In an ideal situation, that would absolutely be the case. The trouble comes when neighbouring suburban "cities" start competing against each other for the potential for a business like OP referenced.
Oftentimes these are just incorporated industrial areas with minimal housing and little/no incentive to invest in public services. The businesses in this city/township are certainly running the show, and the few people living within those borders have little to no incentive or ability to organize and work for change. Afterall - people with surplus money/time would choose to live elsewhere.
Its a vicious cycle to the bottom, since these types of cities/townships compete against the main city proper (in the case of large urban areas) or other nearby cities and towns that are actually trying to provide for their citizens.
>> How can a tax break be a net negative for the city if it creates new jobs in the city
Any time the costs to the city outweigh the benefit of getting those jobs. Industrial pollution can be a greater detriment than a handful jobs. Or the city can turn over land that would otherwise be put to other uses. Or the jobs might all be people who don't actually live in the city, saddling the city with resulting traffic/pollution issues but with no practical job benefits. I don't know or think that Peloton is going to do such things, but it is very possible for downsides to be greater than the benefit of creating jobs.
A classic example might be a distribution warehouse (not amazon, oldschool warehouse). Maybe there are five or ten people who work at the facility, but the city has to deal with a constant flow of trucks in and out. The downside of those trucks will probably be greater than the handful of jobs a warehouse may generate.
Things like Abattoirs, Textiles, and Paper Making are all considered light industry. If you've ever driven by one of these you may understand industrial pollution.
Assuming they're tax breaks on property taxes (since other than sales taxes, those are the most viable avenues for a city to tax), they would lose tax revenue on whatever property the factory is on (it is not the case that they wouldn't have been able to collect taxes on the business anyway, because the land they use is land they would have taxed had it been owned by someone else). So they may have to tax other businesses more to make up for it, which could drive those businesses away, or make them less competitive. Other businesses in the area can also be hurt by the presence of an employer who can offer higher compensation than they otherwise would be able to. And while hurting existing local businesses to bring in another could be worth it in the short run, in the long run pandering to a single company at the detriment of others could make you entirely dependent on that company and its fortunes.
* It sets a precedent for other companies to leverage the same tax breaks.
* Facilities still use public roads and infrastructure. A road with 50 more trucks per day deteriorates more quickly, but the facility isn't paying for that directly.
Cities typically don't collect income tax, so their ability to derive revenue from 'job creation' is limited. Especially if the people working those jobs are living/shopping in the next town over.
But that would create the moral hazard of paying people not to work and the entire economy would grind to a halt! Just like how restaurant owners have to start paying closer to a living wage now.
Sure. Wages are just one cost component. An example restaurant spends 32% of revenue on staff, 32% on food, 32% on overhead. The owner takes a 4% profit. Industry wages inflate by N%. There's not a one to one relationship between wages for dishwashers and hosts and the menu prices. The owner is free to make their own trade offs between holding the line on wage increases, passing through the cost, automating/reducing labor intensity, taking less profit, trying to negotiate no price increase from their vendors, etc.
Without the tax break, none of the new jobs would have been made in the city at all.