Newark May Have Lost Its Bid To Land Amazon HQ: Reports

NEWARK, NJ — A combined $7 billion in state and city tax breaks may not be enough to bring Amazon’s new headquarters to Newark, New Jersey, reports say.

On Monday evening, the New York Times reported that after a year-long search between 20 finalists – including Newark – the retail giant is planning to split its coveted new headquarters between two locations: the Long Island City neighborhood of Queens, New York, and the Crystal City area of Arlington, Virginia.

Amazon declined to comment on whether it had made any final decisions to the Times, which based their report on “people familiar with the decision-making process.” (Read the full article here)

The Wall Street Journal reported Monday that Amazon plans to divide its second headquarters evenly between two cities instead of picking one winner to help with recruiting tech workers. The company declined to comment on the report.

• See related article: Amazon, Crystal City Reportedly In Advanced Discussions For HQ2

Amazon has stated that the new facility will be a "full equal to its current campus in Seattle." The company said that it expects to invest over $5 billion in construction into the new headquarters and that it may bring as many as 50,000 "high-paying jobs" to the area.

The project could generate an estimated $10 billion in direct and indirect economic activity, according to a company news release. However, some critics have lambasted the huge tax incentives being dangled in front of the company in order to entice a move to Newark (see below).

On Tuesday, Senate Republican Leader Tom Kean used the reports of Newark’s dwindling chances to land the Amazon HQ to take a political shot at Gov. Phil Murphy.

According to Kean, “massive tax increases” imposed by Murphy and legislative Democrats this year have “likely blown New Jersey’s shot” at luring Amazon’s new headquarters and tens of thousands of high-paying jobs.

“New Jersey was well on the path to creating the stable, predictable tax environment that employers like Amazon require until Governor Murphy’s budget reversed nearly a decade of fiscal discipline,” Kean said. “The massive multi-billion dollar business tax increase signed by Governor Murphy in July was the nail in the coffin for Newark’s proposal to host HQ2.”

BRINGING AMAZON TO NEWARK

Amazon listed some criteria for the new location. It needs to be in a metropolitan area, in a stable and business-friendly environment, close to world-class universities and to transportation infrastructure, and with optimal connectivity to the internet.

The race to land the new facility inspired proposals from more than 238 communities. According to Amazon, the other locations that were among the final 20 candidates are: Austin, TX, Chicago, IL, Columbus, OH, Dallas, TX, Denver, CO, Indianapolis, IN, Los Angeles, CA, Montgomery County, MD, Nashville, TN, New York City, NY, Northern Virginia, VA, Philadelphia, PA, Pittsburgh, PA, Raleigh, NC, Toronto, ON, and Washington D.C.

• See related article: SNL Lampoons Newark's Odds Of Landing Amazon HQ (Video)

The proposal to bring Amazon's new headquarters to Newark has lined up supporters on both sides of the political spectrum, including former governor and Republican Chris Christie and U.S. Senator Cory Booker, a member of the Democratic Party.

"This deal would amount to one of the most successful endeavors in the history of New Jersey and Amazon," Christie said last year. "For New Jerseyans, HQ2 means 50,000 new jobs and the creation of a larger consumer base and direct opportunities for local small businesses and vendors to grow and thrive. Adding tens of thousands of dedicated and community-oriented Amazon employees and their families will also further enrich our area neighborhoods and schools."

• See related article: 'Bring Amazon HQ To Newark': Christie, Democrats Agree

After an April meeting between Amazon representatives met with federal, state and local community leaders in Newark, Booker said that Newark is enjoying "unprecedented" growth, and Amazon has a unique opportunity to help supercharge the boom.

"A Newark HQ2 would create tens of thousands of local jobs, boost our regional economy and spur economic development throughout our great city and the entire region," Booker said. "It would also create a larger consumer base that would help local small businesses flourish. As a former mayor and current resident of Newark, I am so proud of how far our city has come."

• See related article: Amazon Visits Newark; Will Company Choose New Jersey For New HQ?

In addition to “many strategic logistical benefits” that would help Amazon HQ2 thrive, Newark Mayor Ras Baraka previously offered the company another reason that it should consider the Brick City… social justice.

"Unquestionably, Newark has all that Amazon seeks including something that's not listed on the RFP, but which is at the core of social responsibility that the company is known for: the opportunity to accelerate the transformation of a great American City that is already experiencing enormous progress," Baraka said.

• See related article: Don't Believe The Cynicism, Newark Is On The Rise: Mayor

NEW JERSEY’S HUGE TAX BREAKS FOR AMAZON

However, some critics have questioned the plan to offer the corporation a tax break through the state Economic Development Authority (NJEA) that could reach $5 billion over 10 years. Newark city officials are also offering the company a municipal property tax abatement that could be worth $1 billion, as well as a city wage tax waiver worth an estimated $1 billion over 20 years.

Amazon would be required to create at least 30,000 new full-time jobs and represent a capital investment of at least $3 billion to earn the tax credits. The project would also be required to yield a net benefit to the state of at least 115 percent of the tax credits the company receives.

State Assemblyman John Wisniewksi, a Democrat from District 19, previously said that the Amazon "bidding war" will only put New Jersey on a downward spiral.

"While the proposal would provide good jobs in the region, it also robs the state of the very revenue needed to address the consequences of such growth and development," Wisniewksi said.

"If we add 50,000 employees to downtown Newark, where's the money to maintain and expand the system?" Wisniewksi questioned. "Who would pay for the additional wear and tear on roads or the additional police and firefighters needed to ensure public safety?"

In October 2017, two radically different New Jersey think tanks came together at a press conference in Trenton to announce their opposition to "New Jersey's tax subsidy insanity."

“Offering $7 billion in tax breaks to a single corporation is terrible policy and a big step in the wrong direction," said Jon Whiten of the New Jersey Policy Perspective.

“In order to succeed in the long run, Amazon's new HQ2 needs sound public investments - like efficient and affordable public transit, new affordable homes and more - not enormous tax breaks," Whiten said. "It's appalling that eight years into a record-breaking surge in overly generous corporate subsidies, New Jersey's political leaders haven't learned their lesson, and are instead leading this national race to the bottom."

"New Jersey has one of the most educated workforces in the country," Erica Jedynak of Americans for Prosperity-New Jersey agreed, warming up for a pun. "Our state is [already] a prime location for Amazon."

• See related article: Race To The Bottom: NJ's Quest For Amazon HQ Is 'Insane,' Critics Say

WHAT’S NEWARK OFFERING?

The package that Newark has offered to lure Amazon to the city was mostly kept under wraps until Newark city officials released a redacted version of their 200-page proposal to the retail giant at the request of its client, Steven Wronko, a New Jersey open-records activist who sued to get the information.

Newark's full proposal to Amazon can be downloaded at NJOPRA.com here.

According to the proposal, which bears the "Yes Newark" logo, possible locations for Amazon's headquarters include:

• Lotus Riverfront
• Washington Park Campus
• Gateway Center
• Matrix Riverfront
• Mulberry Commons
• RBH SoMa

The proposal also lists some ways that the city is prepared to "supplement" the enormous tax breaks that are already being dangled in Amazon's direction:

• "Invest significant capital over the next five years to expand the city's wi-fi and broadband and provide 10-gigabite internet service to any site Amazon selects"
• "Partner with the state to facilitate new neighborhood residential development to put 20,000 Amazon employees within walking distance of their new headquarters within five years"
• "Fund public space and transportation system improvements around the new campus to build on the city's ongoing $50 million investment in transportation and smart city infrastructure in the central business district"

The proposal lists five "unique strategic advantages" that Newark can offer Amazon:

• Data Infrastructure – "Newark defines cutting-edge bandwidth – no city in the world delivers faster internet speeds."
• Destination – "Newark offers an unmatched logistical infrastructure – roads, rails, airports and a major port – that can help Amazon move its people and products like no other city can."
• Diversity – "Newark offers unmatched access to high-caliber talent and industry verticals that match Amazon's growth aspirations."
• Development – "Newark offers Amazon and its employees unrivaled development opportunities – with park and riverfront views – and an unbeatable spectrum of lifestyle options."
• Destiny – "Newark provides Amazon with an opportunity to take a leading role in the ongoing renaissance of a great American city."

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Photo: Amazon Fulfilment Centre near Swansea, Wales, Britain - 03 Dec 2009 (Shutterstock)