- Amazon is considering 20 cities for its next headquarters location.
- To compete, contenders are offering Jeff Bezos’ company incentives worth millions.
- The online retail giant will make its choice by the end of 2018.
Amazon announced to the world in 2017 that it was looking to expand its physical footprint in a major North American city. Amazon’s HQ2, as it was dubbed, would bring with it an eye-popping campus, in which the company plans to invest over $5 billion and as many as 50,000 high-paying jobs.
Proposals flooded in, and from the 238 cities and regions that applied to be Amazon’s next home, the list was whittled down to the top 20 contenders announced in January 2018. Since then, cities have continue to up the ante as they compete for HQ2.
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For the chosen city, the massive addition of Amazon wouldn’t happen in a vacuum. The influx of people to HQ2 will have a trickle-down effect and significantly pump money into the local economy. One study conducted by the Maryland Department of Commerce estimated that HQ2’s impact in Montgomery County, Md. — one of the 20 finalists — would bring $17 billion annually and spur local entrepreneurship, restaurant spending, and construction, and attract increased transportation through the area’s airport and port.
Amazon HQ2: What the Possible Locations Are Offering
In an attempt to woo Amazon, many cities are throwing millions of dollars at the e-commerce titan in the form of incentives, whereas others are keeping the details of their bids under wraps. Here are the 20 finalists vying for Amazon’s HQ2:
Georgia’s capital is rumored to offer $900 million in public financing for a $3.5 billion development that includes “office towers, apartments, retail and hotels on a newly created grid of downtown streets,” the Atlanta Journal-Constitution reported.
Steve Adler, the mayor of the growing tech hub, has expressed that he was unsure his city wants to become the site of HQ2. The city’s initial bid didn’t include any incentives.
Boston maintains above the fray and has not publicly offered Amazon any special packages as of July 2018. It remains to be seen how the strategy will work out for Boston.
The Chicago Tribune reported that the city offered at least $2 billion in tax breaks. The package included sales tax and utility tax exemptions, property tax discounts and a $450 million grant for infrastructure spending.
The second-largest city in the Midwest offered 100 percent property tax abatement at all Amazon sites for 15 years. It also offered a jobs growth incentive for 15 years, with 35 percent of income taxes withheld on the payroll of Amazon employees; the payment amount is capped at $50 million in one year and $400 million in total, according to the proposal.
Electing not to play hardball, as of March 2018, Dallas has yet to up the ante and deliver a financial package at the feet of Amazon.
Due to state laws, Colorado could be limited as to what it can offer in tax credits and incentives. The proposal incentives could be valued at over $100 million and included a “job growth tax credit; job training grants of up to $1,200 per employee; (an) enterprise zone program offering income-tax credits for companies locating in distressed areas; in-state tuition benefits for employees; and local city incentives,” as reported by the Denver Post.
The political machine is at work in Indianapolis. The city’s financial package for HQ2 is shrouded in mystery, and The New York Times reported that members of Indianapolis’ city council are in the dark when it comes to details.
Amazon’s potential move to LA isn’t so popular among all of LA’s residents. The city has kept plan specifics under wraps, but the area’s bid teased that “costs and incentives” would be available to Amazon, the Los Angeles Daily News reported.
Miami offers Amazon a unique proposition: Florida doesn’t have state income tax. Miami’s millennial population is educated and the state’s public transit system makes traveling around a breeze.
Montgomery County, Md.
Maryland’s $8.5 billion package, aptly named the PRIME Act, included credits, incentives and grants, the Baltimore Sun reported.
City officials aren’t keen on playing hardball with Amazon — one of the proposals include a $25 million pedestrian bridge. The city is letting Nashville’s explosive growth and development speak for itself.
Newark is already home to Amazon brand staples like Whole Foods Market and Audible, and is looking to land the mother lode. With a $2 billion tax incentive, the city council approved “ordinances that would allow any corporate headquarters that creates 30,000 jobs and invests $3 billion over 20 years to qualify for tax breaks and a long-term exemption,” NJ.com reported.
New York City
No special tax incentives are being offered by the city as of April 2018, according to Business Insider, which also reported that the city has offered Amazon up to 62.5 million square feet of space for its headquarters.
A strong contender among speculators, Virginia has not released its Amazon proposal as of July 2018. USA Today reported that Northern Virginia had decided not to file a joint bid with nearby Washington, D.C., or southern Maryland.
Philadelphia’s proposed plans are closely guarded. Pennsylvania plans to offer tax incentives in excess of $1 billion, on top of what the city is offering, according to The Inquirer.
Pittsburgh is holding its cards close to its chest. Rumored to be offering as much as $1 billion in incentives, the Pittsburgh Post-Gazette won a right-to-know request in June, in which the city would have to release details of its HQ2 bid. In July, a state agency appealed, wanting to keep the information concealed.
A corporate reimbursement is available for up to 100 percent of the withholding taxes for the new jobs that are created. An undertaking like HQ2 could also qualify for up to a $50 million grant for infrastructure like water, sewer and rail access. To sweeten the deal, the One North Carolina Fund can award up to $5,000 per year, per job, for up to five years, according to The News & Observer.
The only Canadian city to make the short list, Toronto isn’t offering any direct tax incentives. However, Amazon’s employees would benefit from Canada’s universal healthcare and the weaker Canadian dollar.
Incentives have not been publicly released as of July 2018, but Washington is a speculated front-runner. Amazon founder and CEO Jeff Bezos owns a $23 million home in the district and owns The Washington Post.
The world continues to wait for Amazon’s next move. In May 2018, the company announced it had completed the process of site visits to the top 20 cities. To those anxiously awaiting the announcement, the company remains committed to announcing the city by the end of 2018.
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