New York’s initial offer to Amazon included $2.5B of incentives

Deal included $1.4B of tax credits and $1.1B of grants

TRD NEW YORK /
Jan.January 06, 2020 09:18 AM
Amazon CEO Jeff Bezos (Credit: Getty Images, iStock, Wikipedia)

Amazon CEO Jeff Bezos (Credit: Getty Images, iStock, Wikipedia)

New York offered Amazon $800 million more than was previously known in incentives to get the e-commerce giant to build its second headquarters in the city.

The state was also ready to pay portions of some employees’ salaries if Amazon came to the city, according to the Wall Street Journal, which obtained the information via a Freedom of Information Law request to Empire State Development.

New York offered up to $2.5 billion in incentives in October 2017, when it made its first formal bid to Amazon. This was split between $1.4 billion in tax credits and $1.1 billion in grants, and it was $800 million higher than the state agreed to in a memorandum of understanding it signed about a year later.

In that memorandum, New York committed to $1.2 billion in tax credits and $505 million to reimburse some of the cost of construction.

The city also suggested other sites for Amazon, including Downtown Brooklyn and Lower Manhattan, and it said Governors Island could be an “island retreat” for its workers.

ESD spokesman Matthew Gorton told the Journal that the state’s first offer was higher to bring Amazon to the negotiating table and to reflect the larger initial scope of its plan for a second headquarters.

“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,” he said.

After poor reception from locals and politicians, Amazon abandoned plans for bringing its second headquarters to New York City. But the e-commerce giant has since signed multiple leases for office and warehouse space throughout the boroughs. [WSJ] —Eddie Small


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