Thursday 26 April 2018

Newark to make $7bn pitch to land Amazon's HQ2

Newark has struggled for decades to stage an economic revival
Newark has struggled for decades to stage an economic revival

David M. Levitt

New Jersey Governor Chris Christie is seeking to deploy $7bn in potential tax credits to lure Amazon.com Inc.'s planned second headquarters to Newark, which has been struggling to stage a broad economic revival since it was devastated by riots in 1967.

The proposal would offset state and city taxes, including an incentive through New Jersey's Economic Development Authority that could reach $5bn over 10 years, the governor's office said last Monday in a statement. The remainder of the tax breaks would come from a $1bn city property tax abatement and a wage tax waiver of $1bn for employees.

A reputation for crime and poverty has kept the state's largest city - which is located just 16km west of Manhattan - mostly on the sidelines of the urban revival that's transformed swathes of blight into trendy neighbourhoods across the US. In recent years, though, Prudential Financial Inc. has built a new office tower in Newark and has backed several real estate projects there.

Seattle-based Amazon last month solicited proposals for the second headquarters, a project that is expected to cost more than $5bn and create 50,000 jobs during the next 15 to 17 years.

The proposed building will be called Amazon HQ2 and is expected to be equal in size to Amazon's existing Seattle campus, which stretches across more than 8 million sq ft and employs about 40,000 people.

Newark is facing competition from big cities such as Boston and Chicago and smaller markets including Tulsa, Oklahoma, and Memphis, Tennessee for the premises.

The company has set an October 19 deadline for proposals and plans to make a decision on location next year.

Closer to home, Amazon is searching for an additional 7,432 sq m of office space in Dublin that could cater for as many as 800 employees.

With assistance from Spencer Soper

(Bloomberg)

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business