Hogan outlines incentives to lure Amazon to Maryland

ANNAPOLIS — Amazon could receive $5 billion in cash incentives and state and local tax credits and transportation-related funding if it were to locate its new headquarters in Maryland.

The governor’s PRIME package, a name similar to the online retailer’s signature shipping program, is the first public offering by the state in a competition against 19 other locations.

“Amazon sent a clear signal that Maryland truly is open for business by selecting Montgomery County as one of an elite group of contenders for this transformative project,” Hogan said in a statement. “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. I look forward to continuing to work closely with Montgomery County Executive Ike Leggett and all county leadership as we do everything possible to secure this incredible opportunity.”

Hogan’s package is being duplicated across the country, as mayor, governors, public officials and civic leaders spare no expense in making their pitch to the e-commerce giant for what they believe will be a bonanza of jobs and tax dollars that come with the company’s second headquarters.

As part of his offering, Hogan said Monday that he will introduce legislation he called the PRIME —Promoting ext-Raordinary Innovation in Maryland’s Economy — Act of 2018. Components of the bill, which was not immediately available, include:

• A state income tax credit equivalent to 5.75 percent of wages for each new qualifying headquarters job. To qualify, a job must be established within the first 17 years of the project and pay between $60,000 and $500,000.
• A state and local property tax credit, including a requirement for the state to reimburse the local jurisdiction for half of the property tax that would have been collected.
• A state sales and use tax exemption for construction material or warehousing equipment used in the project.

Hogan also vowed to provide $10 million per year for 15 years from the state’s Sunny Day fund. The economic development incentive account was used to provide $20 million over four years to retain both Northrop Grumman and Marriott International in the state.

The plan would also include what Hogan said would be “billions of dollars in road, transit, and infrastructure upgrades.”

The bill would specifically apply to a Fortune 500 company creating a new headquarters in the state and require employees to earn an average of $100,000. The bill would also require the qualifying company to have $5 billion or more in capital expenditures over 17 years, including $500 million in initial project costs and to hire at least 40,000 employees over that same period.

The incentives in Hogan’s PRIME legislation, coupled with the Sunny Day fund incentive, total about $3 billion, according to Hogan.

The legislation would contain clawback provisions to allow the state to recoup its incentives should Amazon locate in the state and then fail to meet the requirements of the incentive package.

Last week the retailer announced that Montgomery County was among 20 areas being considered for its so-called HQ2 project which is expected to bring as many as 50,000 jobs.

Baltimore City, Howard County and Prince George’s County were among 218 other bidders who failed to make the cut last week. Hogan had publicly supported the Baltimore effort, calling the proposed Port Covington location best-suited to the online retail giant’s needs.

Other sites on Amazon’s shortlist include: Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Nashville, New York, Newark, Raleigh, Philadelphia, Pittsburgh and Toronto and Washington, D.C.