City and County officials announced late Wednesday that they are pulling out of the pursuit of Amazon’s planned second headquarters, explaining that despite its competitive advantages, San Antonio will not “mortgage [its] future” to win the bid.
In a joint letter to Amazon CEO and Chairman Jeff Bezos, Mayor Ron Nirenberg and Bexar County Judge Nelson Wolff said Amazon’s request-for-proposals process initially prompted City and County staffs to embrace competing for the $5 billion project. Amazon’s proposed “massive urban campus” would have had a major transformative impact on the region, they wrote.
But, ultimately, San Antonio removed itself from what Nirenberg and Wolff called “a bidding war,” choosing instead to focus on improving roads, mass transit, and the city’s international airport as part of a longterm strategy to enhance the area’s economic development portfolio.
Nirenberg and Wolff wrote that the City and County want to follow a careful path toward smart growth and resiliency. “Sure, we have a competitive toolkit of incentives, but blindly giving away the farm isn’t our style,” they wrote.
The San Antonio Express-News first reported the news of San Antonio’s decision to drop out of the competition on Wednesday afternoon. City and County officials later released the letter to Bezos.
To read the full letter, click here.
The Seattle-based company announced on Sept. 8 that it was requesting proposals from communities across North America as part of a process to develop its new campus. Amazon pledged that the sprawling headquarters – or HQ2, as it is called – would be equal to the Seattle campus in size and bring more than 50,000 new high-paying jobs that average more than $100,000 in yearly salary. Proposals to the e-commerce giant were due on Oct. 19.
Amazon issued some requirements for an ideal home for HQ2, including that the host city have a minimum population of 1 million, an international airport, and a “stable and business-friendly environment.”
The project would likely benefit from a set of tax and economic development incentives not only from the winning host city, but from that state, too.
In the letter to Bezos, Nirenberg and Wolff noted that San Antonio “has had a long history of successfully attracting and retaining global companies by smartly finding the right mix of incentives and opportunities to make our community the perfect location for long-term investment.”
In an interview with the Rivard Report Wednesday, Wolff described serious competition between local and state governments in the race to win over the world’s most renowned online retailer.
According to a CNN report, for example, New Jersey’s leaders were considering a law that could overhaul a current incentive program. If approved, the state could offer Amazon up to $5 billion in tax breaks spread out over 20 years.
The city council of Stonecrest, Georgia, voted that it would de-annex 345 acres of land and call the land “Amazon, Georgia” if it were awarded the project.
“I am disappointed we did not discuss pursuing Amazon’s new headquarters,” Councilman Greg Brockhouse (D6) stated in a Thursday press release. “I am not in favor of giving away the bank to lure corporate giants by any means. However, we could have been thoughtful, measured and aggressive within the goals and culture of the future we want for our San Antonio.”
Wolff said the County and City should concentrate on investing in a diversified workforce pipeline through public-private sector initiatives such as SA Works.
“We just thought it was an unreasonable expenditure of taxpayers’ money to get into a high-stakes game like this,” Wolff added.
Wolff said it would be like “giving away the store” if San Antonio and Bexar County were to offer an inordinate amount of local incentives while also maintaining infrastructure and workforce investments.”
“We know it’s going to cost money with or without [Amazon],” he added.
The County judge also said he would prefer to wait and see whether Amazon or other large-scale companies end up seeing San Antonio as a viable place to do business after local infrastructure and workforce improvements are realized.
Nirenberg agreed with Wolff’s sentiment, that the City should not rely on incentives to attract companies such as Amazon. “We would welcome Amazon, but we aren’t going to mortgage our future to do it,” he told the Rivard Report.
Nirenberg has made it known he, too, wants to prioritize infrastructure improvements and workforce development. The mayor announced this week that cybersecurity business executive John Dickson will lead a 20-member committee to study air transportation options, including possible expansion of the current San Antonio International Airport. A lack of nonstop flights to major destinations, especially for business travelers, has long been a major concern for local leaders.
Jenna Saucedo-Herrera, president and chief executive officer of the San Antonio Economic Development Foundation, said in a statement that the project would not be the best use of City and County incentives.
“We know that Amazon and San Antonio are culturally compatible and that we both have eyes strategically set on the future,” Saucedo-Herrera said.
“Smart growth, municipal resiliency and connectivity are areas we plan for and invest in today,” Saucedo-Herrera said in the statement. “Our decision regarding the Amazon [Request for Proposals] serves as a testament to our dedication to be good stewards of the economic incentives San Antonio has to offer businesses.”
Rocio Guenther contributed to this story.