Here Are The Most Outrageous Incentives Cities Offered Amazon In Their HQ2 Bids
Massive tax breaks, an exclusive airport lounge, and a William Shatner cameo for Star Trek-obsessed CEO Jeff Bezos.
Amazon’s competitive search for a location for its second headquarters — dubbed HQ2 — inspired a fierce bidding war. Dozens of cities across the US offered fantastically shameless incentives in an attempt to win the thousands of new jobs and $2.5 billion in economic investment the company offered.
This week, two cities, New York City and Arlington, Virginia, won the contest by coughing up over $2 billion in subsidies to the retail giant. (Nashville, which offered up to $15 million cash based on job creation, is also getting a smaller Amazon outpost.) Some of those cities’ citizens and local politicians are already protesting the monetary incentives officials presented to Amazon, a company that’s currently valued at over $1 trillion.
But cold cash wasn’t the only thing local governments used to lure Amazon. They made other desperate overtures as well — including exclusive Amazon-only executive lounges at local airports, a personal appeal from William Shatner himself, and relocation reimbursements for every migrating employee. In fact, we may never know the full extent of the incentives because several cities have kept their bids sealed in secrecy, and some city officials have signed nondisclosure agreements prohibiting them from sharing any related information.
Based on what we do know, here are some of the sweetest deals that cities on Amazon’s HQ2 finalist list offered the company.
The Georgia project overseeing Atlanta’s bid for HQ2 released its full proposal Tuesday, detailing more than $2 billion of taxpayer-funded incentives. Among the more eye-catching perks offered were an “Amazon Georgia Academy,” a state university–affiliated education program featuring 24-week boot camp programs for company employees; an exclusive lounge — with free parking — for Amazon executives at one of the busiest airports in the world, Hartsfield-Jackson International; and the possible addition of a car on Atlanta’s MARTA trains to help “distribute products around the city.”
Those perks came on top of more than $1.7 billion in tax incentives, largely from what the state called $1.3 billion of “mega project tax credits,” and an additional $87 million in local tax credits from the city of Atlanta. “I couldn’t be more proud of the efforts that were put forward by our state economic development team,” Georgia Gov. Nathan Deal said in a statement.
Boston did not offer the same billion-dollar tax incentives as the other HQ2 finalists, and instead hoped its pool of top university talent would be enough to draw the e-commerce behemoth. It didn’t work, and the city’s public proposal reveals a fairly tame set of perks when compared to other cities’ offers.
Aside from a commitment of $75 million in funding over 10 years to maintain home prices around the proposed 8 million square feet of development needed for HQ2, the city also offered about $13 million in “workforce training grants” to build a tech talent pipeline. Among the more interesting incentives: The city said it would help eligible Amazon employees purchase homes in Boston by providing zero-interest loans to help with down payments.
Chicago was willing to pony up to $2.25 billion in incentives, and potentially more. Half of that would be offered in the form of tax credits if Amazon met specified job creation goals, and $400 million would be allocated to infrastructure spending to improve roads, sewers, and other systems for the more undeveloped sites in the area.
The city attempted to appeal personally to CEO Jeff Bezos, a Star Trek fan, by enlisting actor William Shatner, who portrayed Captain Jim Kirk onscreen, to narrate its proposal video.
In its initial 1,300-page pitch, Columbus offered nearly a half-billion dollars. The Columbus Dispatch reported that the proposal granted Amazon a 15-year, 100% property tax abatement, which would save the company $456,750 per $1 million of investment during that period. It also offered a 15-year, 35% income tax refund, which amounts to up to $50 million annually and up to $400 million over 15 years, and a reimbursement of up to $75 million for site preparation. Amazon would have only received the grant if it agreed to a set of stipulations that included: creating 1,000 new full-time jobs paying at least $15 an hour for 35 hours weekly, $45 million in new payroll, and investing $50 million in property investments within the city after three years.
City officials also vowed to create a task force to prevent what Columbus refers to as “an unacceptable murder rate.”
Dallas offered a $600 million incentive package, including tax abatements, Mayor Mike Rawlings told reporters Tuesday. The city’s incentive package did not include a separate offer from the state, which could have amounted to as much as $500 million. Among Dallas’s other offers: a new university called “Amazon U.”
A portion of the city’s incentive package was tied to hiring locally and it would have required Amazon to commit $100 million toward addressing public education and homelessness.
Montgomery County, Maryland
Maryland lawmakers approved a whopping $6.5 billion in tax incentives for Amazon through a piece of legislation called the PRIME Act, which became the largest economic development package in the state’s history, according to the Baltimore Sun.
In addition to the incentives, the state also promised $2 billion in promised infrastructure and transportation improvements for the White Flint Mall area of Montgomery County, which Amazon had selected as a finalist for its second headquarters.
Amazon would only be given tax credits if it created at least 40,000 jobs that pay an average of $100,000 a year. The state also offered a state sales tax exemption on construction materials used to build the project, and it proposed a new annual tax credit equal to 5.75% of each new job’s wages.
Newark, New Jersey
During the HQ2 competition, Newark passed an ordinance that would offer up to $2 billion in tax incentives to any company that would build a headquarters in the city, create 30,000 jobs, and invest $3 billion over 20 years, according to NJ.com. Another ordinance allowed companies like Amazon to qualify for a 30-year tax exemption of up to $1 billion.
Philadelphia and Pittsburgh
Pennsylvania offered the internet shopping giant up to $4.6 billion in financial assistance, including $4.5 billion through a performance-based grant program and another $100 million to go toward transportation improvements, “to meet the needs of Amazon’s HQ2,” wrote Pennsylvania Secretary of State Dennis Davin in letters released earlier this week. “The grant will be made available on an annual basis for up to 25 years, and will be based on the amount of personal income tax collected annually from Amazon employees,” explained Davin in the Oct. 2017 correspondence to Amazon’s Office of Economic Development.
In the spring of 2018, City Council members discussed a bill that would place a 1% tax on new construction projects. Lawmakers added an exemption to the bill for areas that Amazon’s headquarters would move into.
Philadelphia officials spent an estimated $545,000 on research, marketing, and ads during its HQ2 proposal process. But that’s all we really know — in 2017, before the proposal process had begun, Pittsburgh city officials signed NDAs that would keep any offers to Amazon a secret for up to five years.
Toronto offered Amazon no incentives, in the most Canada move ever. Toby Lennox, the CEO of Toronto Global, which represents the business interests of Canadian municipalities, told the CBC, “Others may provide large subsidies and tax breaks, but like the Province of Ontario, we in the Toronto Region don’t want to play that game, and frankly we feel we don’t need to play that game.”
The nation’s capital offered a bevy of incentives, totaling $60 to $80 million per year for 10 to 15 years, for a total of $600 million to $1.2 billion, according to estimates from the Washington Business Journal. Offers included relocation reimbursements of up to $5,000 for each employee relocated to the District; wage reimbursements of up to $10,000 for each new hire or up to $30,000 for newly hired veterans; no increase in real property tax for five years; sales tax exemption for purchases of hardware and software; training tax credits of up to $20,000 for newly hired veterans; and 0% corporate tax for five years and a reduction in the tax rate from 9% to 6% for the life of the company.
Austin, Miami, Raleigh, Los Angeles, Denver, and Indianapolis
These finalists have kept their bids confidential, withholding pertinent details around how much officials were willing to subsidize Amazon’s move to their respective cities.
According to documents obtained by Community Impact, Austin’s Chamber of Commerce did not include an incentive package in its original proposal. The city declined to provide any additional information to BuzzFeed News.
Raleigh, North Carolina, hasn’t disclosed details of its Amazon bid. But that may not be for long: City officials are making records public “as soon as practicable, and within 25 business days,” citing a part of the North Carolina public records law. The North Carolina state budget from June 2017 may provide a glimpse into what was offered: Its legislature passed a grant to uncap funding maximums to any private company that invests at least $4 billion and creates more than 5,000 jobs for up to 25 years.
Details of Los Angeles’ proposal won’t be public anytime soon, a spokesperson for the Los Angeles Economic Development Corporation told BuzzFeed News. The organization, which submitted the proposal, is still under a nondisclosure agreement and it has no plans to release details of what it offered to Amazon. Gov. Jerry Brown told Amazon in a letter last year it could qualify for up to $200 million in tax credits and up to $100 million in workforce training funds.
Denver released a heavily redacted version of its offer to Amazon in November 2017. The redacted version did not disclose details about its incentive package. But it did note some possible incentives, including a job growth tax credit, job training grants of up to $1,200 per Amazon employee, income tax credits for locating in distressed areas, and in-state tuition benefits for company employees.
Indianapolis remains committed to keeping its Amazon bid a secret too. But Maureen Krauss, the chief economic development officer for the Indy Chamber, told the Indianapolis Star on Tuesday that the city’s offer did not stack up “compared to what we’ve seen publicly.” “I’m very comfortable in saying we did not get to the top 20 due to a dollar amount that may have been discussed by other communities,” she said.