News alert: Louisiana offered Amazon $6.56B for HQ2
Louisiana offered Amazon $6.56 billion in a long-shot bid to land the tech giant’s HQ2, a 50,000-job project that set off a bidding war among dozens of cities.
Louisiana Economic Development officials laid out five potential sites in the New Orleans area for HQ2: Churchill Technology & Business Park in Jefferson Parish; Brechtel Park, Innovation District and University of New Orleans Campus in Orleans Parish; and Lakeshore Estates in St. Tammany Parish. LED said it would have offered more site options had New Orleans been chosen.
In the end, the money that LED put up for the project was not enough, as New Orleans failed to make the cut of Amazon’s 20 finalists. Gov. John Bel Edwards and several local officials in the New Orleans area wrote letters as part of the proposal, highlighting the state’s business climate, workforce development programs, and low taxes and labor costs.
“The letter of intent, combined with Louisiana’s business-friendly tax structure and low-cost environment, ensures that (Amazon) will minimize its ongoing costs to operate profitably,” the proposal said. “Beyond the state’s low state/local tax burden, Louisiana is recognized for some of the lowest wage rates and real estate costs in the nation.”
The bulk of the package—around $5 billion—came from the state’s Digital Interactive Media and Software Development Incentive, which offers companies refundable tax credits for production and payroll expenses. The total incentive package was over a 20-year period. LED officials noted the incentives were performance-based, meaning Amazon would have had to produce the jobs and capital investments it promised.
“We made a powerful case for Louisiana, but the reality is fewer than one in 10 proposers made the short list, with finalist cities tending to be the nation’s most populous urban areas,” LED Secretary Don Pierson says in a statement. “Only one city will win HQ2, but Amazon likely will announce many other economic development projects over time, and Louisiana will be recognized as a stronger candidate for fulfillment centers and other facilities because of the HQ2 effort we mounted.”
The proposal was contained in a more than 100-page proposal named “Project Pearl,” which Daily Report reviewed Tuesday in response to a public records request. LED refused to provide an electronic version of the proposal. The $6.56 billion in incentives did not include tax breaks and other incentives that local governments in Orleans, Jefferson and St. Tammany parishes offered. Those included tax increment financing districts, PILOT programs and a wide range of infrastructure improvements, among other things.
Baton Rouge Area Chamber President and CEO Adam Knapp says the HQ2 project is the largest he’s seen, in terms of jobs and incentive numbers. The Baton Rouge area was mentioned several times in the report as it related to workforce, but no sites in the Capital Region were included.
“As everybody surmised, it was a big shot at a prize that was enormous,” Knapp says. “It was a long shot.”