Amazon Headquarters Bid Ramps Up in Illinois

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Michael J. Bologna

Illinois lawmakers are ramping up their bid for the massive Amazon HQ2 project, unveiling a high-level committee to steer the state’s offer and discussing options for a special legislative session to craft the incentives package.

Gov. Bruce Rauner (R) and Chicago Mayor Rahm Emanuel (D) Sept. 27 jointly announced the formation of a committee jammed with political heavyweights and corporate chieftains to sell the Chicago region as the best choice for Amazon.com Inc.’s proposed second world headquarters. Amazon has said it expects to invest $5 billion on a new corporate campus and generate as many as 50,000 jobs.

Rauner and Emanuel will serve as honorary co-chairs of the committee, but the committee will be directed by Oscar Munoz, CEO of United Airlines; Penny Pritzker, founder and chair of PSP Capital and former Secretary of Commerce in the Obama Administration; Jim Reynolds, chairman and CEO of Loop Capital; and Miles White, chairman and CEO of Abbott Laboratories.

“As we prepare the bid to bring Amazon home to Chicago, this committee will highlight the region’s competitiveness and strength as a national and global leader in business, education, research, culture, and quality of life,” Emanuel said in a statement.

Rauner noted the committee is composed of 600 leaders from business, finance, technology, government, and education. The governor said their participation, “sends a great message about the value of doing business in Illinois.”

Site Designation

The announcement came as the city and the state closed out a site designation process for possible HQ2 locations. Both the city of Chicago and the Illinois Department of Commerce and Economic Opportunity accepted nominations through Sept. 27. City and state officials haven’t revealed the results of the nomination process.

Chicago opened its nomination process on Sept. 20. The city specified that all nominated sites must meet Amazon’s original requirements, which include 500,000 square feet of initial space and expansion capacity for 8 million square feet of space over 10 years. Chicago also specified that sites should provide direct access to mass transit systems. In addition, sites must be located within 45 minutes of O’Hare International Airport.

Leaders of the Illinois General Assembly hinted they may be called on shortly to draft legislation codifying the essential components of any incentive package provided to Amazon.

Steve Brown, a spokesman for House Speaker Michael Madigan (D), acknowledged a special session of the Legislature may be necessary but added nothing has been scheduled. Brown declined to speculate on the kinds of tax credits, exemptions, and abatements that might be included in Illinois’ proposal.

“The Speaker supports the effort to offer the best possible package for Amazon to consider,” Brown told Bloomberg BNA. “But to comment on what the incentives might be before the incentives are in place, well, I’m not going to engage in that.”

Lessons From Foxconn

House Minority Leader Jim Durkin (R) has called for a thoughtful incentives package and pointed to the need for a special session before Oct. 19. Durkin warned against the kind of deal-making witnessed when Wisconsin landed a Foxconn Technology Group project earlier this year.

Two weeks ago, Wisconsin Gov. Scott Walker (R) signed legislation granting $3 billion in tax credits, exemptions, and subsidies to Foxconn for its plan to construct a 20 million-square-foot campus in southeastern Wisconsin. Foxconn plans to produce liquid crystal display panels for televisions and electronic devices.

“I don’t think we need to give away the store like Wisconsin just did with the billions of dollars it did for Foxconn, but we need to be competitive,” Durkin told business leaders in a speech Sept. 19.

Durkin added that “anytime you start talking about incentives, it brings out some of the worst in people down in Springfield. But we need to make a pitch, we need to be responsible, we can’t oversell what we can deliver.”

Durkin has objected to two specific features of the Wisconsin law. Wisconsin enacted special rules that streamline the environmental permitting process and relax environmental standards. The state also provided Foxconn with special legal rights if it becomes the target of litigation during the development process. The law specifies that circuit court rulings affecting Foxconn could be stayed and appeals could proceed directly to the Wisconsin Supreme Court.

Several states and cities are raising their hands in the Amazon HQ2 race, including: Delaware; New Jersey (see related story, this issue); Rhode Island; Austin, Texas; Detroit; Hartford, Conn.; Memphis, Tennessee; Philadelphia; St. Louis; and Tulsa, Okla.

To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of the joint announcement is at http://src.bna.com/s0d.

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