Newark gets ready to pitch Amazon a US$1B tax break

As the battle to land Amazon.com Inc.’s second headquarters comes down to the wire, one of the less glamorous contenders just added as much as US$1 billion in tax breaks to its pitch.

Newark, N.J., on Wednesday approved the big bag of cash, part of a Us$7-billion package the state is dangling in front of Amazon to capture HQ2, as it’s called. A trio of ordinances adopted at a city council meeting gives the payroll-tax exemptions to any company that creates 30,000 jobs and invests US$3 billion in New Jersey’s largest city over the next 20 years.

The inducements would be applicable to other companies should Amazon decide to build its Us$5-billion campus elsewhere, said Aisha Glover, president of the Newark Community Economic Development Corp., which oversees business opportunities.

“This is not Amazon legislation,” Glover said in an interview. “This is for transformative projects.”

It is certainly one of the largest known subsidy packages offered by the 20 places on Amazon’s shortlist, which include Los Angeles, Denver, Miami, New York, Boston, three parts of the Washington, D.C., region and, outside the U.S., Toronto. Most of the candidates haven’t disclosed their offers.

The Seattle-based e-commerce company last year announced plans to seek the second headquarters to accommodate as many as 50,000 employees over the next 18 years, triggering the competition in an initial field of 238 locations.

Many of those attending a public hearing for the ordinances Wednesday had harsh words for them.

“I’m enraged,” Bessie Walker, a former councilwoman, said in an interview after addressing the body. “No one is explaining this mess. Amazon is a billiondollar corporation. Why do we need to defer their payroll taxes? We’ve got to stop giving away these incentives. Newark is already a mecca.”