Wake dangled $100M-plus in Amazon tax breaks
Posted November 15, 2018 3:09 p.m. EST
Updated November 15, 2018 3:23 p.m. EST
Raleigh, N.C. — Wake County was willing to give Amazon a $277 million tax break to come to the county, though $106 million was the more likely figure.
Why the difference? The speculative nature of tax incentives and the fact that property values and construction costs in the Triangle are generally much lower than the costs Amazon assumed when it put out a nationwide call for incentive deals.
County officials told the company that the most expensive commercial property in the region runs about $200 a square foot in tax value. Add in another 10 to 15 percent for other assets, and the total value of the grant Wake County was pitching rang in at about $106 million, the county said.
Using Amazon's more robust expectations of $600 per square foot, the grant could have gone as high as $276.75 million. That was a max-out presented to county commissioners, Assistant County Manager Chris Dillon said Thursday.
"We didn't want any of the commissioners to be surprised," Dillon said. "We just wanted to make sure the commissioners knew it would never go above this figure because these prices are a little bit out of our market."
It turned out to be moot. Amazon announced earlier this week that the second headquarters project that cities across the country have been competing over will be split between New York and Northern Virginia.
Wake County and other North Carolina governments mostly kept their offers a secret while the competition was open, but the county released its offer Thursday under the state open records act. The project was codenamed "Project Smith," the documents revealed.
State incentives, and potentially incentives from local municipalities, would have gone into the deal as well, but those figures haven't been released yet, leaving the total offer Amazon had in hand to come to North Carolina unknown.
It's likely the state's incentives would have been larger than the county's.
Wake County was willing to go above its usual maximums for the project, which promised more than 50,000 new jobs, average salaries above $100,000 and some $6 billion in capital investment over 15 years.
This county grant program typically reimburses companies for up to 50 percent of the new property taxes they generate for up to eight years. The county was willing to boost that to 15 years. Officials also planned to waive a requirement that the county only match tax breaks offered by its municipalities, essentially doing away with a cap on the county's program.
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Initial reports put the total incentives Amazon will receive from Virginia, New York and Tennessee, where the online retailer will locate an operations hub, in the neighborhood of $2.4 billion. A subsequent Associated Press report put the total incentive package from New York City and New York state alone as high as $2.8 billion.
Gov. Roy Cooper said several times during the bidding process that North Carolina's offer would be competitive, but it wouldn't be the largest Amazon received.
Maryland reportedly offered as much as $8.5 billion and New Jersey $7 billion.