Democrats Criticize Amazon HQ2 Bidding Process Involving Taxpayer $. Amazon Wants Secrecy

Democrats Criticize Amazon HQ2 Bidding Process Involving Taxpayer $. Amazon Wants Secrecy

As competition heats up for cities hoping to land Amazon HQ2, leading Democrats are among the voices who have criticized the online retail giant for asking taxpayers to subsidize and offer tax credits to win the second headquarters of one of the world’s most valuable companies.

On Thursday, CNBC reported that Amazon is asking for secrecy in a highly-publicized process that involves taxpayer dollars:

CNBC’s Scott Cohn confirmed on Thursday that Amazon has insisted cities shift to a confidential pitch mode as the second round progresses.

Amazon this month narrowed the list of HQ2 candidates from 238 to 20, and there’s a bidding war underway. Cities and state governments are offering taxpayer giveaways and upping their roles in the bidding process.

Rep. Keith Ellison, D-MN, and Rep. Ro Khanna, D-CA, were early critics of Amazon’s bidding process.

Ellison is the representative for Minnesota’s 5th congressional district. Khanna is U.S. Representative for California’s 17th congressional district.

“The cities should not compete against each other in a race to the bottom. It’s absurd for the taxpayers to offer subsidies to one of the richest companies in the world,” Khanna said in a statement to The Intercept. “Instead, perhaps the cities should band together and bargain collectively on issues such as wages, jobs, infrastructure improvements, and the environment. This would prevent Amazon from simply going to the city that offers the most tax breaks.”

Ellison criticized the bidding wars on Twitter. “Tax breaks to Amazon promised by New Jersey: $7 billion. Tax breaks promised by Illinois: $2 billion. Something is deeply wrong with our economy & democracy when local governments offer up their tax base to a corporation worth over $500 billion,” he wrote.

Amazon this month narrowed the list of candidates from 238 to 20, and there’s a bidding war underway. Cities and state governments are offering taxpayer giveaways and intensifying their roles in the bidding process. They include:

Austin, Texas; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Md.; Nashville, Tenn.; Newark, N.J.; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh, N.C.; Toronto, and Washington, D.C.

Seattle is the HQ1 home of the e-commerce giant, which occupies 8 million square feet of office space in 33 buildings there. Amazon has 40,000 employees in Washington state and about 380,000 worldwide.

In a September 2017 blog, Amazon announced it planned to build an HQ2 that will ultimately employ as many as 50,000 people at its new campus, with average compensation $100,000-plus, spending $5 billion to set up the new headquarters.

Amazon is worth around $500 billion. Only Apple, Alphabet and Microsoft are worth more, Inquisitr reported.

Jeff Bezos, the son of a Cuban immigrant, is the CEO and founder of Amazon. He may be the richest man of all time. The majority Amazon stakeholder, his net worth tops $116 billion, according to Forbes. Bezos was ranked the world’s richest several times in 2016.

Amazon has specifically asked cities to transition from what has been a very public process to a more secretive pitch, CNBC reported:

Mayors across North America are choosing their words carefully. ‘It’s like a poker game,’ Dallas Mayor Mike Rawlings told CNBC at the United States Conference of Mayors on Thursday, explaining that it’s time for cities to play their cards close to the vest. ‘Bring the bidding war on,’ he said.

‘We aren’t gonna really talk about what’s on the table,’ said Washington D.C. Mayor Muriel Browser.

‘It’s a very secretive process. We’re obviously bound by confidentiality,’ said Miami Mayor Francis Suarez.

‘If I were to lay out out now what we’ll offer it would be criticized and looked at, and determined whether it’s good or bad,’ said Philadelphia Mayor Jim Kenney.

The finalists for Amazon’s second headquarters have offered these subsidies to Amazon from each metro area or state, according to Good Jobs First, a nonprofit group that tracks subsidies:

  • Texas: $269 million
  • Austin: $11 million
  • Dallas: $500,000 and four deals of unknown value
  • Ohio: $93.7 million statewide
  • Columbus, Ohio: $21.5 million in two deals
  • Illinois: $83 million statewide
  • Newark: $39.4 million
  • New York City: $23 million
  • Pennsylvania: $22.5 million statewide.
  • No deals from Pittsburgh and Philadelphia
  • Boston area: $18.4 million in two deals
  • California: $10.3 million statewide in three deals
  • Los Angeles: $1.6 million
  • Nashville: $7.7 million in six deals plus one of unknown value
  • Indianapolis: $7.1 million in five deals
  • Miami: $6.2 million
  • Virginia: $4.5 million in four deals statewide
  • Northern Virginia: One deal of unknown value
  • Denver: $1.2 million
  • Atlanta: $504,023

Most public officials have been reluctant to criticize the Amazon bidding process, The Intercept reported. Some, such as Sen. Cory Booker, D-N.J., have actively promoted the incentive packages.

Instead of participating in a bidding bar, cities should do the opposite and force Amazon to make merit-based decisions, University of Toronto professor Richard Florida wrote a column for CNN. Florida thinks the bidding war is economically unproductive and that Amazon is wrong for going after taxpayer dollars. They could be used on other things in the public interest such as schools, parks, transportation and housing, he said.

Amazon HQ2
Amazon fulfillment center in Phoenix, 2013. Photo:AP Photo/Ross D. Franklin