Arlington's Amazon Incentives: 'One of the Sweetest Deals a Corporation Has Ever Gotten' - NBC 5 Dallas-Fort Worth

Arlington's Amazon Incentives: 'One of the Sweetest Deals a Corporation Has Ever Gotten'

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    Arlington's Amazon Incentives: 'One of the Sweetest Deals'

    Last week, Arlington provided the first, substantive look at what any local city still in the running to secure Amazon’s massive HQ2 project has been willing to offer in terms of incentives. (Published Monday, May 21, 2018)

    Last week, Arlington provided the first, substantive look at what any local city still in the running to secure Amazon’s massive HQ2 project has been willing to offer in terms of incentives.

    On Tuesday, Arlington announced its bid to lure the online retail giant, and its promised initial investment of $5 billion and the creation of 50,000 jobs, is “no longer moving forward in the selection process.”

    Along with its announcement, the city released the long list of economic incentives it was prepared to offer Amazon - $921 million in what Arlington called “performance-based incentives.”

    Among the primary incentives were:

    - 100 percent real and business personal property tax abatement for a 10-year period

    - Waiver of building and impact fees

    - A land and infrastructure grant to assist with redeveloping the site

    - Creation of a Municipal Management District

    Dr. Cullum Clark, the Director of the Southern Methodist University Economics Research Center, noted that he was not surprised to see the long list of economic incentives that Arlington offered to Amazon. But he stressed that he is surprised to see that, given the list, Arlington is already out of the running.

    “The Arlington deal was incredibly sweet [for Amazon]. I would be a little concerned, frankly, about giving up so much tax revenue from what would be the biggest employer in town for so very long,” Dr. Cullum said. “I would think it would go down as one of the sweetest deals a corporation has ever gotten had these exact terms actually gone into effect.”

    Richard Greene, the former, longtime Mayor of Arlington, from 1987 to 1997, is widely credited with leading successful efforts to keep the Texas Rangers and General Motors in Arlington.

    Greene is a proponent of cities making mutually beneficial offers to big employers in order to lure or retain them.

    “It would have been a win-win outcome,” Greene said about the Amazon offer. “The city doesn’t provide incentives to corporate America unless the return to our community over time is greater than the city’s support.”

    The City of Arlington noted in its release last week that the “the size of the performance-based incentive package directly correlated to the size of the investment being proposed by Amazon.”

    According to the city’s 10-year economic model, HQ2 could ultimately have brought 96,000-plus permanent jobs, almost $50 billion in salaries and wages and almost $4 billion in taxable sales.

    “The way the program works is the corporate recipient either delivers the results it promised or it loses the incentives,” former Mayor Greene said. “If done right, it’s a long term win for the city, its residents and its business community.”

    Not everyone sees it that way, including representatives of the Texas Public Policy Foundation, a conservative think tank based in Austin.

    Bill Peacock, the Vice President of Research at the Texas Public Policy Foundation, told NBC DFW that incentives such as the ones Arlington was offering can be counterproductive.

    “One of the problems is that it takes money from people who need it – taxpayers – and it gives it to big corporations who have lots of money already,” Peacock said. “So really the incentives are going the wrong way. They are giving up, the taxpayers are giving up their own money to create jobs for other people and they are never going to see them.”

    The Dallas region was named as one of the 20 finalists for a second Amazon headquarters earlier this year. Within the local area, several cities have acknowledged that they have made bids to host HQ2: Dallas, Fort Worth, Frisco, Grapevine, McKinney, Plano and Richardson are among them.

    Dr. Clark, from SMU, described the public process Amazon is undertaking to select the site for HQ2 is further evidence that Jeff Bezos, the founder, chairman and CEO of Amazon is “the most consequential business leader of our time.”

    While Dr. Clark heaped praise upon Bezos, he noted that the arms race that Amazon has created is not entirely positive for the participants.

    “What you get in an arms race situation is that everyone winds up in a situation they probably wish they weren’t in, but they have no choice but to respond to their competitors,” Dr. Clark said. “So if any credible location for Amazon is going to offer a really sweet deal, and [the Arlington deal] would have been a sweet deal, then everyone else has to offer it, too.”

    Amazon is expected to announce its final pick at some point this year.

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