Business

In losing Amazon HQ2, NC learned how to lure others

Posted November 30, 2018 12:49 p.m. EST
Updated November 30, 2018 10:24 p.m. EST

— North Carolina offered Amazon at least $2.2 billion worth of incentives to establish its second headquarters – Amazon HQ2 – in the state, according to hundreds of pages of documents the state released Friday.

The documents pertain to the state's failed attempt to woo the economic development jackpot, which is expected to create 50,000 jobs. Amazon has decided to split the project between Northern Virginia and New York City.

"If we had lost out to Columbus, Pittsburgh, Nashville or Austin – those cities we're comparable to in size – I think that would have sent a message that we have to rethink our strategy," said Mike Walden, an economist at North Carolina State University.

By picking New York and the Washington, D.C., areas, Walden said it's clear Amazon was more interested in major cities with connections to power brokers. But he courtship likely has made the Triangle more attractive to other companies.

"Being on that Top 20 list for Amazon, we can use that in recruiting, and people know [we] were right there," he said. "The fact that we lost to D.C. and New York is nothing to be ashamed of.

"We're not going for the grand slam; we're going for the singles and doubles, and we're still going to score," he added. "In terms of being an attractive place, I think, for just about any business in the country and the world, I think we're right there."

North Carolina was prepared to offer up to $2.2 billion though the Job Development Investment Grants program. JDIG grants rebate part of the state withholding taxes from new jobs to relocating or expanding companies that meet specific hiring and investment targets each year.

In addition, Wake County said it would dedicate more than $1 billion in local funds in mass transit over the next 10 years. That would triple available bus service and include a Raleigh-to-Durham light rail line.

Walden said losing out on Amazon gives the Triangle an opportunity to continue to grow at an even pace while working on improving housing and public transit concerns.

"What did you hear about some of the downsides about Amazon coming? You heard about traffic congestion. You heard about higher housing prices," he said. "I do think those would have been issues with such a big facility."

Local leaders offered several possible locations for HQ2, but according to one document, the site the company liked most had been designated "Parks & Partners" and was between Dorothea Dix Park and North Carolina State University’s Centennial Campus.

The same document, an email from Christopher Chung, chief executive of the Economic Development Partnership of North Carolina, to William M. Miller at the state Department of Commerce, noted that Amazon was not looking at Research Triangle Park but was willing to look at downtown Durham.

And Amazon was apparently unconcerned about the rumors that Apple was also eyeing Raleigh.

"They did not ask any questions about the ongoing Apple rumors, nor did we bring up the status of 'Project Bear.’ Right now, we don’t know how any decision by Apple might impact Project Smith," Chung wrote.

"Project Smith" was the state's code name for the effort to woo Amazon. The effort included representatives from the Durham Chamber of Commerce, the City of Raleigh, the RTP Foundation, Wake County Economic Development, the Research Triangle Regional Partnership, the North Carolina Department of Commerce and the Economic Development Partnership of North Carolina.

Among the group’s efforts was a clandestine visit by Amazon officials to the area in March. After a day of interviews and bus tours of the region, the Amazon reps were treated to a reception and dinner at The Bridge Club in downtown Raleigh, followed by a night’s lodging at the Aloft Raleigh hotel.