Amazon Incentive Package
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The City of Fort Worth and the Fort Worth Chamber of Commerce have released the details of a presentation sent to Amazon last fall highlighting the benefits of Fort Worth as a business destination and outlining an incentive proposal worth a total of $443.2 million from the City.
The City of Fort Worth offered a Chapter 380 economic development grant worth up to $438 million based on Amazon’s $750 million in capital investment and at least 10,000 jobs. The city also included $1.5 million in fee waivers and a $3.75 million Enterprise Zone nomination, the chamber and city said in a news release.
Through that partnership program of the state and a municipality, approved projects are eligible to apply for state sales and use tax refunds on qualified expenditures at the business site. Level and amount of the refund is related to the capital investment amount and number of jobs created, and the Amazon HQ2 project was offered the maximum amount allowed. Fort Worth’s total does not include any state contributions to the effort.
In May, the city of Arlington, which dropped out of the bidding for Amazon, said it offered the technology and retail giant $921 million in “performance-based incentives” as part of its bid. But it wasn’t clear if that included state incentives.
But Amazon’s decision wasn’t based entirely on incentives. Other requirements included being near metropolitan areas with more than a million people, have nearby international airports, direct access to mass transit, an educated, technology-savvy workforce and have room for the company to expand. The Texas sites met many of those requirements, but so did the other sites chosen.
The state’s contribution would likely have come thought the Texas Enterprise Fund, basically monies set aside that the governance can use to attract businesses to the state. In May of this year, for instance, the TEF awarded a grant of $730,000 to advanced medical equipment and technology provider Smith & Nephew Inc. for a project that will create 100 new jobs in Fort Worth. Fort Worth was competing with Oklahoma, Tennessee and a site in England for the project.
But larger projects can command more funds from the state. When Toyota announced plans to relocate its North American headquarters and an attendant 4,000 jobs to Plano in 2014, the state’s TEF kicked in $40 million.
“I think our package was competitive to other communities,” Brandom Gengelbach, executive vice president of economic development, Fort Worth Chamber of Commerce, said in the news release.
“It’s like the Super Bowl, there are lots of bright lights and extra attention, but it’s the same game you’ve played a thousand times before. You don’t win or lose a project on incentives alone. The criteria and approach businesses use to determine a potential expansion or relocation do not change,” Gengelbach said.
The city offered to reimburse up to 90 percent of incremental taxes on real and business property for a 20-year period. Tarrant County offered to abate up to 70 percent over a 10-year period.
Fort Worth partners also offered to help secure discounted airfare and a dedicated service and check-in station for Amazon employees at Dallas Fort Worth International Airport, and to work with Amazon on the installation of Smart City and Smart Building technology for HQ2.
Seven qualified sites and site combinations were proposed in the package including Sundance Square, Panther Island, AllianceTexas, Walsh, Clearfork and Overland, which is an area south of Clearfork. Fort Worth touted access to abundant and diverse talent, STEM education efforts and university partners, effortless logistics and multi-modal travel, and a community spirit that “defies expectations,” the news release said.
Going forward, Gengelbach says the region may be using new ideas generated by the Amazon pitch, such as a split HQ between Dallas and Fort Worth with the Trinity Railway Express (commuter rail) connecting the two.
That would leverage the full strength of the DFW Metroplex, allow more efficient utilization of community resources and maximize the region’s labor force.
“We are currently working with more than 60 potential projects for the Fort Worth area that range in employee count and investment, with 25 percent of the pipeline from existing businesses,” Gengelbach said. “We are also managing projects and doing deals in communities outside of the Fort Worth city limits, communicating with our regional partners almost daily.”
Amazon kicked off its hunt for a second headquarters in September 2017, initially receiving 238 proposals before narrowing the list to 20 in January, with the Dallas and Austin areas making the initial cut. Amazon announced Nov. 13 that it will build its second and third headquarters in New York and Crystal City, Virginia, just outside Washington, D.C.
Amazon could get more than $2 billion in tax breaks and other incentives as part of its deals to open up two new offices with more than 25,000 new jobs at each location. New York City and Arlington, Virginia, will be home to two new nerve centers, which are being called the second and third headquarters for the Seattle-based online technology company. Nashville, Tennessee, was named as an operations hub.
The Dallas Regional Chamber led the DFW Region’s unified response to Amazon’s HQ2 opportunity. The DRC worked closely with the Fort Worth Chamber and dozens of regional economic development partners, elected officials, community leaders, and the State of Texas, the Dallas Regional Chamber organized and delivered a comprehensive and compelling bid.
