Cleveland Joins Amazon HQ2 Bidders Refusing to Disclose Incentives

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 Alex Ebert

Cleveland is refusing to disclose its losing tax incentive package rejected in the contest for Amazon.com Inc.’s massive $5 billion second headquarters, despite at least two public records lawsuits demanding the details.

An Ohio Court of Claims special master last week recommended that the Northeast Ohio Areawide Coordinating Agency disclose its bid and pay a suing journalist’s attorney fees. The city of Cleveland is defendant in a similar public records suit by a local ABC news affiliate. Despite all this, the city told Bloomberg Tax May 4 that it won’t disclose the records it sent Amazon in the competition to net the company’s projected 50,000 high-paying jobs.

The refusal places Cleveland among several cities, including Chicago, claiming secrecy in Amazon’s unusually public bidding process. Cleveland is the only holdout among Ohio cities, which have all provided their documents to local news outlets under public information requests. Even Columbus—a top-20 finalist for HQ2—disclosed that it has offered more than $2.6 billion to woo the online retail giant.

“The City of Cleveland is not a party to the lawsuit involving the release of records compiled by NOACA in support of the Amazon bid,” city of Cleveland Law Director Barbara Langhenry said in an April 30 statement. “The issue of release of the Amazon bid by the City is the subject of separate litigation pending before the Ohio Court of Claims. The City will not release its records at this time.”

Details Not ‘Trade Secrets’

The nonprecedential finding by the special master disagreed with NOACA’s contention that a “trade secrets” exception protected its Amazon bid from public record requests.

The development authority argued that modeling data and transit incentives in its 28-page bid made the entire document exempt under the Ohio Uniform Trade Secrets Act. But Special Master Jeffery Clark, who reviewed the bid, said the data was widely available on the group’s website and wouldn’t be detrimental to the group in future bids because the data and incentives would be significantly different.

“NOACA also states that disclosing the particular attributes featured in the bid would allow competing cities to ‘respond very specifically and proactively to the attributes NOACA has chosen to illustrate,’” Clark wrote in the recommendation. “However, the ‘benefit’ of concealing the region’s relevant attributes is not only contrary to NOACA’s mission, but is belied by its exhaustive publication of the same information online. There is no evidence that a competitor who wishes to distinguish its attributes from those of Cleveland cannot obtain a wealth of specific data and declared attributions form NOACA’s published material and elsewhere online.”

A similar trade secret argument was levied by Philadelphia, an Amazon HQ2 finalist. There, the state’s Office of Open Records has ordered the city to disclose the details of its proposal within 30 days. Journalists have also sued the city of Louisville, Ky., for disclosure of its rejected bid.

NOACA didn’t immediately return a request for comment.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio, at aebert@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

Copyright © 2018 Tax Management Inc. All Rights Reserved.

Request Daily Tax Report: State