What Amazon rejected: $5.7 billion HQ2 package from Philly and PA

Here’s everything the region offered the tech giant.

Rendering of uCity Square, one of many glossy images used in Philly's wooing proposal to Jeff Bezos

Rendering of uCity Square, one of many glossy images used in Philly's wooing proposal to Jeff Bezos

City of Philadelphia
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Updated 7:25 p.m.

Pennsylvania and Philadelphia officials were ready to offer Amazon more than $5.7 billion in tax breaks and other benefits in exchange for the tech giant’s coveted headquarters.

In an undated letter released Tuesday afternoon, Gov. Tom Wolf’s administration offered Amazon leadership up to $4.6 billion in a new performance-based financial assistance program — a long-term tax break contingent on economic gains to the tune of 50,000 jobs in either Philadelphia or Harrisburg, two of the 20 cities on the short-list of ostensible contenders for HQ2 across the country. Wolf’s administration was also prepared to sweeten the pot with $100 million “to support state transportation improvements” near the site of the headquarters.


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Shortly before to the release of those letters on Tuesday, Mayor Jim Kenney’s administration also published its long-shielded love letter to Jeff Bezos — albeit in still heavily redacted form. The city proposed an additional $1.1 billion in local tax incentives, among other benefits.

Pittsburgh’s offer aside, the total package for Philly and Harrisburg appeared on par with the combined offers of Amazon’s new homes. The e-commerce juggernaut reaped a nearly $3 billion incentive package in New York City, as well as a $574 million incentive from Arlington, Va., including cash grants and hundreds of millions in transportation improvements.

After months of legal battles to keep them shielded from public sight, here’s a peak at what’s inside the snubbed offers.

What Philly’s proposal does and doesn’t show

  • Philadelphia was prepared to offer Bezos a $1.1 billion in tax breaks over 20 years through an oft-criticized incremental financing program, which allows companies to keep tax breaks in exchange for public gains wrought through private-sector development.
  • City-affiliated agencies spent more than $500,000 on the bid. Officials spun the lost time, energy and money as a net positive for the city.
  • “This gave us an opportunity to come together to develop new data, messages, and communications tools to support and promote Philadelphia on a national stage,” said John Gowdy, the president of the Philadelphia Industrial Development Cooperation, which led the city’s bid. “We have gained a terrific set of reusable assets and learned important lessons that will be valuable in promoting Philadelphia for talent and business attraction in the future.”
  • About 15 pages of the 108-page document still remain redacted in some form.
  • Details of the state’s incentive package are censored in the document, although they were released in letter form shortly after the city published its redacted bid on late Tuesday afternoon.
  • Also still redacted in the city’s HQ2 record, per the Mayor’s Office: perks offered by third-parties and additional material related to the Philadelphia International Airport. “The airport material remains redacted because PHL is currently pursuing separate business opportunities and release would harm the City’s ability to do so,” mayoral spokesman Mike Dunn said.
  • The document included no mention of subsidizing a helipad for Jeff Bezos and his technocrat executives, which apparently New York taxpayers are footing the bill for now.

What Harrisburg’s offer shows 

  • The state’s pot sweeteners appear less formal than the city’s. Wolf’s office released a brief statement accompanied by two letters, one signed by bipartisan leadership in Harrisburg and the other by the Wolf administration’s Department of Community and Economic Development.
  • The DCED letter outlines the overview of the state’s response to Amazon’s request for proposal for its headquarters, titled “Work Smart, Live Happy.”
  • DCED Secretary Dennis M. Davin wrote: “To meet the needs of Amazon’s HQ2, the Commonwealth of Pennsylvania proposes up to $4.6 billion in financial assistance, including up to $4.5 billion through a new performance-based grant program and $100 million to support state transportation improvements.”
  • The incentive is hinged on Amazon providing 50,000 new full-time jobs in the state — compared to the New York City’s $3 billion offer for 25,000 promised jobs.
  • Davin explained the breakdown of the perks in simple terms: “The concept of this new incentive program is straightforward: a grant award will be made available on an annual basis for up to 25 years, and will be based on the amount of personal income tax collected annually from Amazon employees. We believe you will immediately recognize the flexibility and predictable incentive potential of this new program, and we are recommending immediate legislative action to create it.”
  • The proposal touts Wolf’s increased financial commitments to STEM industries as well as funding the state’s public education system.
  • The accompanying documents of the proposal have not yet been released.

 

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