After Chicago submitted its proposal to land Amazon’s second headquarters, Mayor Rahm Emanuel gave a detailed interview with the Chicago Tribune, describing eight urban and two suburban sites the Seattle company could consider. A letter penned by Emanuel and other lawmakers showed Chicago is offering at least $2 billion to attract the project.
The state of New Jersey said it would offer Amazon a whopping $7 billion in state and local incentives if it chose Newark. The city of Worcester, near Boston, said it is offering Amazon up to $500 million in local property tax breaks.
That’s hundreds of millions of dollars more than North Carolina has ever provided in incentives.
Of the 238 cities that have submitted bids to Amazon, several have described how much taxpayer money they would use to lure Amazon. Details on the incentives Charlotte is offering, however, remain a mystery.
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The N.C. Commerce Department has declined to provide details of the incentives package the state would provide for any of its bidding regions: Charlotte, Hickory, the Triangle and the Triad. Spokeswoman Beth Gargan said the negotiations over incentives will continue until Amazon announces sometime next year where it will locate its second headquarters.
Disclosing details of the incentives package, she said, “would frustrate the process” and put North Carolina at a “severe competitive disadvantage” with other bidding regions.
A spokeswoman from the S.C. Commerce Department similarly said they don’t comment “on projects we may or may not be working on.” (The Charlotte Regional Partnership, the group that submitted Charlotte’s bid, includes four South Carolina counties.)
The partnership is also “not at liberty” to disclose details of the incentives package, according to spokeswoman Dianne Chase.
The Economic Development Partnership of North Carolina, the public-private group that recruits businesses to the state, also said the details of the incentives deal would not be disclosed since the project is “active.”
“This is our customary practice in the early stages of highly competitive economic development projects, when disclosing too much information could allow another state to use that information to its advantage,” spokeswoman Mary Wilson said.
Other big offers
Amazon says it would invest $5 billion on its second headquarters, which would add up to 50,000 high-paying jobs over several decades. To land a project of this magnitude, it’s possible North Carolina would have to expand its incentives program.
Gov. Roy Cooper, Sen. Phil Berger and Rep. Tim Moore could not be reached for comment.
The state has already taken measures to boost incentives. A provision in the state budget in June provides enhanced incentives for companies that invest at least $4 billion and create at least 5,000 jobs. The money would be awarded through the state’s main incentives program, known as the Job Development Investment Grant. Funding wouldn’t be limited by the $35 million statewide cap on JDIG projects, so one massive project wouldn’t take up all the money.
North Carolina typically offers tax rebates worth millions of dollars to companies that move here, usually with a smaller matching amount from local governments.
The package the state offers Amazon could dwarf what it’s offered other companies in the past.
The largest incentives deal in state history was for MetLife, which is receiving $87.2 million over 12 years to open hubs in Ballantyne and Cary.
The state proposed $683 million in incentives to attract Boeing in 2013. (The company ultimately picked Washington state instead, lured by $8.7 billion over 16 years.)
On multiple occasions, North Carolina has been outbid by South Carolina, which has offered larger incentives packages and lower tax rates to companies such as the Keer Group and Giti Tire.
Offering incentives to businesses to locate in North Carolina, however, has been criticized as akin to corporate handouts. Those opposed to such deals argue that it’s impossible to know whether the money paid out will be worth it in the long term.
“Amazon is suggesting that money should be taken from businesses with roots in the local economy … and be given to them for HQ2, which will then compete with many of those very same small businesses,” wrote Julie Tisdale, president of the Raleigh nonprofit John Locke Foundation, in a recent blog post.
The right to know
Greg LeRoy, executive director of the Washington, D.C., group Good Jobs First, said he’s not aware of any restrictions Amazon has placed on the initial bids. Good Jobs First is a Washington watchdog group that tracks corporate incentives.
When finalists are announced, he said, Amazon may want to keep some proprietary information private. But that doesn’t apply now, he said.
For instance, Boston – which is believed to have a good chance of becoming a finalist – has released its entire 200-page bid to the public. Toronto also released its 190-page bid for all to see.
Local governments – or economic development groups, as in Charlotte – should release their proposals for several reasons, LeRoy said.
One is that they may be offering what he calls “super-charged” tax breaks. Another, he said, is that the public has a right to know what a city is offering and whether its proposal is effective.
In Charlotte’s case, the Regional Partnership receives $155,000 a year from both the city of Charlotte and Mecklenburg County.
It’s possible the Charlotte proposal is never seen by the public. If it was a city bid, state law requires that the proposal be released once the selection process is over. But the partnership could choose to keep the proposal sealed.
The partnership has taken the lead on the proposal with little input from the city or the county. City Council members and Mecklenburg commissioners have not discussed the Amazon proposal in closed session. John Lewis, executive director of the Charlotte Area Transit System, said he has spoken with the partnership about how transit could serve possible sites for the headquarters.
City Council member Julie Eiselt said she would like to know more about the partnership’s bid.
“We didn’t hear anything about it as far as council members,” Eiselt said.
She said she telephoned Crescent Communities, the developer building the massive River District site west of the airport that’s been mentioned as a possible Amazon site.
“I want to know about the sites,” she said. “We talk about the River District, and Crescent said they weren’t contacted. If they are offering the River District, we would want to know what Amazon could do to help complete a rail line out there.”
Many cities have kept their bids under wraps, as Charlotte has. Dallas, for instance, has not released its proposal. Houston has said it pitched a general area of the city known as the “Innovation Corridor” along its light-rail line for the company, but it hasn’t given specifics.
The partnership is holding a news conference Thursday to discuss its bid. But it’s unclear whether the group will discuss any specifics about what sites it has selected, or any other details of its bid.