Gov. Tom Wolf says Pennsylvania offered $4.6B in incentives for Amazon

Pennsylvania offered up to $4.6 billion in state-backed financial incentives to Amazon to entice it to locate its next headquarters in Pittsburgh or Philadelphia, records disclosed Tuesday by Gov. Tom Wolf’s office show.

The price tag of Pennsylvania’s proposed subsidy package reinforces speculation that as Amazon mulled where to expand its U.S. footprint, the tech giant cared more about factors such as transportation and local talent pools than which states were dangling the highest government-backed bids.

The winning locations — new headquarters in New York and Virginia and an operations center in Tennessee — offered government subsidies from states and municipalities totaling more than $3 billion.

A bid from Newark and New Jersey included tax incentives totaling $7 billion. Maryland offered the highest amount of incentives at $8.5 billion. Chicago and Illinois offered incentives totaling $2 billion.

In its state-level proposal to Amazon, the Wolf administration said Pennsylvania was willing to offer up to $4.6 billion in financial perks, including up to $4.5 billion in performance-based grant funding and $100 million toward state transportation improvements, in exchange for Amazon creating 50,000 jobs and $5 billion in investments. The state pledged to renew the grant annually for up to 25 years, based on the amount of personal income tax collected from Amazon employees, said the letter, signed by Department of Community and Economic Development Secretary Dennis Davin on behalf of Wolf and in partnership with the General Assembly.

As proposed, the performance-based grant program “could also apply to other businesses in other communities as well,” DCED spokesman Michael Gerber said. The program would have required legislative approval and “gone through a full public vetting process prior to being enacted,” Gerber said.

Disclosure of Pennsylvania’s $4.6 billion bid does not include offers from municipalities such as Pittsburgh and Philadelphia. The state was one of two with two cities that made Amazon’s short list of 20 cities announced in January.

The city and county had not released any details about the bid or the incentives offered in it as of late Tuesday. They went to court to fight open records requests filed under Pennsylvania’s Right to Know Law to make the bid public. Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald have said the incentives would become public after Amazon announced where HQ2 would go.

Among government incentives Amazon now is slated to receive:

• New York: $2.998 billion based on creating 25,000 jobs. The state offered a tax credit of up to $1.2 billion based on a percentage of salaries Amazon expects to pay employees in New York over the next 10 years, plus a $505 million grant and $1.28 billion in additional tax breaks. New York will also use a portion of Amazon’s portion of the company’s property taxes to fund community infrastructure improvements.
• Virginia: $573 million based on 25,000 new jobs. The state gave Amazon a $550 million grant, and Arlington gave the company a $23 million grant based on the expected growth of a hotel tax in the city. Virginia will invest $195 million in infrastructure in the area including Crystal City and the Potomac Yards Metro stations. A pedestrian bridge connecting National Landing and Reagan National Airport will be built. Arlington established a $28 million Tax Increment Financing district for National Landing.
• Tennessee: $102 million based on 5,000 new jobs. Amazon will build its new Operations Center of Excellence in Nashville’s downtown along the Cumberland River, a $230 million in investment in a 1-million-square-foot office.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, nlindstrom@tribweb.com or via Twitter @NewsNatasha.