State officials offered Amazon.com Inc. almost a billion dollars more of incentives than was previously known to win its second-headquarters contest and were even prepared to pay part of some employees’ salaries if the tech company developed a campus in New York.Taxpayer incentives are a scam. They never pay for themselves, and when the additional taxes to pay for them on other, smaller, employees are factored in, they don't generate any jobs either.
Documents reviewed by The Wall Street Journal show the scope of what state and local officials initially put on the table as part of the 2017 HQ2 competition, in which more than 200 cities submitted bids to host a facility that Amazon said would house 50,000 jobs.
The company said in November 2018 that sites in Northern Virginia and the Long Island City neighborhood of Queens would split the new headquarters. New York state and city officials agreed to give $3 billion of incentives to the e-commerce giant to hire as many as 40,000 employees.
Facing opposition from some local elected officials, Amazon abandoned its plans for New York on Valentine’s Day last year.
The Journal obtained the records through a Freedom of Information Law request to Empire State Development, the state’s economic development authority.
The documents show that in its first formal bid to Amazon, in October 2017, the state offered to provide up to $2.5 billion of incentives to the company for a campus in New York. The offer also applied to sites that state and local leaders proposed in the Hudson Valley, Albany, Central New York, Buffalo, Rochester and on Long Island.
The state’s initial offer included $1.4 billion of tax credits based on the number of employees hired and $1.1 billion of various grants. That was $800 million more than the ESD agreed to in a memorandum of understanding signed a year later: The state provided $1.2 billion of tax credits and $505 million to reimburse some construction costs.
On top of the state’s final $1.7 billion package, New York City ultimately offered Amazon up to $1.3 billion of extra incentives through two programs open to any company.
ESD initially proposed to spend $500 million to create a Center for Commercial Innovation near the selected site that would let Amazon partner with various colleges for research relevant to its business. The site would also subsidize job-training programs, according to the proposal, and the state pledged to pay 25% of certain graduates’ first-year wages with Amazon to help it achieve workforce diversity.
State Sen. Mike Gianaris, a Democrat from Queens and one of the leading opponents of the Long Island City campus, said news of the initial offer underscored his call to re-examine state incentive programs.
“The more we learn about this twisted process, the worse it appears,” Mr. Gianaris said. “I think it’s good we didn’t have to provide any incentives to get Amazon here, because they appear to be coming anyway.”
Unfortunately, without federal legislation to prevent this, companies like Amazon will continue to play states and localities against each other, and everyone will lose but robber barons like Jeff Bezos.