Cleveland’s Failed Proposal For Amazon’s HQ2 Offered At Least $120 Million in Giveaways

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Cleveland.com and WKYC got their hands on documents revealing a portion of Cleveland, Ohio’s failed pitch to Amazon to land the company’s planned second headquarters. The records reveal the city was prepared to throw some substantial incentives at Amazon if it decided to call Cleveland its new home.

The 27-page document deals primarily with logistics and transportation surrounding the proposed Amazon building and reveals the city was prepared to offer more than $120 million in discounted fares for employees of the ecommerce giant to use the city’s public transit system.

Had the plan been picked by Amazon, the company would have taken hold in office space located in Post Office Plaza and Terminal Tower—a historic, 52-story building located in the heart of downtown Cleveland near the shore of Lake Erie.

The city also floated a 25 percent fare discount that would have been extended to Amazon employees to encourage them to use the Greater Cleveland Regional Transit Authority (RTA) bus and rail lines. The incentive was estimated to be worth about $121 million over 15 years.

The city justified the handout as part of a plan to “accelerate” ongoing efforts to triple the capacity of the public transit services. While Cleveland’s public transit system is considered to be pretty solid, it has seen dwindling ridership in recent years. An influx of Amazon employees—as many as 50,000 of them, according to the company—could help boost rider numbers, though having them pay the fares would certainly help generate some revenue for the city.

The documents, which the city has refused to release in full, were provided to Cleveland.com and WKYC by the Northeast Ohio Areawide Coordinating Agency (NOACA), a public transportation planning agency that helped crunch numbers for the city’s bid. NOACA only handed over its portion of the plan after declining to appeal a recent ruling from an Ohio Court of Claims special master, who told the court it should order the release of the files.

NOACA’s cache of documents likely only represent a small portion of the overall plan, which is believed to include other public tax incentives. Other files relating to the proposal are still being kept under wraps despite a number of public records lawsuits demanding their full release.

Most of the cities that have thrown their hat in the ring to try to land Amazon’s HQ2 have tried to keep the details of the proposals quiet, likely because the offers probably look an awful lot like massive giveaways to a company that recorded $51 billion in revenue during the first quarter of 2018. When the details do leak out, they aren’t pretty.

The head of transportation for Maryland said earlier this year the state was ready to “provide whatever is necessary to Amazon,” writing the company “a blank check.” Maryland Governor Larry Hogan reportedly promised Amazon about $3 billion in grants and tax breaks and $2 billion in transportation improvements if the company to set up shop in Montgomery County. A number of other cities are also offering billions of dollars in incentives to lure Amazon—an idea so bad that even a Koch brothers-backed activist group has advised against it.

Amazon is more than happy to take the freebies when they are offered. A 2016 report by the Institute for Local Self-Reliance found that the company received more than $600 million in local government subsidies between 2005 and 2014 as it set up warehouses across the country and another $150 million for data centers.

[Cleveland.com, WKYC]



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