I just read an article in Business Insider about some recent fallout from the Amazon HQ2 bidding wars, (Amazon HQ2 candidates are going to great lengths to keep their plans secret) and it highlighted common concerns that we have learned about in the past few weeks working with our EDO clients. One of the issues EDOs face is whether or not to be transparent with their incentive packages. The lack of transparency has recently become an issue with the very public bidding wards for Amazon's HQ2. According to Business Insider, several advocacy groups are suing the cities of Newark, Chicago, Pittsburgh, and Philadelphia with the hopes of forcing them to release information about their bids on the grounds that the award will have tax implications on the public living in those areas.
It makes sense to keep pitches and bids private because there will always be someone out there willing to use your pitch as the basis to make their own. People work for months on these large bids and the regional stakes are high. When Houston was taken out of the running for Amazon people lost jobs over it. The life of an economic development director is a highly stressful one. They are the gatekeepers of growth. They are responsible for bringing in (or not) business growth but also for any tax issues that result from it--not an easy task. Bids and packages for a multi-billion dollar powerhouse like Amazon are unprecedented. How do you bid on something that is a once-in-a-lifetime opportunity? What precedence do you use?
EDOs have a huge amount of information to compile, pour through, and segregate in order to make an educated guess as to not only what the business is looking for but what their competitors will bid. The Amazon bidding war has really lifted the veil on what EDOs go through and has helped to highlight many important decisions they make. Whether bids are public or private will be a question more and more EDOs ask themselves in the future. Transparency comes at a cost and some states like Maryland were willing to pay it by publishing their $8.5 billion tax credit and infrastructure bid.
Again, we are all waiting on the outcome of the Amazon HQ2 search because it will have huge repercussions for EDOs and site selection in the future. As for us, our current efforts to create a better method for site selection continue and we will be watching closely to see how it all unfolds.