(Source: AZCentral): Russ Wiles & Jessica Boehm – Park Central Mall in midtown Phoenix, plus sites in Tempe and Mesa may be the new Amazon HQ: Amazon now will consider those options for its giant second headquarters, along with hundreds of other proposals submitted from across the nation and Canada.
The online retailing giant set a Thursday deadline for North American cities and states wanting to vie for up to 50,000 high-paying jobs, $5 billion in direct investments and huge bragging rights. The competition has been intense, though few participants have revealed many details of their proposals.
“It is our policy that we do not discuss active economic-development projects,” said Susan Marie of the Arizona Commerce Authority in an email to The Arizona Republic. The organization says it is leading the state’s proposal effort.
“We’ve made a very strong case in our proposal, and we would of course be thrilled to welcome Amazon to our state,” she added, citing recent corporate headquarters relocations, including manufacturer Carlisle Cos. and specialty-materials company Rogers Corp.
But Phoenix Mayor Greg Stanton, in an interview late Thursday, confirmed that Park Central Mall north of downtown Phoenix is one of the proposed sites, along with locations in Tempe, on or near the Arizona State University campus, and Mesa.
Amazon hasn’t said when it will announce the winner, though many outsiders expect the evaluation process to continue into next year. Pittsburgh’s proposal, described as 2 inches thick, illustrates the amount of materials through which company officials must sift.
On its wish list, Amazon has said it wants to build its new campus in a metro area of at least 1 million people located in a business-friendly state, with a strong education system, good public transportation and an international airport nearby.
The company hasn’t specified tax breaks and other incentives, though those are clearly on the table in many cases. The Arizona proposals apparently don’t come with special incentives.
Newark and the state of New Jersey have thrown down an impressive gauntlet amounting to $7 billion in tax incentives. “Let any state go and try to beat the package with what we have here in Newark,” said Gov. Chris Christie, as quoted in the Wall Street Journal, though the package isn’t so impressive as it appears on the surface.
Of the total, $5 billion would come from state business-tax incentives spread over 10 years, $1 billion would come from waived local income taxes in Newark and $1 billion from Newark property-tax abatement.
But New Jersey taxes already are much higher than in places like Arizona, and cities here don’t levy a personal income tax like the 1 percent flat rate in Newark.
In fact, New Jersey’s business-tax structure ranks as worst in the nation, according to a 2017 report by the Tax Foundation. The research group said New Jersey is “hampered by some of the highest property-tax burdens in the country, is one of just two states to levy both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country.”
New York is second worst and California third worst for business taxes overall, according to the study.
Arizona’s proposals aren’t likely to offer anywhere near $7 billion in terms of government subsidies, joining plenty of other cities and states in this regard. For example, New York City’s pitch will focus on factors such as 300,000 skilled tech employees in the region but no special tax breaks for Amazon, according to an article in the New York Times.
Amazon CEO Jeff Bezos, now the second-wealthiest American after Microsoft founder Bill Gates, hasn’t indicated that he will move his residency to the place where the company locates its second headquarters. But many high-ranking Amazon executives will wind up there, which should give the company pause about inheritance and estate taxes, which many states, including Arizona, don’t levy.
Arizona doesn’t have the best business-tax structure, either (Wyoming does), but at least it’s going in the right direction, with the state gradually reducing its top corporate income-tax rate, the Tax Foundation noted. That helped Arizona improve its overall business-tax ranking to 21st place this year from 22nd place in 2016.