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Report: HQ2 incentive package could top $2.25 billion

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Illinois

* The Sun-Times breaks down the state and local incentives package for Amazon’s second headquarters…

Roughly $1.4 billion in state EDGE tax credits. The newly-revised program provides a 50 percent tax break for every job they create in Illinois.

$60 million in property tax breaks through the city and county programs known as Class 7B and 7C.

$450 million in site-specific infrastructure improvements that would come from the Illinois Department of Transportation, the Chicago Department of Transportation, the CTA and other agencies.

$250 million worth of investments in education, workforce development and “Neighborhood Opportunity Funds” to make certain that all Chicagoans can qualify for the 50,000 high-end Amazon jobs and that businesses that spring up or move here to support Amazon locate in Chicago neighborhoods.

Free land worth $100 million, if Amazon chooses to build its second headquarters at the old Michael Reese Hospital site purchased by former Mayor Richard M. Daley as the site for an Olympics Chicago didn’t get. If Amazon chooses either to re-purpose or demolish and rebuild the Thompson Center that the state has been trying desperately to sell, the free land would be worth even more money.

Barring the possible free land incentive, that works out to about $45,000 for each of the promised 50,000 jobs.

posted by Rich Miller
Monday, Oct 23, 17 @ 11:39 am

Comments

Better translate into $90K/year salaries for each of the jobs promised then, too…

Comment by Amazonnoyed Monday, Oct 23, 17 @ 11:47 am
Those that need the incentive the least are those who are given the most help.

Comment by Saluki Monday, Oct 23, 17 @ 11:49 am
But at least the $1.4 billion in EDGE credits is over 10 years, not all up front.

Comment by My button is broke... Monday, Oct 23, 17 @ 12:05 pm
What clawbacks are tied to these incentives? Does EDGE have any built into the structure of the program? What parts of the this package does Amazon forfeit if it fails come through on its promises?

Comment by Montrose Monday, Oct 23, 17 @ 12:13 pm
Not horrible, I think the state would ultimately come out ahead if these are truly high paying jobs. Think of it likme a reverse bond. Amazon gets a chi k of money and we collect sales tax, inc tax, property tax every year from the empmoyees; plus we get synergy economically from the increased spending in local stores, restaurants, theaters etc

Comment by Ghost Monday, Oct 23, 17 @ 12:13 pm
sounds like its good to be a real estate person connected to this deal. I wish I was a zoining person or on a illinois finance authority board. If I was I would always look out for my families best interest. Some of these mover and shakers use clout to burn there own kids in a public forum

Comment by Anonymous Monday, Oct 23, 17 @ 12:53 pm
On the mark .. Saluki

The HQ2 is not yet designed, permitted nor bid – it is a fantasy in some billionaires mind. Meaning it is at least 3 years out before any return can really happen due to the supposed staffing.

Instead, Lets spend the $2.5 billion – NOW in local, small and moderate businesses across the state. Many of those likely could be in place in a year maybe less! This allows the growth factor to begin 2 years earlier. This allows the entire state to benefit rather than a small area.

The only reason for the current hawking of HQ2 is so a few politicians can trumpet how magnificent they are. Rich identifies the return per worker is about break-even ($45k each for 50k jobs) – and that does not take into account the spread over 10 years.

Other economic analysis of similar projects across many states and incentive combinations (stadiums, super malls, fabulous it towers) has shown these mega, bragging rights deals are a loss for the general economy.

Comment by Jim O Monday, Oct 23, 17 @ 12:58 pm
1.4% just cut IDOT’s budget by $390 million. Where is he going to find $450 million for these roadway and infrastructure improvements?

Comment by Huh? Monday, Oct 23, 17 @ 1:05 pm
I am certain there will no no harsh editorials in the liberal Washington Post criticizing the corporate welfare Amazon is demanding from every bidder.

Comment by Lucky Pierre Monday, Oct 23, 17 @ 1:06 pm
2.25… won’t be enough. The “winner” of the Amazon sweepstakes will be handing them 4 large.

Comment by Ducky LaMoore Monday, Oct 23, 17 @ 1:22 pm
Why not raise income taxes to pay for more tax breaks for poor little old Amazon. The Governor and Mayor really want this deal done for their upcoming campaigns.

Comment by Greedy Me Monday, Oct 23, 17 @ 1:23 pm
So let’s just build the new Amazon headquarters with taxpayer dollars, yet the SOI wants to complain they have no money. They didn’t offer to help build my business.

Comment by Crispy Critter Monday, Oct 23, 17 @ 1:53 pm
Gosh, for that kind of money, we could build two sports stadiums (banned symbol) /snark

Comment by Skeptic Monday, Oct 23, 17 @ 2:31 pm
“Those that need the incentive the least are those who are given the most help.”

Correct. Voters historically haven’t been very forgiving to public officials that give incentives to businesses that fail. Hence why the strongest bets garner the most enthusiasm from public officials.

Comment by sulla Monday, Oct 23, 17 @ 2:42 pm
While folks criticize this, it’s a good deal in comparison to Wisconsin and Foxcon. The days of company’s asking and Government’s saying no has come and gone.
So either your in the game or your not.

Comment by DuPage Bard Monday, Oct 23, 17 @ 3:17 pm
No, DuPage Bard, the time for Government to say no is now. The act of kowtowing and appeasing large capitalist organizations (which take more out of communities than they contribute) is unnecessary.

The idea of ‘company towns’, i.e., communities built around a single $5 billion plant, is well defined historic disaster - the rust belt is full of dead cities which had mammoth steel mills, or coals towns, or more recently the shale oil boom towns of North Dakota areas.

For me, the far better path is to have 1000 businesses processing $5 million each than 1 business of $5 Billion. One sniffle of the mega-business and that economic area plunges.

Comment by Jim O Monday, Oct 23, 17 @ 3:44 pm
40,000 of the 50,000 thousand promised jobs should fall
under the Chicago residency rule that the teachers, firemen
and policemen have to abide by. I also don’t see the unions
rolling over for Amazon warehouse jobs. It’s a lot of money
promised for a on the come bet.

Comment by Anonymous Monday, Oct 23, 17 @ 4:22 pm
–Barring the possible free land incentive, that works out to about $45,000 for each of the promised 50,000 jobs.–

That’s it? Shocking.

Right now, in Rauner’s new (old) campaign video, he’s bragging about bailing out the Exelon nukes.

That was a rate increase on citizens of $235M to “save” 1,500 jobs at Clinton and Quad-Cities. That comes to $156K a job a year in real cash money to the Exelon bottom line, not incentives.

And Exelon was bluffing, to boot. They weren’t gong to shut down those plants.

Right now, Rauner is bragging in his campaign

Comment by wordslinger Monday, Oct 23, 17 @ 4:39 pm
How much of the $2.25B would IL get back in jobs and taxes?

Comment by MAMA Monday, Oct 23, 17 @ 5:12 pm
How much of Amazon’s operation will be automated?

Comment by Mama Monday, Oct 23, 17 @ 5:14 pm
Hope there is a time frame locked into what qualifies as an Illinois job

Comment by Sup wit dat Monday, Oct 23, 17 @ 6:57 pm
Seems reasonable. Illinois has zero tax revenue from the potential Amazon employees without the EDGE tax credit.

Comment by Anonymous Monday, Oct 23, 17 @ 8:35 pm
Compared to what’s been reported on what Wisconsin is paying for the Foxconn jobs, the IL plan seems downright frugal.

Comment by Stuntman Bob's Brother Monday, Oct 23, 17 @ 9:26 pm