ALBANY – The feverish anticipation over Amazon’s search for a new second headquarters that could bring as many as 50,000 new jobs has spread across North America, including New York State.
That has left the Cuomo administration in a peculiar place: unable to name a favorite candidate.
Will it be New York City? Or could it be Buffalo? What about Westchester County or Long Island? Rochester wants to be in the running, and there's the possibility of a combined bid by Rockland and Orange counties.
Amazon has set up the ground rules, and certainly any state's leadership with multiple communities looking to be considered by the Oct. 19 deadline is in the same position as the Cuomo administration.
Not that the Cuomo administration isn’t heavily involved in the local efforts, including those in Buffalo. It's offering all sorts of technical and research assistance to economic development officials and site selection planners. It also quietly hired a commercial real estate firm – Newmark Knight Frank – to help. (The state says a contract hasn't been signed with the firm yet, so it would not provide cost estimates for retaining the real estate giant.)
Most importantly, New York – like every other state and Canadian province making a bid – wants to ensure that communities in the running have in their arsenals one of the key things Amazon wants: taxpayer-supported financial incentives. That could include anything from tax breaks to cash grants.
“We’re certainly going to make state incentives, such as tax credits, available to support any of the proposals submitted from New York State,’’ said an official with Empire State Development, Albany’s lead economic development agency. The official spoke only on condition that his name is not used.
“We will have state resources on the table regardless of where (the bid) is from,’’ the official added.
Precisely how that financial offer will be structured is still being discussed within the administration as it deals with a tightly compressed process that began Sept. 7 and concludes in just over three weeks.
Should a New York community make it onto Amazon's short list, observers say the Cuomo administration will throw all its weight into assisting the bid. But for now, there are no favorites, the state says.
“We’re certainly not going to favor one submission or area over another. Our biggest concern is trying to attract the project to New York State,’’ said the Cuomo economic development official.
Indeed, for the governor, choosing sides – say Suffolk County over Buffalo or New York City over Westchester County – would be a politically damaging exercise for the Democrat who faces a re-election campaign next year.
A race by localities
To be considered for its $5 billion investment, Amazon has a long list of conditions.
For starters, it wants a metropolitan area with at least 1 million people. It wants to be in an area with a “stable” economy that is “business friendly,” and it wants an initial building of 500,000 square feet on a location that could eventually accommodate 8 million square feet of office space. It wants access to major highways, mass transit on the site and to be near an international airport.
It wants money, too, saying in its very public request for proposals that financial incentives by state and local governments “will be significant factors in the decision.’’
That likely means billions.
Officials from some of New York's communities hoping to be invited to Amazon's dance talked about their plans, others did not.
Thomas A. Kucharski, president of Invest Buffalo Niagara, a private group coordinating the bid for the Buffalo region, said his group has signed a nondisclosure agreement with Amazon – at the company’s request. He has been told that Rochester and New York City, as well as Cuomo’s Empire State Development, have signed the same secrecy agreement with Amazon. (A spokesman for New York City Mayor Bill de Blasio did not respond to an email, and Robert Duffy, Cuomo’s former lieutenant governor who is among those working on the Rochester submission in his role as head of the Greater Rochester Chamber of Commerce, declined to comment.)
With the nondisclosure deal in force, Kucharski declined to discuss specifics of a bidding package still coming together, except to say that possible sites in the Buffalo area are still going through an initial evaluation before being turned over to site location experts brought on board by the state and the local effort. It’s too soon, he added, to know how many sites might be offered in the Buffalo region's package.
“It’s challenging because it’s a tight time frame,’’ Kucharski said.
Kucharski praised Cuomo and his economic team for sending Amazon a strong signal that New York State wants the project.
Westchester County Executive Rob Astorino, a Republican who ran against Cuomo in 2014, said Westchester this week will be unveiling its Amazon proposal.
Like other plans in the state, Westchester will then submit its proposal to Cuomo’s economic development office to “put a bow on it” and deliver all of the proposals to Amazon. Astorino called it a “practical path” to have the state submit the localities’ plans, given how many submissions are expected across North America.
Westchester County is well positioned for Amazon, Astorino said.
“Obviously, New York State has negatives in regard to high taxes and business climate, but certainly in Westchester we have very good positives that Amazon would be looking at,’’ said Astorino.
In Long Island’s Suffolk County, representatives of County Executive Steve Bellone, a Democrat, met with Cuomo’s economic development office last week for an introductory session on the Amazon bidding. Next week, the county expects to send its initial plan to the state.
“Suffolk County is working closely with NYS Empire State Development, (which) is coordinating submissions on behalf of the state,’’ said Jason Elan, a former Cuomo administration staffer who is now a spokesman for Bellone.
Nassau County’s economic development agency did not respond for comment.
Incentives to shape Amazon's decision
Some states, such as Massachusetts – with Boston on many analysts' short lists for possible Amazon finalists -- can focus all of its state and local attention on advancing just one bid. New York won’t be in that club.
But Brian McMahon, executive director of the New York Economic Development Council, which represents job creation agencies throughout the state, dismisses speculation that New York's chances are hurt by its multiple contenders.
“I think it’s an advantage. We have options that Amazon can choose from, if you will, that have very different strengths, assets and attributes,’’ McMahon said. He said the state is well-accustomed to working with companies that are considering more than one New York location for their business.
As for incentives, McMahon said such components are always among the last major items to be negotiated with corporations looking to re-locate or expand operations. Amazon has set a host of hurdles for localities to surmount before then, including availability of a skilled workforce and quality-of-life features.
“Once a company makes a decision where it is going to go, then the state, as well as the community, will start to fashion an incentive package,’’ McMahon said.
In this case, though, Amazon has taken an unusually public approach – at least in its initial “ask” phase of the proposal process. It wants specific information about financial incentives governments will offer, as well as details about free land and other financial perks. It also wants to know about “claw backs’’ – when companies must return financial incentives if job creation promises don’t pan out.
How many bids will Amazon get? Based on some of the basic Amazon requirements, such as population levels, one could expect about 50 communities to submit bids, although some estimates have exceeded 400.
“While it’s a deal of a magnitude that I don’t know if anyone has ever seen before, you also do have to kind of work in a professional manner, like it was really any other deal, and put together all of the available options that would satisfy what the client is looking for,’’ Kucharski said.
Having said that, Kucharski added, “We’re working night and day.’’