Columbus Offered Amazon More Incentives than New York, D.C. and Nashville Combined

Columbus Offered Amazon More Incentives than New York, D.C. and Nashville Combined
Photo by Mike Seyfang/Flickr

A report in the Columbus Business Journal published Tuesday listed many of the tax incentives that Ohio's capital city offered Amazon in its bid to lure the tech giant's second headquarters to central Ohio.

Over 30 years, a grand total of $2.8 billion in tax breaks and incentives were offered, exceeding — according to the CBJ — the combined total incentives offered by NYC, D.C., and Nashville, where Amazon will locate new facilities.

While much of Cleveland's bid has been released, the financial incentives were redacted and will reportedly remain under lock and key,  "business trade secrets" to be deployed at a later date.

That should scare us all.

Amazon's decision to locate additional "headquarters" in both New York City and Northern Virginia, (Washington D.C. metro area, in a campus it is calling "National Landing"), plus a $1 billion logistics center in Nashville, should serve as a warning for other cities. It would seem Amazon knew where it wanted to locate from the start. As reporter David Dayen noted for In These Times, the sweepstakes allowed Amazon to extract troves of data free of charge.

"The biggest suckers on HQ2 aren’t New York and Virginia," he wrote. "It’s the other 236 cities that bid on a headquarters they were never going to get. Those bids didn’t just include the size of the bribe; they included a wealth of important data about plans for transportation, housing, education and workforce development. Amazon now has a treasure trove of non-public information about America’s future, in addition to knowing how much cash cities are willing to part with to land an Amazon facility."

Cleveland should not participate in corporate sweepstakes of this sort ever again.

Here's what Columbus was prepared to offer, via the Columbus Business Journal.
    • A 15-year, 100 percent property tax abatement within city limits – a cumulative $456,750 savings per $1 million in investment, or $2.28 billion over 15 years on a $5 billion headquarters.
    • A 16-year, 35 percent job growth incentive, calculated on city income tax withholding for full-time jobs paying more than $15 hourly, not to exceed $400 million over the life of the deal or $50 million in a single year.
    • After expiration of the job incentive, a subsequent 15-year incentive based on 25 percent of income tax withholding toward reimbursing the company for its cost of acquiring, prepping and building the property. The total over the life of that incentive would not exceed the lesser of those costs or $75 million.
    • A 15-year transportation fund, created by reserving 25 percent of income tax withholding (on top of the job incentive), that would be dedicated to roadwork, infrastructure and transit improvements for the site, such as autonomous employee shuttles. At an estimated $100 million in annual payroll, that would have been about $7.5 million over 15 years.
    • A “net profit tax” incentive – reserved for companies that invest at least $7 billion the first year and create 1,000 new jobs ­­with at least $45 million combined annual payroll. The city’s document does not spell out the percentage decrease offered on any net profit tax that Amazon would have due.
    • Dedicated dark fiber-optic broadband capacity from the city’s network.
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    Sam Allard

    Sam Allard is the Senior Writer at Scene, in which capacity he covers politics and power and writes about movies when time permits. He's a graduate of the Medill School of Journalism at Northwestern University and the NEOMFA at Cleveland State. Prior to joining Scene, he was encamped in Sarajevo, Bosnia, on an...
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