NY officials initially offered Amazon $800M more than previously known for HQ2

a photo of Amazon's logo displayed on three screens

New York state officials offered Amazon nearly $1 billion more in incentives than was previously known to convince the tech behemoth to build its second headquarters in New York City. 

Documents reviewed by The Wall Street Journal, which were obtained through a Freedom of Information Act FOIA request, showed that the state offered to provide up to $2.5 billion in incentives to Amazon and was also prepared to pay part of some employees’ salaries. 

The first offer also included $1.4 billion in tax credits contingent on the number of employees hired and $1.1 billion in various grants. The total was ultimately $800 million more than the state initially agreed to in a memorandum of understanding.

The final agreement included $1.2 billion in tax credits, $505 million to reimburse some construction costs and another $1.3 billion through two programs available to any company.

The state told the Journal that its initial offer was higher to reflect the earlier plans for a larger Amazon campus than was ultimately agreed upon.

“Throughout the negotiating process, we sharpened our incentive package and ultimately secured a better return on investment for the state and the biggest economic development opportunity in New York’s history,” said Matthew Gorton, a spokesperson for Empire State Development, the state’s economic development authority. 

At the end of the bidding process, Newark, N.J., ultimately offered the largest proposal to Amazon, putting up $7 billion, while officials in Maryland offered $5 billion.

The tech company ultimately announced plans to lease a space in Manhattan for 1,500 employees.

While critics of the move said Amazon’s HQ2 will raise the cost of living for the area’s residents, supporters have said the new campus is estimated to increase city and state tax revenue by as much as $27.5 billion over 25 years.

“They demonstrated to Amazon that New York City and state cared about the project and that they had skin in the game,” Kathryn Wylde, president of the Partnership for New York City, a business group, told the Journal of the state’s incentives. “That’s really the point when you’re trying to attract major headquarters operations.”

Tags Amazon Amazon Amazon HQ2 Empire State Development Wall Street Journal

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