North Carolina

$2 billion, HB2 reassurances and a site next to Dix Park couldn’t bring Amazon to NC

North Carolina was prepared to pay at least $2.2 billion in incentives as part of its unsuccessful attempt to lure Amazon’s expanded headquarters to Raleigh.

The figure, which would have included as much as $277 million from Wake County, was obtained from the state’s Commerce Department via a public records request.

The figure came from the Triangle region’s official submission to Amazon, which arrived at that amount under the assumption of “a 15-year ramp up of 50,000 jobs and a total investment of $5 billion,” which would call for “an estimated JDIG award (that) would be approximately $2 billion.”

The Raleigh-Durham area had been one of the 20 finalists for “HQ2,” which was referred to as “Project Smith.” Amazon, which is based in Seattle, ultimately chose to split its new headquarters between Arlington, Va., and the New York City borough of Queens, where it will add 25,000 new jobs in each location.

Amazon received $1.5 billion in incentives from New York, or about $48,000 per job, the company said in a release. Virginia gave Amazon incentives of up to $573 million, or about $22,000 per job, the company said. The average wage for both headquarters is expected to be $150,000.

Amazon executives visited the state in March, meeting with local university and business leaders and touring sites, including the Spring Hill area near Centennial Campus and the old Cargill plant near downtown Raleigh, as well as the Parmer site in Research Triangle Park.

According to emails from Christopher Chung, head of the Economic Development Partnership of North Carolina, Amazon was most interested in the Spring Hill site which straddles the eastern edge of Centennial Campus and the western edge of Dix Park. The emails also show that Amazon would not be looking further at sites in Research Triangle Park, but was “open to urban site options in downtown Durham if any can be identified.”

Those emails were in May, and Chung said Holly Sullivan, head of worldwide economic development for Amazon, had told him that the company was “many weeks away from further down-selection, let alone an actual decision.”

Amazon never formally told the state that it was out of the running, North Carolina’s Commerce Secretary Tony Copeland said in an earlier interview with The News & Observer.

Adrienne Cole, the president and CEO of the Greater Raleigh Chamber of Commerce, said in an interview earlier this month that Raleigh’s ultimate weakness was likely that it just wasn’t big enough. But despite not winning the Amazon headquarters, just being a finalist had benefits, she added.

“I think we are really becoming known as an innovation hub, and as a place that is great for information technology,” Cole said in an interview. “For companies that are looking across the country (for expansion), having the Triangle on (Amazon’s) list will make companies go, ‘Huh, we should consider that area, too.’”

Amazon’s visit to the Triangle

The Research Triangle Regional Partnership, which handled the region’s proposal sent Amazon a 102-page proposal that among other things pointed out that the Triangle’s diversity, lower cost of living, talent pool, quality of life, business climate and took on topics like HB2, the so-called bathroom bill head on. The proposal highlighted the Wake County Transit Plan several times, which will dedicate more than $1 billion in new local funds to triple bus service, create four bus rapid transit corridors and initiate a commuter rail line along an existing rail corridor between Raleigh and Durham within the next 10 years.

The proposal also included seven potential areas where Amazon could place its massive HQ2 campus, ranging from distant sites such as Chatham Park in Pittsboro to areas around downtown Raleigh.

The areas proposed were:

  • Park Center in Research Triangle Park
  • Downtown Raleigh, which would’ve included several sites, such as the Spring Hill site next to Dix Park, the old Cargill plant south of downtown, a smattering of smaller downtown parcels and parts of North Hills.
  • Chatham Park in Pittsboro. Chatham Park is a 7,095-acre planned community bordering Pittsboro’s historic downtown.
  • Parmer site in Research Triangle Park and downtown Durham. This site proposal would’ve split HQ2 between the Parmer site in RTP, a collection of former GSK buildings, and several properties in downtown Durham.
  • An area near WakeMed Soccer Park in East Cary
  • Wendell Falls in the Raleigh suburb of Wendell.
  • Veridea in Apex. Veridea is a 1,500-acre community in Apex

But, according to the itinerary of Amazon’s visit, representatives from the company only toured the Parmer site in RTP, both downtown Durham and downtown Raleigh, the old Cargill plant site south of downtown Raleigh and the Spring Hill site between Dix Park and Centennial Campus.

Amazon officials stayed at the Aloft Hotel near N.C. State University’s campus and ate dinner at the Bridge Club, chef Ashley Christensen’s event space above her Death & Taxes restaurant, in downtown Raleigh.

On HB2, ‘Project Bear’ and Nissan

The 846-pages of emails and other documents from the Commerce Department also revealed:

HB2 causes “heartburn.” According to emails from Chung to Copeland, North Carolina officials worried that it still had a perception problem lingering from House Bill 2, the so-called bathroom bill. “ ’NC has a good shot’ but HB2 is ‘still causing heartburn’ with their leadership,” Chung wrote summarizing conversations with Amazon representatives in September 2017. Chung suggested that “our proposals address other social legislation that the cities themselves have proposed or advanced to help with this perception issue.” The Triangle’s proposal ultimately included a testimony of how the business community came together to lobby for HB2’s eventual repeal and highlighted the region’s diversity.

“Project Bear.” Emails included in The News & Observer’s public record requests reveals that North Carolina officials are referring to Apple’s possible consideration of placing a campus in the state as “Project Bear.” Chung wrote in a May 2018 email to a Commerce Department official: “Right now, we don’t know how any decision by Apple might impact Project Smith (Amazon).”

Interest from Nissan? Another batch of emails in the request reveal that Gov. Roy Cooper had spoken with an executive from Nissan USA about the company’s potential interest in North Carolina. The state has been trying unsuccessfully for years to woo an auto manufacturer here.

“Wanted to let you know that our folks are working on the customized follow-up piece to be sent by the Governor to the Nissan USA executive he spoke with,” Chung wrote in a February 2018 email to a Commerce Department official. “We’re in contact with the local partners on getting together updated information around our megasites, as well as our automotive industry value proposition, and then you all can decide how much should be shared regarding potential incentives.”

Earlier this year, The Wall Street Journal reported that Nissan would likely build a new plant in the U.S. in four or five years. North Carolina came close to winning a Toyota-Mazda plant this year.

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