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Amazon com : High-price bidding war over Amazon, car factory

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12/11/2017 | 01:19am CET

Dec. 10--HIGH POINT -- The chase by economic recruiters here and across the nation for the second headquarters of Amazon.com Inc. may turn into the most expensive incentives payout ever.

A separate economic duel by area recruiting teams for a joint car factory of Toyota and Mazda might not involve the same level of incentives payouts, but still will add up to the proverbial pretty penny, a national site consultant says.

So far, specifics haven't emerged on what dollar amount might amass as recruiters locally and elsewhere seek the second Amazon headquarters and the Toyota-Mazda factory. The executives of the companies in both projects are expected to make decisions on where to set up to do business early in the coming year.

The High Point area and Piedmont Triad are in the running for both projects.

Economic developers from Guilford and Forsyth counties submitted a coordinated bid to Amazon. Meanwhile, The High Point Enterprise has reported that the Greensboro-Randolph Megasite in northeastern Randolph County is a prime location for the Toyota-Mazda factory as North Carolina remains a finalist state for the project.

In both cases, the state of North Carolina and local governments may have to come up with significant incentives money to seal the deal, said site consultant John Boyd.

An area economic recruiter involved in both projects declined to discuss incentives with The Enterprise.

"I am sorry, but I cannot comment for this story," said Brent Christensen, president CEO of the Greensboro Chamber of Commerce and one of the area officials designated to handle media inquiries about the projects.

The payout package to lure the Amazon second headquarters could become one of the largest single economic incentives deals in history, said Boyd, president of the Boyd Co. based in Princeton, New Jersey.

"Amazon is the fifth-largest company in the U.S. today, and over the years it has garnered over a $120 billion in state incentives," Boyd told The Enterprise. "Incentives have been a big part of Amazon's growth strategy over the years."

Boyd said he expects the winning bid for the Amazon second headquarters could involve incentives of $1 billion or more. But the stakes are enormous -- the company is pledging a $5 billion investment and creation of up to 50,000 new jobs during a two-decade period for the community that lands the second headquarters.

The incentives for the Toyota-Mazda joint car plant, which would employ 4,000 workers, wouldn't rival the scope of the Amazon package, Boyd said.

"Still, Toyota-Mazda would probably expect something upwards of $200 million," he said. "Some of that incentives would go into workforce training grants for advanced manufacturing. It would go beyond traditional tax credits."

The possibility of massive payouts to corporations is inspiring a backlash. Last week, a group associated with the conservative, politically powerful Koch brothers blasted the idea of North Carolina making a huge incentives payment to Amazon.

"This is absolutely nuts, and we deserve far better than to see our hard-earned money funneled to large corporations who don't need the handouts," said Anna Beavon Gravely, spokeswoman for the political group Generation Opportunity-North Carolina.

Opposition to incentives cuts across the political aisle, as the practice draws criticism from liberal-leaning activists.

"It's the economic development elephant in the room: Why on earth do governments keep giving corporations tax break packages worth hundreds of thousands of dollars per job," according to the Washington, D.C.-based group Good Jobs First. The Good Jobs First statement was hooked to the looming Amazon incentives payout.

The debate about incentives to Amazon for its second headquarters takes place after company leader and founder Jeff Bezos was identified last month by the business news service Bloomberg as reaching $100 billion in worth for the first time.

Meanwhile, last month Toyota Motor Corp. reported increasing earnings for its fiscal year second quarter to $4.2 billion. Toyota is reporting that the company is on track to earn $17 billion for its current fiscal year.

Also last month, Mazda Motor Corp. reported that its operating profit for its second quarter increased to $325.2 million. Mazda reports that worldwide revenue grew to $7.6 billion.

Boyd told The Enterprise that economic incentives payouts can give rise to controversy, but have become a baseline of negotiations for major development projects.

"There's no question that incentives are politically contentious today because of the strong populist sentiment in America. Voters are weary and skeptical of incentives," Boyd said. "But incentives are really a necessary evil."

[email protected] -- 336-888-3528 -- @HPEpaul


(c)2017 The High Point Enterprise (High Point, N.C.)

Visit The High Point Enterprise (High Point, N.C.) at www.hpenews.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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