The Washington Post
Robert McCartney and Ovetta Wiggins
January 22, 2018
“Maryland Gov. Larry Hogan (R) will offer more than $3 billion in tax breaks and grants and about $2 billion in transportation upgrades to persuade Amazon.com to bring its second headquarters and up to 50,000 jobs to Montgomery County.
“Hogan’s proposal, a copy of which was obtained by The Washington Post, is designed to give the state an edge over 19 competitors, including the District and Northern Virginia, in luring the online retail giant to build a 100-acre campus in White Flint or another site in North Bethesda.
“It appears to be the second-most generous set of inducements among the 20 locations on Amazon’s shortlist. Of the offerings whose details have become public, either through government or local media accounts, only New Jersey’s is larger, at $7 billion.
“Maryland’s package, which Hogan will make public Monday morning, will require legislative approval and would dwarf any previous economic development offering in the state’s history.
“HQ2 is the single greatest economic development opportunity in a generation, and we’re committing all of the resources we have to bring it home to Maryland,’ Hogan said in a statement obtained by The Post on Sunday.
“Seattle-based Amazon last week slashed the number of locations it is considering for its second headquarters, from 238 to 20. Finalists include potentially strong competitors such as Boston, Atlanta, Chicago and Philadelphia. But the Washington area is believed to stand an above-average chance, partly because it was the only region with three locations on the list of 20. (Amazon founder Jeffrey P. Bezos owns The Washington Post.) ...
“The prospect of winning tens of thousands of good-paying jobs, along with the prestige of triumphing in a North America-wide contest, has sparked a competitive frenzy among politicians and business leaders vying for the prize. …
“The biggest single element in Hogan’s plan is legislation that would provide a 10-year package of tax credits and exemptions. Qualifying companies would get a tax credit equal to 5.75 percent of wages for each new qualifying headquarters job; a state and local property tax credit; and a state sales and use tax exemption for construction material or warehousing equipment used in the project.
“The legislation does not name Amazon as the beneficiary, but is unmistakably aimed at the retailer. According to draft wording reviewed by The Post, the benefits would be available to a Fortune 100 company that creates a new headquarters facility in the state with an investment of at least $5 billion over 17 years, along with other conditions.
“Maryland used creative capitalization in naming the bill, to give it a catchy — and Amazon-specific — acronym: the ‘Promoting ext-Raordinary Innovation in Maryland’s Economy (PRIME) Act of 2018.’
“The bill includes a clawback provision that would allow the state to recover tax credits if the company fails to hire at least 40,000 people with average compensation of $100,000 a year. Hogan’s proposal also provides $150 million in direct grants to Amazon from the state Sunny Day Fund — $10 million a year for 15 years.
“Together, the tax relief and Sunny Day grants would be worth more than $3 billion to Amazon, the state said. The benefit would be greater if the new employees’ average pay was more than $100,000 a year.
“The governor’s office declined to detail the approximately $2 billion in road, transit and infrastructure improvements that it will offer or to say whether all of those upgrades represented new spending, as opposed to investments in projects already in the pipeline.“The state will detail those in the future when it’s strategically advantageous to do so,’ Hogan spokesman Doug Mayer said. The package, he said, ‘includes both roads and transit.’ …
“The Hogan administration has put forth an incentive package that makes Maryland competitive with any state or city in the country — we’re playing to win,’ Commerce Secretary Mike Gill said. …”