New York State officials secretly offered Amazon more than $800 million in incentives than previously publicly declared in a bid to win the e-commerce giant’s second-headquarters contest in 2017.
Documents discovered by the Wall Street Journal laid bare the extent state and local officials went to to grease the palms of the Jeff Bezos-owned company as part of the HQ2 competition just over two years ago, which saw more than 200 cities submit bids to Amazon hoping to secure some 50,000 jobs to their respective regions.
Such incentives included lawmakers expressing a willingness to even pay part of some employees’ salaries if the company agreed to set up a campus in New York.
Amazon announced in November 2018 that the new headquarters would be split between sites in Northern Virginia and Long Island City in Queens, with New York officials agreeing to give $3 billion in incentives to the company in exchange for 40,000 jobs.
However, facing a slew of protests and backlash from local elected officials such as Alexandria Ocasio-Cortez, Amazon ultimately abandoned its plans for a New York hub on Valentine’s Day last year.
Documents discovered by the Wall Street Journal laid bare the extent state and local officials went to to grease the palms of the Jeff Bezos-owned company as part of the HQ2 competition just over two years ago, which saw more than 200 cities submit bids to Amazon hoping to secure some 50,000 jobs to their respective region
The documents from the city’s first bid to Amazon, dated October 2017, show that the state had offered up to $2.5 billion in incentives, including $1.4 billion in tax credits dependent on the number of employees hired and an additional $1.1 billion in various other grants.
The that amount was $800 million more than Empire State Development (ESD) had agreed to put forward in a memorandum of understanding signed the following year, which said the state had agreed to provide $1.2 billion of tax credits and $505 million to reimburse some construction costs.
In reality, on top of their final $1.7 billion package, New York had originally made a discreet offer of as much as $1.3 billion in extra incentives to Amazon, through two different programs open to any company.
Officials also suggested alternative campus sites, including a plot next to the World Trade Center in lower Manhattan. one in downtown Brooklyn and another near Penn Station.
The city also presented an idea that Governors Island, a former coast guard base situated between Manhattan and Brooklyn, could serve as a ‘island retreat’ for Amazon Workers.
The documents from the city’s first bid to Amazon, dated October 2017, show that the state initially offered up to $2.5 billion in incentives, including $1.4 billion in tax credits dependent on the number of employees hired and an additional $1.1 billion in various other grants. The total was $800 million more than Empire State Development (ESD) had agreed to put forward in a memorandum of understanding signed the following year
Amazon announced in November 2018 that the new headquarters would be split between sites in Northern Virginia and Long Island City in Queens. However, facing a slew of protests and backlash from local elected officials such as Alexandria Ocasio-Cortez, Amazon ultimately abandoned its plans for a New York hub on Valentine’s Day last year
ESD then offered to spend $500 million to create a Center for Commercial Innovation near Amazon’s desired site that would partner the company with a number of colleges for research relevant to their business, WSJ reported.
The center would also help subsidize job-training programs, and the state even pledged to pay 25 percent of certain graduate’s first-year wages at the company, in order to help Amazon achieve workplace diversity.
According to ESD spokesman Matthew Gorton, the initial offer was inflated to reflect to original – and larger – plans for a single-site HQ2, as well as to lure Amazon into negotiations.
‘Throughout the negotiating process, we sharpened our incentive package and ultimately secured a better return on investment for the state and the biggest economic development opportunity in New York’s history,’ told WSJ.
Despite the generous offerings, Amazon insisted their HQ2 decision was made on where they believed their employees would prefer to live, rather than just the incentives.
In reality, on top of their final $1.7 billion package, New York had discreetly offered as much as $1.3 billion in extra incentives to Amazon. Officials also suggested alternative campus sites to the Long Island City (above) , including a plot next to the World Trade Center in lower Manhattan. one in downtown Brooklyn and another near Penn Station
The company said they were inundated with generous offers, with many of the prospective packages far more munificent than those offered by Virginia or New York.
State Senator Mike Gianaris, one of the leading voices against the Long Island campus, said the city’s initial offer emphasized his belief that state incentive programs should be re-examined and reformed.
Gianaris described the process as being ‘twisted’, adding that he thinks ‘it’s good we didn’t have to provide any incentives to get Amazon here, because they appear to be coming anyway.’
Seven months after they shelved the Long Island plans, in December Amazon announced plans to lease space for 1,500 employees in Hudson Yards.