As ante of incentive stakes for Amazon soars, will North Carolina fold?

RESEARCH TRIANGLE PARK – It’s quickly nearing show ’em or fold ’em time for Amazon bids with several states showing some big cards. So will North Carolina fold or take a breath, ante up, draw three, and come up with an inside straight?

A lot of politicos at the General Assembly and across the Capital must have blanched last week when news emerged that Maryland approved a whopping $8.5 billion incentives package to woo Amazon HQ2. To date, that appears to be the biggest package offered Amazon for the $5 billion investment and 50,000 related jobs.

Four others are reportedly $2 billion or more.

On a cash basis, these certainly trump North Carolina’s $1.6 billion offer for that Toyota-Mazda plant and 4,000 jobs – which didn’t win.

So why not offer $16 billion for 10 times the jobs? After all, about a third of the incentives package for the Toyota-Mazda deal was linked to changes in NC tax law. How much might those changes be worth to Amazon on a bigger deal that will take longer to scale and would not be focused on manufacturing? You can bet Amazon has already read the fine print on the bill.

Yet there seems to be little political will for such a mega offer, as WRAL Capitol Bureau Chief Laura Leslie reported last week. Some would prefer a smaller Apple project since it appears more affordable.

Why not take a deep breath and go for two?

Political will

Interestingly, the Maryland legislation (labeled “PRIME Act,” an obvious play on Amazon’s Prime service) received bi-partisan support. Think that could happen here?

(Triangle Developer John Kane has his own “Prime” plan – a mix of properties in Raleigh from Dix to North Hills linked to a mass transit corridor. Could that be Raleigh’s hole card?)

Maryland is offering “credits, incentives and grants,” the Baltimore Sun reported with $2 billion in targeted infrastructure investment for the site in Montgomery County.

Amazon has said it wants mass transit. North Carolina certainly can point to future investment in the Triangle with more than $2 billion already on the books for a mass transit package. So while the region is lacking now, the future spending commitment has to be a plus.

Might the transit investment and the changes in taxes be two aces?

The countdown

The Wall Street Journal reported last week that Amazon has visited several of the 20 site finalists as selected by Amazon. WRAL has reported that Amazon has visited the Triangle. Other visits have included Dallas, Chicago, Indianapolis and the Washington D.C. area.

And the Amazon site shoppers are apparently open to some wheeling-and-dealing with the exceptions of education and work force. The Amazon team “examines data provided by the cities—such as the ACT and SAT scores of local high-school students— and asks probing questions regarding how much talent Amazon can attract,” the newspaper reported.

Those two points – education and talent – are why Wake Tech President Dr. Stephen Scott believes the Triangle will win or be in the top two or three choices.

“The company appears to be leaning toward a more urban site, despite requesting proposals that included sites in the suburbs. It also wants to come to a city prepared to handle the company’s growth and the influx of high-paid employees,” WSJ added. Yet the paper quoted one person familiar with a visit as saying “They believe there is no American city that can provide for all their needs” and another as believing some compromise is expected.

The bids

As for the massive scale of the Amazon bids, here’s a list published by The Sun, citing a wide variety of sources;

Montgomery County: $8.5 billion in tax and infrastructure incentives
Newark, N.J.: $7 billion
Philadelphia: $2 billion-$3 billion and possibly property
Columbus, Ohio: $2.3 billion
Chicago: $2 billion
Atlanta: $1 billion plus title of mayor for Jeff Bezos for a town outside of the city
Los Angeles: Up to $1 billion
Denver: $100 million or more, based on existing incentive programs
Austin, Texas: no subsidies included in bid from the city, no details disclosed by the stat
Nashville, Tenn.: no incentives offered by the city
New York City: no special tax breaks or subsidies from the city, though it has identified properties; no details disclosed by the state
Toronto, Ontario: no special tax incentives or subsidies offered
Boston/Somerville, Mass.: no details disclosed
Dallas, Texas: no details disclosed
Indianapolis, Ind.: no details disclosed
Miami, Fla.: no details disclosed
Northern Virginia, Va.: no details disclosed
Pittsburgh: no details disclosed
Raleigh, N.C.:no details disclosed, though legislation recently passed to offer tax refunds and infrastructure aid to big job creators
Washington, D.C.: no details disclosed, except training for workers