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How far will Georgia go to snare Amazon?


Georgia, meanwhile, continues to play its hand close to the ... executive managing director in Atlanta with the business incentive practice at real estate services firm Cushman & Wakefield. Some would reduce a company's state income tax liability, others ...


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Posted 3:05 p.mTuesday Leave this field blankYour e-mail address:*Your friends e-mail addresses (comma separated):*Subject:*Message:*A friend wanted you to see this item from WRAL.com: http://wr.al/1Af8mGet a new codeAre you human?*You must enter the characters with black color that stand out from the other charactersfunction init_41ffdaf84995217993b4902243ff0a15(){if(typeof jQuery=="undefined"||typeof jQuery.fn.Zebra_Form=="undefined"){setTimeout("init_41ffdaf84995217993b4902243ff0a15()",100);return}else{$(document).ready(function(){$("#share_email_form").Zebra_Form({clientside_disabled:false,close_tips:true,on_ready:false,scroll_to_error:true,tips_position:'left',validate_on_the_fly:false,validate_all:false,validation_rules:{"from_email":{"required":["Your e-mail address is required"],"email":["Your e-mail address seems to be invalid"]},"to_email":{"required":["Recipient's e-mail address is required"],"emails":["Recipient's e-mail address seems to be invalid"]},"subject":{"required":["Subject is required"]},"message":{"required":["Message is required"]},"captcha_code":{"required":["Enter the characters from the image above!"]}}})})}}init_41ffdaf84995217993b4902243ff0a15() By JScott Trubey and Greg Bluestein, Cox NewspapersATLANTA -- Chicago opened with $2 billionPhiladelphia countered with $3 billionMaryland's governor upped the ante to $5 billion. New Jersey officials pushed their chips to the middle of the table with an audacious $7 billion wager for Amazon to locate its second headquarters in Newark. Georgia, meanwhile, continues to play its hand close to the vest. The value of Georgia's opening bid -- and how high the Peach State might go -- to land Amazon's 50,000 promised jobs in metro Atlanta, remains a mystery. Georgia's bid -- described by multiple observers as "unprecedented" -- is believed to top $1 billion in taxpayer-funded incentives, including grants, worker training, tax breaks, transportation improvements and other perks. The details remain shrouded in secrecy under an exemption in state sunshine laws for active economic development projects. But Amazon's choice to pit 20 communities against each other -- including some within the Washington, D.C., and New York metro areas -- raises the potential for what critics see as a wasteful bidding war. "The risk of overspending is extreme," said Greg LeRoy, executive director of the incentives watchdog Good Jobs First. The Atlanta Journal-Constitution spoke to site selection consultants, incentives experts, public officials, academics and others familiar with Georgia's recruitment apparatusThe newspaper also reviewed past incentives packages to assess what state and local leaders might offer Amazon. Georgia has a vast array of incentives in its arsenal, including "deal-closing funds," tax credits for new jobs, sales tax exemptions, local property tax breaks and free worker training. Some of the state's jobs tax credits are so lucrative they could potentially turn Amazon's income tax rate in Georgia negative -- essentially creating a revenue stream for Amazon by rebating what the company withholds in state income taxes from its workers' paychecks. The state can even offer free land, in some cases, while utilities such as Georgia Power might pitch in free infrastructure to connect a campus or other Amazon assets to its power grid. The wild card -- and what can't be known -- are some of the unprecedented steps Georgia might take to win the project. GovNathan Deal's call for a special legislative session to hash out more pot-sweeteners if Georgia is a top finalist will bring more of Georgia's playbook to the forefrontAnd selling lawmakers in Bainbridge or Blue Ridge on the 10-figure incentives -- in an election year, no less -- could be a big lift. Few lawmakers are willing to say Amazon will be worth whatever it takesThat's largely because there's little detail on exactly what it would take. "Critics of massive incentives caution about the race to the bottomIt's hard to tell whether proposed incentives are worth it if they aren't shared with the public," said state RepScott Holcomb, a Democrat who represents a north Atlanta district that would likely directly benefit from Amazon. "I understand the advantage of not disclosing offers to competitors, but there needs to be a system to evaluate whether incentives are working and are worth it," he added"After all, we are talking about public money." Not every city plans to play the incentives gameBoston, for instance, signaled it won't get into a bidding war it can't afford and Toronto's bid is leveraged on its workforce and quality of life. But the specter of big-ticket offers for Amazon has already jolted the governor's raceState SenMichael Williams, trying to outflank his GOP rivals to the right, has come out early in opposing hefty tax breaks for a Fortune 10 company controlled by Jeff Bezos, one of the world's richest men. "I'm all for Amazon, as long as it's in the best interest for all of Georgians and not just the select few who would benefit for campaign contributions and the like," said Williams"Every number I've seen -- from Newark to Maryland -- the cost is extremely highWe're never going to get that payback." Clues to the bid Critics say Amazon's choice to go public with what it calls HQ2, and pit so many communities against one another, heightens the risk of communities overspending for a project Amazon might have brought to the chosen city anyway. Amazon also earned a reputation for squeezing pricey concessions from state and local governmentsAccording to Good Jobs First, Amazon has received more than $1.1 billion in incentives and subsidies since 2000 for initiatives including data centers, warehouses and film projects. Little is known about Georgia's offer, however, people familiar with the matter say the document goes far beyond possible incentivesIt includes information about dozens of sites, the region's quality of life and emphasizes Georgia's existing tech and corporate workforceIt also touts metro Atlanta's pipeline of tech talent -- and ways that pipeline might be expanded. A spokeswoman for the state Department of Economic Development declined to comment about Georgia's bidOther state officials are tightlipped, citing confidentiality agreements. An examination of the incentives Georgia already has on the books and what Amazon might qualify for offers some clues to the scale of the state's bid. When it comes to incentives, site selection experts say, companies want to mitigate costsTheir location analyses scrutinize regions' business climate, operating costs, taxes, costs to build facilities, workforce needs and other factors. Peter Stathopoulos, a partner with Bennett Thrasher LLP in Atlanta who leads the state and local tax practice, said he thinks the tax breaks and other incentives already written into law would provide $1 billion to $2 billion for Amazon. That's before special offers and "discretionary" incentives from Georgia's "deal-closing funds" known as REBA and EDGE. Deal's budget proposal increases funding for REBA and OneGeorgia grants to $50 million in this year's spending planThose pots of money are sometimes used as deal-closing funds, but it's unclear whether they would be suitable for AmazonAbout $10 million of the sum is already set aside for beach nourishment. Georgia is generally considered a low tax stateThe state's income tax rate is 6 percent, but that's deceiving because the state affords business with a more generous way than many others of determining what qualifies as taxable incomeGeorgia only counts as taxable income sales that occur in the state. "The effective tax rate is lower on its face than the 6 percent suggests," said Stathopoulos. The state also has a menu of tax credits for new jobs, research and development and other investments for which a project such as Amazon might qualify, said Amy Gerber, executive managing director in Atlanta with the business incentive practice at real estate services firm Cushman & Wakefield. Some would reduce a company's state income tax liability, others have the potential of wiping it out completely and or even allowing a firm that meets certain thresholds to claim the credits against the payroll taxes it would pay to the state. Some of the most valuable are tax credits for high-paying jobs. The state's Mega Project Tax Credits provide a credit of up to $5,250 per qualifying job, per year for five yearsThat credit is capped at 4,500 employeesThe Quality Jobs Tax Credit can grow to $5,000 per qualifying high-wage job, per year for five years. Local communities, meanwhile, can waive fees for permitting and construction and also offer tax breaks on real property, such as buildings, as well as furniture and equipment inside buildings, Gerber said. But states also tend to know what their competitors have in their arsenals. "It would not be uncommon for any state to propose new legislation for a project of this nature," Gerber said"This happens all the time." Joseph Parilla, a fellow at Brookings Institution's Metropolitan Policy Program, said the most effective incentives, and the ones that are the most fair, are the ones that benefit the broader community. Major employers want quality schools, good roads, transit and dynamic quality of lifeThey also need deep labor pools. But the risk for lawmakers is giving away so much it ends up "siphoning off resources that could be given to education, housing or transportation -- the things that might have attracted Amazon there in the first place," said Parilla. States such as Georgia would be best served by offering Amazon transportation improvements and expansions to its engineering and computer science programs at Georgia Tech and other research universities to sustain the talent pipeline, he said. The state also can offer new grade school and high school programs to make computer science a larger presence for students. "Amazon will have to fill so many jobs so quickly, they'll have to dive deep into the labor pool," Parilla said"That makes a lot of sense." 'Every ingredient' If the past is any guide, Georgia will offer Amazon some custom perks. When then-GovSonny Perdue landed a Kia Motors plant in West Point, the company won a bounty of free land, tax breaks, worker training and other inducements totaling about $400 million, a 2009 AJC analysis found. In 2012, when Baxter International picked a site near Social Circle for a biomedical manufacturing plant (the plant is now part of pharmaceutical giant Shire), the state offered a package that could grow to more than $210 million for the promise of 1,500 jobs. Both projects included multimillion dollar state-of-the-art worker training facilities. Part of the $27 million in state and local incentives for the Mercedes-Benz USA headquarters, which Sandy Springs won from New Jersey, included 50 in-state tuition waivers to state universities. Lawmakers even passed a special incentive to keep employees at the headquarters from paying taxes on cars they lease. But judging by past state negotiations -- and details leaking out of rival bidders -- Georgia seems likely to consider a range of other innovative ideas that range from the routine to the extraordinary. During his two terms, Deal proposed initiatives to study the state's workforce needs, and those studies led to new programs at the state's network of technical colleges and universities, including the state's new film academy and film-related degree programs. Little touches could also help Georgia seal the deal, from help getting the children of executives into choosy private schools to an instant seat at the table for some of the city's biggest decisionsAccess to the governor, the mayor and other top politicians could be part and parcel of the deal. And to avoid recurring political battles, lawmakers could vote to bake the tax breaks into Georgia code for years -- even decadesSome of Atlanta's other rivals are offering Amazon certain tax breaks in perpetuity. Georgia's Quick Start program, an offshoot of the state tech college system that offers free training and recruitment for new companies, has long been a prime t

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