State & Local Government Policy, Business and Technology

Some of Amazon's Suitors Have Been Burned Before

Stateline: Given its history, perhaps New York should be wary.

A decade ago, New York state granted aluminum producer Alcoa a 30-year discounted electricity deal worth an estimated $5.6 billion. In exchange, the company promised to retain 900 existing jobs in Massena, near the Canadian border, for three decades. By 2014, the jobs were down to 750.

That’s when Alcoa came back for more, saying that without state help it would have to lay off 487 workers. New York responded with another $73 million in power subsidies. Under the latest deal, the company will have to pay a $40 million penalty if the number of jobs slips below 600, and the state subsidies will decrease if the price of aluminum rebounds.

The $5.6 billion Alcoa deal ranks as the second largest subsidy package a company has ever received in the United States, according to Good Jobs First, a nonprofit that has studied such deals over the past four decades. In total dollars, New York state (and cities in the state) offered more in incentives than any other state since 1976, often in large packages to single companies.

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