State leads with talent in Amazon bid
The Denver Post
There were no promises to turn property into the city of Amazon, Colorado. There were no bribes like the 21-foot cactus an Arizona city sent to get the massive retailer to build a second headquarters there. And there was no way Colorado was going to touch one state’s lavish offer of $7 billion in public incentives.
Colorado, which doesn’t plan to ask taxpayers for more funding to lure Amazon, submitted a more subdued proposal on Wednesday that it hopes will attract a new employer and bring up to 50,000 jobs to the Denver region. The state emailed the official bid a day before Amazon’s deadline, plus it mailed five paper copies overnight to the Seattle retailer’s headquarters.
“Colorado’s proposal does not lead with incentives. It leads with talent,” said Sam Bailey, who led the Metro Denver Economic Development Corp. that worked with the state to submit the official bid. “Ultimately, 50,000 jobs shouldn’t be led with incentives but a community that has the resources to support it.”
The state offered Amazon the usual public incentives — its Strategic Fund Incentive, which set aside about $10 million to recruit large employers; and its Job Growth Incentive Tax Credit, which has no cap.
But because Amazon declined to share how it would ramp up hiring over 10 to 15 years, Bailey said the state cannot make accurate calculations, but based on the past, state performance-based incentives could be “in excess of $100 million,” he said. Amazon, which would need state approvals on incentives, would also only collect the credits if it actually hires workers within certain time limits, which is usually eight years. Amazon has said it could hire 50,000 people at its “HQ2” over a 10- to 15-year period.
“Based on projections, net new jobs and wages, the incentives that the company may apply and be eligible for could be in excess of $100 million in performance-based tax credits,” Bailey said. “The disclaimer is that we do not have a defined amount. It’s subject to further due diligence.”
Colorado took a unified approach to Amazon’s request, by vetting 400 documents from cities and counties interested in hosting an Amazon HQ2. The state picked eight urban and suburban sites that met Amazon’s request-for-proposal requirements and pitched all of them equally.
Citing a nondisclosure agreement with Amazon, economic development officials have declined to divulge the final sites forwarded in the proposal. Another reason for the tight lips: Colorado has lost major headquarters before amid competition and discord among local cities, and officials wanted to avoid that this time. While many cities and states vying for Amazon’s HQ2 have not released details, others have been less discreet.
Developers have named as possible contenders the burgeoning River North neighborhood in Denver; the area southwest of interstates 70 and 25 where The Denver Post’s former printing plant is located; undeveloped land near Denver International Airport; the former StorageTek/Phillips 66 campus in Louisville; the former Gates Rubber plant at South Broadway and I-25 in Denver; and the parking lots at Elitch Gardens and Pepsi Center near downtown.
Because of Amazon’s requirements — including a location within a 45-minute drive to an international airport — several cities in Colorado were immediately eliminated as primary sites, including Colorado Springs, Durango and Grand Junction.
Unlike those publicizing billion-dollar incentives, Colorado pushed the lifestyle, the workforce and the benefits of being in the state.
“We all have the understanding that Colorado can offer Amazon a complete package. We don’t have to compensate with some of the things that other cities are offering. We have a high quality of life, a highly educated workforce and, of course, we meet the criteria of the RFP,” aid Andrea Tilliss, marketing manager for Aurora Economic Development Council, which has no idea if any of its submitted sites got into the official state proposal. “This is one unique thing Colorado has and Aurora has. We do not put bags of money on the table and push it across and say, ‘Go.’”
If Amazon only cared about the amount of taxpayer incentives for HQ2, Newark, New Jersey, would likely win. The East Coast city on Monday offered a $7 billion package with the state to attract the retail giant as Amazon’s HQ2 deadline winds down today.
But in the high-stakes game of who can offer the most public incentives, the economic-development frenzy has begun. Here’s a roundup of who is offering what:
Newark — The $7 billion proposal consists of $5 billion in state incentives over 10 years if Amazon creates 50,000 new jobs. The city of Newark has offered $1 billion in local property tax abatement, plus waving $1 billion in wage taxes for Amazon employees over 20 years. New Jersey’s Economic Development Authority estimates attracting Amazon would create “over $9 billion in economic benefit” for the state.
Chula Vista, California — The San Diego suburb, with a population of 267,000, voted Tuesday to offer Amazon a $400 million incentive package that includes “shovel-ready office location and the opportunity to co-create California’s next university.” The city, on the San Diego Bay, posted its proposal online, at ChulaVistaCA.gov/home/showdocument?id=15602
Worcester, Massachuesettes — The state’s second largest city to Boston is offering $500 million in local property tax relief plus a $1 million loan that will be forgiven if Amazon hires at least 100 people, according to the Boston Globe, which also posted the city’s pitch. The newspaper also reports that at least 10 areas in the state will make their own bid to Amazon.
Minnesota — Like Colorado, Minnesota has limits on how much it can offer in public incentives. According to the Star Tribune, that’s a $3 million spending cap.
Seattle — Home to Amazon’s current headquarters, Seattle wasn’t going to be left out of HQ2, though it did not share details about its bid. The state of Washington, however, did offer $8.7 billion to Boeing back in 2013 even though that company has since cut jobs.
Memphis, Tennessee — The city government voted to offer Amazon $60 million in cash incentives, which includes $5,000 per job created (or $50 million total) plus $10 million in other incentives, according to the Commercial Appeal. Additional public funding could come from the state and county.
Atlanta — With job wage tax credits of up to $850 million from the state of Georgia, the city’s proposed incentives could reach in the billions, according to the Atlanta Journal Constitution.
Detroit — Submitting its top-secret bid on deadline day, Oct. 19, according to the Detroit Free Press. Gov. Rick Snyder told Crain’s Detroit Business that he won’t ask the state Legislature to approve additional incentives just for Amazon.
Tuscon, Arizona — Sent a 21-foot saguaro cactus to Amazon, which rejected it.
Stonecrest, Georgia — Voted to de-annex 345 acres and create the city of Amazon, Georgia.
Charlotte, North Carolina — Basketball legend Micheal Jordan asked Amazon CEO Jeff Bezos to pick Charlotte.
Chicago — Submitted its bid on Monday but revealed few details.
Washington — Mayor announced four potential sites on Monday.
Philadelphia — Offered three sites.
San Diego — Offered four sites.
San Antonio — Said no thank you to Amazon.
San Jose, California — Will not offer any subsidies to Amazon with San Jose Mayor Sam Liccardo writing an OpEd in the Wall Street Journal citing expansions of Adobe, Google and Apple that were completed “without a single cent of taxpayer money,” he wrote.
Frisco, Texas — About 30 miles from the Dallas/Fort Worth International Airport, the city of Frisco created a video and offered to build its city around Amazon.
Ottawa and Gatineau, Canada — The two Canadian cities partnered up to pitch their tech workforce, bilingual population and higher education, but said they won’t offer the billions in incentives that some U.S. cities can, according to the Ottawa Business Journal.
Ontario, Canada — Offering “sensible incentives” and not billions of dollars, according to CBC/Radio Canada. Did commit to investing $30 million in artificial intelligence graduates to help attract companies like Amazon. And since software programmers are paid 34 to 38 percent less than those in Boston or New York, Ontario’s organizers said Amazon would save $1.5 billion in annual salaries if it located in Toronto, which is in the Ontario province.