Re: I'd do it!
Sao Paulo is not the ideal choice - it is an expensive city with a lot of problems due to its intense growth in recent years. Try a 4 hour commute to work - one way - when you live in the same city as your office! People go to shop there, build a career early in their lives, then get out if they have the chance.
It is a bit of a distance (70km) from Santos, the states main port with substantial infrastructure.
A lot of companies relocated out to Blumenau, Florianoplis, etc in Santa Catarina, where the quality of life is much higher.
Politically, there is also the issue of a North / South divide - the North East needs some major investment to catch up with the industrialised south. Geographically, it is also much more suitable for international trade (I live in Recife, and it is the easiest place to fly to Europe or America on business, and has major trade through the port of Suape).
There are already some established initiatives in the North East (I myself will be setting up a software company based in Porto Digital, Recife, due to tax breaks and its own fiber internet ring, the city has 4G coverage, a good University for technology, active incubators such as SEBRAE, etc).
If I was making a decision to invest government funds, it would be in areas such as the North East that have potential but have (sometimes severe) problems with poverty, not the overcrowded cities such as Sao Paulo and Rio which have already been victims of success due to too rapid growth by over funding. You might not have seen it in the news, but Sao Paulo has basically run out of water due to 8 months of low rainfall...
http://www.independent.co.uk/news/world/americas/devastating-pictures-show-so-paulos-worst-drought-in-80-years-9821609.html