How 12 cities are trying to woo Amazon’s $5 billion HQ2

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In the month since 238 cities submitted a bid for Amazon’s HQ2, few details have emerged as to what various cities and states have tried to entice Amazon with (except for a 21-foot saguro cactus, of course).

MuckRock, a journalism nonprofit, is trying to track down all 238 bids through Freedom of Information Act Requests. According to MuckRock, more than 20 cities or states have made their Amazon bids publicly available. It’s worth noting, however, that this map only counts cities or states that have responded to MuckRock’s request, or have released only part of their HQ2 bid.

VentureBeat read through 10 of the bids publicly listed on MuckRock’s website, as well as bids from Washington, D.C. and Camden, New Jersey, which appear to be full proposals. Two of the biggest contenders that have made their bids publicly available are Boston and D.C., which have a 7-in-1 and 14-in-1 chance, respectively, at being selected, according to gambling website Paddy Power.

Aside from those, however, most of the cities that have made their entire bid publicly available are the ones that don’t appear to have a realistic chance at landing HQ2. Either these cities are too competitive for talent and office space (San Francisco) or don’t have as large a population as Amazon is looking for (Edwardsville, Illinois, population 25,071). But looking at these unlikely bids can offer some ideas as to how other cities might be trying to woo Amazon.

Partnering with other cities to fulfill Amazon wishlist

In its Request for Proposal (RFP) document, Amazon stated that it is looking for cities that can support up to 50,000 full-time employees and up to 8 million square feet of office space once its HQ2 is complete. The problem is that the cities that are home to the most talent are generally some of the most popular places for new businesses and might not have enough available office space. Cities that have a lot of available office space likely have that space available because they don’t have a high density of businesses, and thus might not have a ton of top talent.

So, many communities that have a surplus of either talent or cheap office space have found themselves having to explain to Amazon how they can get the company access to the other resource.

The Bay Area — home to one of the largest concentrations of tech workers in the country — offered up a joint proposal on behalf of five different cities — Concord, Fremont, Oakland, San Francisco, and Richmond. While their proposal states that “any one city could accommodate Amazon’s needs,” it encourages Amazon to look at a solution that consists of “a combination of sites in multiple cities — all easily connected via BART.”

Meanwhile, the tagline for New Hampshire’s bid reads that the state offers “the benefits of Boston without all the headaches” — that is, that Amazon can have access to cheap rent and no income tax in New Hampshire, while recruiting talent from Boston.

However, not all of these proposed partnerships have been created solely to fill gaps in talent or office space. Some instead create unique opportunities for Amazon. Chula Vista, California, located 11 miles from Tijuana, Mexico, proposes partnering with Amazon to create a multi-institutional “binational” campus of higher education in Chula Vista. Amazon would partner with the city to select participating institutions.

Not creating special incentives — yet

With the exception of Newark, New Jersey, whose leadership offered Amazon $7 billion in tax breaks, many cities are not offering up incentive packages yet beyond those offered through pre-existing state or city programs. Of the publicly available bids listed on MuckRock’s site, Chula Vista has one of the largest incentive packages created specifically for Amazon, at $400 million. The package pledges to provide Amazon with $100 million worth of property as well as 30 years of property tax abatement, among other perks.

However, it’s worth noting that many cities and states already offer generous incentive packages for corporations. Massachusetts, for example, has an Economic Development Incentive Program. In exchange for “substantial job creation,” a municipality “may provide a business with real estate property tax relief based on the business’s incremental real estate property taxes for up to 20 years.”

Additionally, these proposals don’t close the door to offering any additional tax breaks to Amazon — they’re just not offering them yet. Boston’s section on incentives, for example, gives a list of state and city programs that Amazon can take advantage of, and then states that “Boston looks forward to discussing this chapter in further detail with Amazon.” Given that there are 238 cities and regions vying to woo Amazon, it’s likely that as Amazon gets closer to selecting one location, it will go back to some of its finalists and ask their governments for more incentives.

But not all cities are taking the bait. One of the most unique incentives packages on the table comes from Fresno, California, which offers Amazon no tax breaks. Instead, Fresno proposes setting up an “Amazon Community Fund.”

“Today, cities with thriving technology companies, such as the Bay Area, are grappling with the hyper-growth that accompanies that success,” the proposal states. “A lack of affordable housing, overworked infrastructure and strained public services are just some of the serious issues facing these cities. … The ACF would provide for an ongoing and sustainable source for the inevitable success that will result from the HQ2 project and would allow for the Amazon investment in its new headquarters to continue to prosper far into the future.”

All of the taxes and other local fees paid for by Amazon would go into the ACF. Amazon and the city of Fresno would then come to a joint agreement on how to use the money, though Fresno proposes the following breakdown:

  • 25 percent for workforce housing
  • 25 percent for transportation and infrastructure projects
  • 10 percent for parks and cultural amenities
  • 10 percent for STEM education projects
  • 15 percent to remain undesignated to address future unforeseen issues
  • 15 percent for traditional City and County services

Touching on multiple facets of Amazon’s business

Inside its proposed HQ2 site, Boston pledges to add 55,000 square feet of retail space that “provide opportunities for a range of customized Amazon spaces such as Amazon Go, Whole Foods and Amazon Books.” Meanwhile, Washington, D.C implies that Amazon can leverage the city’s ties to policies and institutions of higher education to help make policy changes. “Autonomous vehicles are an area where a university-based center funded or overseen by Amazon could unify policy and technical experts to accelerate the market by concentrating on infrastructure changes, insurance issues, and transportation laws,” its proposal states.

Amazon isn’t going to pick a location based on tax breaks alone. This is a company that has long favored growth over profit and didn’t report its first annual net profit until 10 years into business. As its recent acquisition of Whole Foods for $13.7 billion proves, Amazon is willing to spend a lot of money in order to gain an advantage in as many industries as possible.

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