The rush to win Amazon’s approval for its second headquarters to come to Minnesota isn’t lost on officials who have decided to take a different tact to their competition. Instead of offering north of $1bn in sweetheart deals to attract Amazon to certain other states, the officials in Minnesota are relying on just $3m in benefits from programs that already exist.
The bid from Minnesota was submitted a day ahead of the deadline for states to put their best offer in before Amazon started to look at proposals for the location that would eventually employ as many as 50,000 people in the selected state.
Measured, Business-like Proposal
The governor of Minnesota, Mark Dayton, commented that the state was intentionally taking a different approach to other states because it was felt they had more to offer. Given that Amazon plans to employ 50,000 people at their second headquarters, the affordability of real estate MN is certainly a factor that puts it ahead of other markets like New York or California.
The proposal itself puts its focus on transportation, the workforce and the educational background. The idea of including quirky gimmicks to tempt Amazon was discarded because it wasn’t seen as something relevant for a real estate and incentives proposal of this kind. All indications suggested to them that Amazon were not interested in such things and looked at any proposal on the balance of the benefits to its company and the employees over the long-term.
Transport Links Seen as Key
For a global e-commerce company like Amazon, transportation hubs and easy airport connections are a big selling point. Whether it’s the ease with which key executives can fly around the country or better traffic management processes that avoid bumper-to-bumper traffic jams for hours on end of some other congested states, the time saved in transport adds up with a large workforce.
One thing that the commissioner of employment and econ development, Shawntera Hardy, was keen to point out was how well educated the Minnesotan workforce is. With a deep talent pool, this makes it far easier for Amazon to fill key positions with local people to avoid the costly relocation packages necessary to tempt people into a different state to work with the company at the headquarters.
Big Competition from Other States
The incentives offered by other states will be tough to beat though. Newark in New Jersey are offering a total of $7bn in tax breaks to Amazon which is the second largest offer of its kind by a US state.
Over in Chula Vista, the City Council wanted to welcome Amazon to the sunshine state with $400m of tax breaks. Not to be outdone, the Memphis City Council offered up $60m in tax breaks weeks earlier. Maryland is also expected to make a tax incentive offer that will beat most rivals.
It’ll be interesting to see which state wins and whether Amazon will explain their decision-making process after deciding on where their HQ2 will be situated. We can only wait and see.