Tech

Amazon reportedly wanted to secure $1 billion in incentives on top of HQ2 deal

Key Points
  • Amazon CEO Jeff Bezos and his senior executive team hoped to secure $1 billion of incentives to pursue real estate projects, The Wall Street Journal reported Thursday. 
  • The $1 billion goal was on top of the incentives it expected to receive from building its second headquarters.
  • Amazon was forced to pull out of its plans to build a headquarters in New York City after local activists and officials criticized the $3 billion in incentives offered to the company.
Jeff Bezos, founder and CEO of Amazon, pictured on September 13, 2018.
Bloomberg | Getty Images

Amazon CEO Jeff Bezos and his senior executive team sought $1 billion in economic incentives for real estate projects around the country, on top of what the company expected to receive for HQ2, The Wall Street Journal reported Thursday.

The company set the lofty incentive goal in 2017 as it experienced high capital investment costs, according to the Journal. Executives hoped to secure $1 billion worth of incentives to pursue real estate projects, on top of the inducements it expected to receive for its second headquarters, called HQ2.

Amazon ultimately abandoned the plan after it was unable to secure $1 billion in incentives and decided it wasn't the right course of action, the Journal said. It's unclear what kinds of incentives Amazon had hoped to secure.

An Amazon spokesperson said the company doesn't have goals for the amount of incentives it receives.

"Like many other companies, we are eligible to access incentive programs created and regulated by cities and states to attract new investors – as they know that these investments pay a long-term dividend in the form of jobs, new economic opportunity, and incremental tax revenue," the spokesperson said. "The vast majority of these incentives are statutory and post-performance – Amazon is eligible only after having created and maintained a certain number of jobs within the community."

In 2017, Amazon launched a nationwide search for its second headquarters, which kicked off a bidding war among states across the country. Officials tried to lure Amazon by offering copious incentives, such as tax credits and grants, in exchange for the promise of job creation and other investments from the company.

Amazon was forced to abandon its HQ2 plans in New York City's Long Island City neighborhood after it faced local opposition. Before it pulled out, Amazon was set to receive $3 billion in incentives, as well as $800 million in tax credits and grants, according to a separate report from the Journal.

Construction is set to begin soon on Amazon's second headquarters in northern Virginia. The company will receive about $573 million in performance-based incentives from the state and local government, as well as a $23 million cash grant paid over 15 years from the county, tied to expected increases in hotel tax revenue to the area.

Amazon is also building an Operations Center of Excellence in Nashville, Tennessee, where it's expected to receive up to $102 million in performance-based incentives for its investment there.

Read the full report from The Wall Street Journal here.

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