Columbus’ promises of big tax breaks and investments in transportation seem to have caught the attention of Amazon, which named the city one of 20 finalists for the site of its second corporate headquarters.
In its announcement on Thursday, Amazon ranked Columbus among bigger, more obvious choices like Denver, Washington, D.C., and Dallas. But among the 238 applications, Columbus did beat out fellow Ohio cities such as Cleveland and Cincinnati, though experts consider it a “long shot.”
Already A Win
While some national news organizations expressed mild shock to see Midwestern cities like Columbus and Indianapolis on the list, Aaron Renn, a senior fellow for the Manhattan Institute, says he wasn’t taken aback.
“I’m not surprised to see that those are the two cities on there," Renn says. "You’re talking about two cities that have rapidly growing population, the two fastest growing metropolitan areas in the Midwest.”
Add in the pipeline of The Ohio State University and proof that Columbus can get to a large scale of employment, like JP Morgan Chase’s 20,000 employees, and the city starts to make a certain sense for Amazon.
“If you’re going to hire 50,000 people, you’re going to have to grow your labor force," he says.
Still, there’s a lot of factors at play: the cost of housing, tax rates, local transportation. But Renn says no matter if Columbus gets the headquarters or not, the city’s presence on the list is already a boon.
“Whether or not Columbus even wins the actual competition, this is already a win," he says. "You didn’t have to invest too much time and attention and money, and now you’ve got a great credential, you’ve already gotten great press out of it—the Wall Street Journal—you can use this to validate yourself in the marketplace in the region and nationally as a place worthy of investment.”
What's In The Incentives?
Amazon’s HQ2, as they’re calling it, would expect to cost $5 billion and employ 50,000 full-time workers, with annual salaries of more than $100,000. The company said it wanted a mid-sized city with a population of more than 1 million and access to mass transit.
Columbus does not yet have that transit system, but in an incentives package included in their bid, city officials promised to build a new Transit & Mobility Fund “to support both transit and infrastructure investments to better connect the project sites.” Those locations include Franklinton and Easton, as well as The Ohio State University.
The city’s incentives package featured some $2.3 billion in savings for Amazon over a 15-year period, including a 100 percent percent property tax abatement for any headquarters site and a 35 percent refund for income taxes on new full-time employees. Columbus also promised to reimburse Amazon up to $75 million for the cost of land acquisition and site preparation.
"Amazon recognizes what we already know: America's opportunity city would provide an excellent home for Amazon," Mayor Andrew Ginther said in a video announcement on Thursday.
Columbus City Council declared in a tweet, “Here’s to hoping this isn’t the only Final Four we’re a part of this year.”
Here’s the full list of finalists:
- Austin, Tex.
- Columbus, Ohio
- Los Angeles
- Montgomery County, Md.
- New York
- Northern Virginia
- Raleigh, N.C.
- Washington, D.C.