The Sunshine Economy Loses Race For Amazon's HQ2
South Florida may have offered Amazon more than $500 million in job incentives to bring its HQ2 project to the region.
We just don't know for sure.
While other areas in Amazon's shortlist of the top 20 communities competing for the massive economic development project have released details of their bid, South Florida's three countywide economic development agencies haven't.
But based upon the formula for one state job-creation incentive program, if certain pay and location thresholds were met, Amazon could have qualified for more than $500 million in tax refunds. That's based on the state's Qualified Target Industry Tax Refund and Amazon's stated plans to add up to 50,000 jobs over 15 years for its second headquarters.
"I will defer until we complete our analysis and conversations on offering a specific number, but I'd say your logic is sound with respect to the QTI and the mechanics of how it works when considering a project," says Beacon Council CEO Mike Finney. The Beacon Council is the economic development agency in Miami-Dade County.
How One Florida Job Incentive Adds Up
A second state incentive program known as the Capital Investment Tax Credit may have totaled hundreds of millions of dollars in potential tax breaks for HQ2. This tax credit requires a company to create at least 100 jobs and make $25 million in capital investments. Both requirements would have been met easily by Amazon.
"We looked at every incentive that was available at the state and local level because we knew that our ability to get a big special incentive ... wasn't in the cards here," Finney said.
When Amazon made its choices public, it highlighted the local job markets in New York City and Arlingon, Va.
"These two locations will allow us to attract world-class talent," Amazon CEO Jeff Bezos said in a news release.
According to analysis from The Beacon Council, South Florida has 100,000 technology workers in the region. That compares with about 400,000 in the Washington, D.C., metro area and 550,000 in the New York/New Jersey job market.
"We've got the reality of the numbers we've got right now," says Bob Swindell, CEO of the Greater Fort Lauderdale Alliance, the economic development agency in Broward County. He says his agency has added a full-time education manager to help address the regional gap in technology talent compared with other major employment markets.
Kelly Smallridge, CEO at the Business Development Board of Palm Beach says she has changed how she characterizes technology workers because of the experience of trying to attract Amazon to South Florida.
"There are a lot of technology people that work within companies I visited — Cancer Treatment Centers of America and Office Depot," she said. "Neither of them are really technology companies, but (they have) technology people ... working within their companies."
Swindell added that workers are considering where they want to live first and where they want to work second, "which is 180 degrees different than when I was in college.
"It's important that we craft a marketing message to those individuals," he said.
Finney calls millennial generation workers "really important to our ability to sell companies on locating here." He expects to have more younger workers involved in future pitches.
About half the visiting team from Amazon were millennials, Finney figures.
"We took a quick trip to Wynwood. They had heard about it, wanted to see it," he said. "The only place they took pictures was at Wynwood Walls. They wanted to be in the photos."
All three veteran economic development leaders agree that Amazon's HQ2 was a project of a lifetime. South Florida was the only region in the state to make the shortlist, although it was seen as a longshot. Even before Amazon narrowed down its list of finalists to 20, the Wall Street Journal didn’t include Miami in its analysis of likely locations. Just a few weeks before the official announcement was made, one online betting site had Miami with the longest odds of winning — 8,500 to one.
They say the cross-country collaboration involved in South Florida's HQ2 bid will serve the region well for future economic development opportunities.
"This probably was the first time in about maybe 15 years that we collectively put together a solid marketing proposal for South Florida," Smallridge said. She added the Business Development Board of Palm Beach has launched a $300,000 marketing campaign aimed at businesses in the northeast.
Finney wants to put the regional marketing message "on steroids."
He said: "We are now redirecting a lot of our resources toward national and international audiences of business leaders who are in these key sectors that we think makes sense for this region — trade logistics, banking and finance, travel and tourism."
He also included on his list "some of the tech hotbeds where Miami simply didn't play in the past."