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Newark Passes $2bn Tax Incentive to Bring Amazon’s HQ2 Headquarters to Newark


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8/15/2018
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Newark Passes $2bn Tax Incentive to Bring Amazon’s HQ2 Headquarters to Newark

On Wednesday, Aug. 8, the Newark City Council passed a set of ordinances which offer Amazon a $1bn tax waiver of Newark’s 1% payroll tax and a second 30-year property tax exemption worth an additional $1bn.  To get these tax benefits, Amazon must launch a “transformative corporate headquarters” that would generate at least 30,000 new jobs and invest at least $3bn over 20 years in developing and improving the corporate footprint.

"I am proud to stand by the strong leadership of Mayor Baraka and all who are speaking in a clear and unified voice that Newark is ready to lead and win the Amazon bid," Gov. Phil Murphy said in a statement Wednesday. "Let there be no doubt: we are all in this together and Newark will continue to rise as one."

The City of Newark submitted its “Yes Newark” application to Amazon in April, detailing plans by various participants including Fidelco (a realty concern) and Rutgers-Newark to participate in development activities to accommodate the new office park.  Proposals talk about practical aspects like parking, housing, and dining establishments to accommodate the additional workforce.  L+M Development Partners and Boraie Development have plans for hundreds of additional housing units in the downtown area over the next three years.  Boraie, for instance, has plans for Shaq Tower, 777 McCarter Highway, and an additional project near Penn Station.

Earlier in April, Gov. Phil Murphy, Mayor Ras Baraka, Corey Booker and Ray Chambers met with Amazon representatives to discuss where in Newark it could move its HQ2 headquarters if chose the Garden State as its new home base.  At least six different sites were identified which might fit the bill.  Murphy, Baraka and Chambers then dined out with the Amazon team at Mompou -- a well-known tapas and wine bar in Newark.

On January 8th, the New Jersey legislature signed off on a $5 billion incentive package to lure Amazon to the Garden State.  The Transformative Headquarters Economic Assistance Program under the Grow New Jersey Program and be administered by the New Jersey Economic Development Authority

This legislation came in reaction to Amazon naming NJ as one of 20 U.S. metros that made the cut as finalists for Amazon’s new corporate headquarters, referred to as HQ2.  Amazon has promised the winning City a fleet of driverless cars, a massive online library, and the development of entire housing communities.

"When a company like Amazon is looking to invest billions and create tens of thousands of jobs, we simply cannot afford to be overlooked," state Sen. Samuel Thompson, R-Middlesex, a bill sponsor, said in a statement. "This legislation sends the message that New Jersey is a serious contender."  

https://www.nj.com/essex/index.ssf/2018/08/newark_2_billion_incentive_amazon_hq2.html

https://www.nj.com/politics/index.ssf/2018/01/nj_legislature_clears_way_for_5b_in_amazon_tax_bre.html

https://www.businessinsider.com/amazon-second-headquarters-cities-newark-new-jersey-bid-2018-4

https://www.nj.com/news/index.ssf/2018/04/heres_where_newark_proposes_to_build_a_new_amazon.html

https://jerseydigs.com/newark-amazon-application-reveals-downtown-development-plans/



Category: Tax Law


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