It was one of the most frenzied bidding wars in corporate history.
New York and Northern Virginia won the competition to host Amazon’s new joint headquarters, with another subsidiary site in Tennessee. But are the losers breathing a sigh of relief?
There’s mounting criticism in the U.S. about the huge amounts in tax breaks and incentives spent luring the e-commerce giant to those locations.
CGTN’s Owen Fairclough reports.
Virginia is known as the state for lovers—and it’s just pulled off the ultimate corporate seduction: persuading Amazon to build one of two new headquarters in the northern part of the state.
Announcing the deal, Virginia Governor Ralph Northam told a news conference: “Amazon has found its next home for innovation right here in our Commonwealth of Virginia. Amazon will invest approximately $2.5 billion to establish a major new headquarters here and plans to create at least 25,000 new jobs.”
But enticing the company with public money has attracted plenty of criticism from tax advocates.
Schools in Arlington County, which is hosting the Northern Virginia site, are facing a budget shortfall of up to $43 million next year.
And with public money, Virginia is subsidizing Amazon to the tune of $573 million – that’s $22,000 for every job if Amazon hits the target.
In total, Amazon will benefit from more than $2 billion in breaks and incentives for three sites that include New York and Nashville in Tennessee.
Louisiana has a checkered history with generous incentives like this.
For years, it’s attracted dozens of Hollywood productions, from The Curious Case of Benjamin Button to Jurassic World, to film in the state with lucrative tax breaks but was then forced to cap them.
Jan Moller, Director of the Louisiana Budget Project, which has long opposed these tax breaks, told me: “At one point we were spending more than $250 million a year on this program.
“So, for every dollar that the state spends on a movie production is a dollar that is not being spent to educate a child or to fix a pothole in the street or to invest in a university education or healthcare or any of the things the state buys with its tax dollars.”
Amazon insists its Northern Virginia site alone will bring in $3.2 billion in tax revenue over the next 20 years —and that Virginia stands to earn a massive return on its investment.
“These are performance-based incentives that are available to all companies that are offering these kinds of investments and we don’t get these kinds of incentives if we don’t create the jobs,” Jay Carney, Amazon’s Senior Vice President for Corporate Affairs, said.
Amazon will have up to 12 years to do that…as it looks to create more than 50,000 jobs across its three new sites.