn down free money? And it’s hard to blame cities or states who must participate in these corporate giveaways or else face job losses.

Some cities are taking steps to ensure that they are at least getting some benefit from the whole process. Minneapolis requires that developers or corporations that receive development subsidies pay at least a living wage to their employees. Minneapolis also attaches job creation quotas to its development subsidies. The best part is that if a corporation does not live up to its job creation quota or decides to leave town, the city can use “clawbacks” to make the recipient pay the money back.

In the end, JetBlue will probably decide to keep a significant number of jobs in the area. The company just opened its $743 million terminal at JFK International Airport in Queens. But that won’t stop the economic subsidy game.

John Petro: Author Bio | Other Posts
Posted at 5:50 PM, May 11, 2009 in Economy | Employment | Urban Affairs
Permalink | Email to Friend