Denver could offer Amazon.com Inc. at least $9.8 million in incentives if the Seattle-based e-commerce giant decided to locate its second North American headquarters in the Mile High City, according to records obtained by Denverite.
Altogether the Denver Office of Economic Development highlighted seven incentive programs that could make it financially easier for Amazon to come to the city. OED officials maintained Tuesday that all numbers were preliminary and there would be public approval processes, but the documents released this month through the Colorado Open Records Act show how Denver is engaging in what the Brookings Institution called “one of the biggest competitions in history among state and local governments for a corporate expansion project.”
Amazon announced Sept. 7 that it’s searching for a home for its second headquarters, dubbed “HQ2.” The facility would employ as many as 50,000 people — which would put it on par with the town of Parker in terms of size — and bring more than $5 billion in construction and operations investments.
Colorado was one of the 54 cities, states, provinces, districts and territories that sent proposals for Amazon ahead of the company’s Oct. 19 deadline.
Denver and other cities in Metro Denver worked together to send one proposal.
“We think this is a great opportunity to maintain and grow our global innovation economy for current and future generations,” said Turid Nagel-Casebolt, director of business development at Denver Office of Economic Development.
Denver OED followed processes similar to what it’s done with Amazon, working with the state and Metro Denver Economic Development Corp., to lure major operations from Vertafore, BP Lower 48 and Pansonic.
To help attract Amazon, the Office of Economic Development said $9.8 million could be paid out through the Denver Business Investment Program during a four-year period. City officials based their tax rebate estimate on “the total value of business investment” from Amazon being $750 million, records show.
Other financial options highlighted include the Denver Business Incentive Fund where city officials OKed spending $4 million of taxpayer money to get Target on the 16th Street Mall; money from the city budget for Capital Improvement Investments; tax increment financing and general and business improvement districts.
A Benefit District that covered the entire Amazon campus could generate as much as $30 million through tax rebate collections over a 10-year period for mobility, placemaking and sustainability projects, according to the documents Denver sent to the state.
“This new innovative investment can be structured to meet the anticipated needs of the Amazon HQ2 project,” the records state. “The funds would be spent on projects and improvements creating a public benefit in the district as defined in the agreement, between the company (and other participating properties, if any) and the city.”
In addition to the incentive offerings, Denver said its Community Planning and Development department “will dedicate a multi-disciplinary strike team to work with you from concept through construction to ensure a smooth permitting process.”
A “toolbox” available to Amazon
“Traditionally speaking where we are right now is the very initial phase of the site selection process so at this point what we provided is just a sense of a toolbox that may be available to the prospect,” Nagel-Casebolt told Denverite.
Other cities in Metro Denver likely also provided state officials with incentive programs that could benefit Amazon. And Colorado could kick in additional funds through state programs.
The Denver Post estimates Amazon could grab a more than $746 million incentive package from the state largely due to all the jobs the company would bring.
“Local incentives can be a pretty important part of the picture, but it’s because the state of Colorado really doesn’t do much in terms of incentives and trying to attract primary employers,” said Kathie Novak, an assistant teaching professor at the University of Denver’s Daniels College of Business.
Novak has some experience working with the tools local governments can offer employers. She served as mayor of Northglenn from 2002 through 2009 and president of the The National League of Cities from 2008 to 2009.
“We heard incentives were things companies looked at, but more often than not they were just icing on the top,” she said. “If you didn’t have a good school system, if you didn’t have a good labor supply, if you don’t have a good quality of life, the incentives that a government could offer aren’t enough to tip the scale.”
Novak said she’s not concerned about what Denver or other local governments would offer Amazon.
“The elected officials, especially at the local level, in Colorado are pretty wise and rarely give away the farm to attract someone big. They have a keen understanding of what the potential impacts would be,” she said. “My concern comes as a lifelong Denver native who sees a 150,000 people a year moving to the Denver area. The impact on our infrastructure is something we’ll have to think about and figure out how to deal with more effectively.”
Amazon is expected to make its site selection decision sometime next year.
Nagel-Casebolt said, “At this point what we know through the request for proposal from the company is that they would want to communicate next steps and finalists by April of next year.”
Subscribe to Denverite’s newsletter here.