NC competition for Amazon’s HQ2 heats up

The internet retailer is looking for strong schools, local high tech skills, a business-friendly tax structure and good, cheap quality of life for its new second headquarters.

REUTERS/Carlos Jasso/Illustration

RALEIGH – North Carolina cities are working hard to lure internet retail giant Amazon to the state for a second headquarters. The $5 billion project promises 50,000 jobs paying $100,000 or more annually over 15 years. Charlotte, the Research Triangle Park and Triad areas are all submitting proposals by the Oct. 19 deadline. More than 100 cities across North America have said they are putting together proposals as well, including Dallas, Houston, Toronto, St. Louis, Miami, Detroit and Atlanta.

“We are looking for a location with strong local and regional talent — particularly in software development and related fields — as well as a stable and business-friendly environment to continue hiring and innovating on behalf of our customers,” said Amazon’s Request for Proposal page.

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The Charlotte Chamber of Commerce has launched a social media campaign with the hashtag #CLTisPrime to stir up energy around Charlotte’s bid. “Tell the world, and especially Amazon CEO Jeff Bezos, why Charlotte USA is a great place to live and work,” said a chamber press release. “Make your voice heard and help us showcase what makes our region unique.”

The largest e-commerce company in the world, Amazon said it intended to create a headquarters, called HQ2, that would be a “full equal” to its Seattle office, Bezos said in a statement. The company wants a metropolitan area of more than a million people with an international airport, good education and mass transit.

FILE: Amazon’s campus in Seattle, Washington.

The HQ2 project would initially need more than 500,000 square feet and up to 8 million square feet beyond 2027, Amazon said. Its Seattle campus spreads across 8.1 million square feet in 33 buildings and employs more than 40,000 people.

Amazon has made clear that state incentives are likely to be an important consideration for any city in the running. In N.C., corporate incentives have been a point of contention in the General Assembly over the past several years as many say they are critical tools for job creation and more money is needed to level the playing field with neighboring states. Others say they are costly and wouldn’t be needed if the state went to a zero percent corporate tax rate for every employer, not just the big ones. N.C. Gov. Roy Cooper said last week that he and Commerce Secretary Tony Copeland are working on a proposal package for Amazon to come to N.C.

“Amazon’s jobs are not any more valuable than any job created by any other company,” said N.C. Americans for Prosperity executive director Donald Bryson. “If Gov. Cooper agrees that a lower tax burden creates jobs, then he needs to start talking about lowering taxes for all businesses, and stop buying votes by giving away taxpayer money to Amazon and foreign banks.”

A provision in the state budget that passed into law in June provides enhanced incentives for companies that invest at least $4 billion and create at least 5,000 jobs. In return, these “transformative projects” could be reimbursed for up to 100 percent of the withholding taxes from the new jobs they create and total incentive outlay would likely not be limited to the current $35 million statewide cap on the Job Development Investment Grant (JDIG) projects. Under JDIG, companies must meet investment and job creation projections to qualify for the tax rebates.

Amazon and other large companies have come to expect incentives. Amazon has been awarded more than $1 billion in state and local subsidies since 2000, according to estimates by watchdog Good Jobs First. Texas leads the way with the value of subsidies to Amazon followed by Illinois, Kentucky and Ohio, it said.

In Wisconsin, Gov. Scott Walker approved a law this year with $3 billion incentives package for a Taiwanese tech company that’s building a $10-billion liquid crystal display factory in the state with 1,300 jobs. N.C. was in the running for that project.

Amazon’s current Seattle location is considered one of the most expensive places in the country to run a business, sparking their search for a second home.

“The high cost of living and the high cost of real estate, all of that adds up to why expanding in that market is not viable,” said Burt Flickinger, managing director of retail consultant Strategic Resource Group.

Amazon began as a bookseller and grew into the internet’s biggest retailer. Total revenue was $136 billion at the end of last year, up sharply from $34 billion in 2010. Amazon recently snatched up Whole Foods Market for $13.7 billion.

The company says that they will choose the location of HQ2 next year.