Days before the end of this year’s legislative session, a bipartisan group of lawmakers in the Maryland General Assembly passed an $8.5 billion tax incentive and infrastructure package aimed at luring Amazon’s new headquarters to Montgomery County.
The package amounts to $6.5 billion in tax incentives and credits and an additional $2 billion in infrastructure and transportation upgrades, according to The Baltimore Sun, and would be the largest public incentive offering of the 20 locations still vying for Amazon’s second headquarters, dubbed HQ2.
Gov. Larry Hogan introduced the legislation in January — called the Promoting ext-Raordinary Innovation in Maryland’s Economy, or PRIME Act, after the online retail giant’s paid subscription service — which would provide the Fortune 100 company building HQ2 tax incentives, including a $10 million-a-year grant from the state’s Sunny Day fund and a tax credit that amounts to about six percent of each job’s salary if it agrees to provide at least 40,000 jobs and pay an average of $100,000 per year to employees, according to the Baltimore Sun.
“HQ2 is the single greatest economic development opportunity in a generation, and we’re committing all of the resources we have to bring it home to Maryland,” Hogan said in a January news release.
Amazon is expected to invest $5 billion in the construction of HQ2, which would add an estimated $17 billion per year to the state’s economy, according to a study completed by Sage Policy Group, an economic consulting firm.
“We are a prime contender,” said Montgomery County Councilwoman Nancy Floreen, who said the county offers high-quality education systems and transportation solutions to suit Amazon’s needs.
Montgomery County is one of three sites in the D.C. metro area — joining Washington, D.C., and Northern Virginia — to make Amazon’s shortlist of 20 potential future locations of 238 initial proposals for HQ2 submitted last fall.
“Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity,” Holly Sullivan, an Amazon public policy executive said in a January statement.
Other bids from Prince George’s, Howard and Charles Counties, as well as Baltimore City, did not make the cut.
While he was disappointed that Prince George’s County is no longer being considered for HQ2, College Park Mayor Patrick Wojahn said Amazon’s new headquarters would benefit College Park and the D.C. metro area economies if the company ended up coming to Montgomery County.
“I do think Amazon would be great for the region,” Wojahn said. “I hope we get it.”
The University of Maryland Student Government Association wrote a letter in support of HQ2 coming to Montgomery County in February, before the legislation was proposed, citing educational resources, proximity to the university and the construction of the Purple Line as reasons the company would benefit from choosing this location, said Mihir Khetarpal, the SGA’s governmental affairs director.
“Amazon coming to Montgomery County is a good thing,” said Khetarpal, a senior economics and government and politics major and Montgomery County native, adding that the incentive package helps make the region more competitive with Northern Virginia, which can offer things that Montgomery County can’t, like proximity to a major airport.
Opponents of the bill include Montgomery County resident Becky Rosansky, a senior public policy major and the SGA public policy representative, who said she understands the financial benefits of a company like Amazon coming to the area, but added that it was “inevitable” that the increase in rent and property costs could force out a lot of the county’s current residents.
A recent study by the Brookings Institution identified the D.C. metro area’s housing market as “high-priced” and “hard to build” in, which may make developing new housing difficult and expensive.
“We chose to move there because it is relatively affordable compared to other places surrounding D.C.,” Rosansky said. “It would really be a shame to see the cost of rent skyrocket because of the new Amazon headquarters.”
Despite the promise of 50,000 new jobs, Rosansky predicts that Amazon will hire transplants instead of locals, a move Khetarpal said was important for the company to avoid.
“There are a ton of people that go to the University of Maryland or went to Montgomery County high schools [who] end up going to Silicon Valley, and even if they stay locally, they go to Northern Virginia,” Khetarpal said. “This is going to take the people who were born and raised and grew up in Maryland and keep them in Maryland.”