The bidding war for Amazon’s second headquarters began on Monday, and several cities have already submitted their proposals. New Jersey has submitted a bid for their city of Newark, offering up what could potentially be the greatest financial incentive for Amazon—$7 billion in tax breaks.
Just last month, Amazon announced a competition to source a location for their second headquarters. Dubbing it “HQ2,” Amazon is looking to spend up to $5 billion building the new hub, which will run in tandem with the Seattle-headquarters. The city lucky enough to land the gig would gain 50,000 jobs with an average salary of $100,000.
— Amazon News (@amazonnews) September 7, 2017
On the surface, Newark, NJ would appear to have everything Amazon is looking for. In the suburbs of New York City, Newark benefits from an extensive network of public transportation and even has its own airport. There are 60,000 students studying in six colleges and universities across Newark. This, combined with the proximity to other large metropolises like New York City and Philadelphia, means HQ2 would have an extensive talent network to pool from for future employees. Newark has some prime office space available for development, as well as more affordable housing than New York City or Jersey City.
Monday, New Jersey Governor Chris Christie announced their bid for HQ2. According to Fortune, the proposed $7 billion in tax breaks is broken down between state and city incentives.
The state has estimated that HQ2 could bring a potential $9 billion to the economy. As such, New Jersey is offering $5 billion in tax incentives over the next 10 years, but not before the 50,000 jobs are added. The city of Newark has also proposed a tax incentive, offering $1 billion in local property tax breaks and $1 billion worth of waived wage taxes for Amazon’s HQ2 employees over the next 20 years.
We will be creating 2,000 new jobs in Manhattan at our new office in Hudson Yards. New York, New York! pic.twitter.com/vFjdXkywPl
— Amazon News (@amazonnews) September 21, 2017
Amazon is allowing cities to submit their proposals through October 19.
Nearby Philadelphia is also reported to be ranked high on Amazon’s list of prospects. The city of brotherly love also proposed a tempting financial incentive, offering 10 years of property tax abatement. However, Fortune stipulates that it is “unclear” what, definitively, Amazon will gain from the plan.
Moody’s Analytics, a subsidiary of Moody’s Corp. providing economic and capital markets analysis, released a shortlist of cities they expect to be at the top of Amazon’s list. Coming in on top was Austin, TX. Austin was followed by Atlanta, Philadelphia, Rochester, Pittsburgh, New York City and the surrounding metro area, Miami, Portland, Boston and Salt Lake City.
The study first evaluated cities based on their adherence to Amazon’s laundry list of requirements for their new location. It also chose cities based on other economic factors. Other factors included: business environment, human capital, cost, quality of life and transportation.
One city that was absent from Moody Analytics’ list was Chicago, who submitted their proposal on Monday. Although Chicago’s announcement of their eligibility on Monday lacked details, Mayor Rahm Emanuel did release a statement.
“Chicago offers unparalleled potential for future growth for businesses of all sizes and is the ideal place for Amazon to build its HQ2,” the mayor’s statement read. “This bid will demonstrate to Amazon that Chicago has the talent, transportation and technology to help the company as it reaches new heights and continues to thrive for generations to come.”
Other cities have proposed to Amazon before submitting a formal bid. Kansas City’s mayor went on a reviewing spree on Amazon products. Georgia offered up a sizable amount of land totaling to a grand 345 acres; they even said they would name the site after the company, giving birth to the new city of Amazon, GA. A company in Tucson sent Amazon a 21-foot saguaro cactus to their Seattle headquarters.
— Amazon News (@amazonnews) September 19, 2017
Although amusing, the LA Times points out that such strategies to catch Amazon’s attention probably won’t amount to much. After all, the retail giant’s detailed seven-page request mostly highlighted financial incentives. Such incentives could materialize in the form of land, tax credits, relocation grants, workforce grants and fee reductions. These would be critical for Amazon, considering such incentives would allow the company to build a new “mega-campus” and offset “ongoing operational costs.”
Oh, and that 21-foot saguaro cactus? Amazon tweeted that they couldn’t accept the gift, “even really cool ones.” It was donated to Tucson’s Desert Museum. Better luck next time, Tuscon.
— Amazon News (@amazonnews) September 26, 2017
Featured image via Flickr/Robert Scoble