By Michael (Cade) Larkin, National News Writer
The battle is on over which state will be the home of Amazon’s second corporate headquarters. Newark, the largest city in New Jersey, has made an effort by offering $7 billion in state and city tax incentives in order to sway Amazon towards the “Gateway City”.
The whole nation is at war and municipal leaders across the country are sending in their proposals to seize this opportunity. Amazon, being the huge corporate giant that it is, could potentially create over 50,000 new jobs for the state. Newark is looking to put those jobs to good use and finally produce an economic revival after decades of stagnation following the riots of 1967.
New Jersey Governor Chris Christie, along with Newark Mayor Ras Baraka and Senator Cory Booker are all taking strides to show how Newark may be best option for Amazon to choose. They explain that Newark has made huge progress as a city, recognizing that its transportation options, educational institutions, technology infrastructure and businesses are all providing economic stability.
The headquarters itself would cost upwards of $5 billion for Amazon, and Newark is looking to match that number with an added bonus. The tax incentives of $5 billion would be given to Amazon over the course of 10 years as well as the requirement of 50,000 created jobs. Another $1 billion would be given as part of a property tax abatement, while a further $1 billion would be generated from having the local wage tax waived from the new Amazon employees.
While Newark makes a hard bargain, New York is also promoting the five boroughs and how a headquarters there would be very beneficial to Amazon. Their argument is the huge concentration of college graduates and high-earning companies that would allow Amazon to indulge in “unparalleled diversity of industry talent and institutional resources” as stated by New York City Mayor Bill de Blasio and Governor Andrew Cuomo in a letter to Amazon.
While the new headquarters does bring along economic gains, there are those who feel this potential deal is unnecessary. Certain advocacy groups wrote letters to de Blasio and Cuomo believing Amazon should simply “be a better corporate citizen” and that the company should “not receive financial incentives simply for doing business here.” They believe Amazon is getting a lot more than what it would give back to the city and even with those new jobs, they would not be worthwhile.
The tax breaks are also worth mentioning for both the city of Newark and New York. While the state gains the new headquarters, it loses out on other investments that could also help the city such as education. Education is a driver for long-term economic growth and is important for any city. Take a potential chunk away from education investment and it may create a hole in the economy that could have easily been avoided.
Economists, however, believe that tax incentives are still a small part of a bigger overall picture. Quality of life, transportation, and the employment base are major players when it comes to improving a city’s well-being. In the case of Newark, the city believes Amazon would be a great company to host, with the potential to increase the prosperity and well-being of city residents.
A version of this article appeared in the Tuesday, October 24th print edition.
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