Philly Doesn’t Want to Tell You What It Promised Amazon for HQ2
Locales across the country have offered the company big tax breaks and more to attract its second headquarters. Here’s why the secrecy surrounding Philly’s bid should concern you.
From New Jersey: $7 billion in tax incentives.
From Chicago: $1.32 billion in workers’ income taxes.
From Chula Vista, California: 85 acres of land, worth $100 million, for free. (And no property taxes for 30 years.)
These are a just a few of the incentives cities and states have offered Amazon in an attempt to secure the online retail giant’s second headquarters, which the company pledges will bring the winning locality 50,000 jobs at an average salary of $100,000. In a calculated plan earlier this fall, Amazon invited regions across North America to compete for HQ2, opening the door for a slew of favorable offers from politicians who appear desperate for a slice of the company’s economic prosperity.
To much fanfare from local business leaders and urbanists, Philly submitted a neatly packaged HQ2 bid to Amazon in October. But because the city has yet to release a copy of its bid (which, in a collective public and private effort, cost local agencies roughly a quarter-million dollars to prepare and publicize), constituents have no clue what was dangled in front of Amazon to lure the company to our backyard. Here’s why that lack of transparency could be problematic.
Amazon’s Hunger Games
“In an era of brutal austerity, cities are hollowed out and hoping for a savior,” they write. “Since the tech sector is flush with cash, by showing up and saying the magic words – growth, jobs, investment, innovation – city leaders bend to their will.”
The Seattle Times columnist Danny Westneat recently wrote that “some City Halls seem willing to go beyond just throwing money at Amazon … They’re turning over the keys to the democracy.” Take Chicago’s $1 billion in workers’ income taxes — instead of financing the state of Illinois (and potentially funding public services, like schools and roads), taxes paid by Amazon workers would instead benefit Amazon.
— Taniel (@Taniel) November 26, 2017
Another example bolstering Westneat’s and Sadowski and Gregory’s claims is Fresno, California, which proposed funneling 85 percent of every tax dollar generated by the new headquarters into a separate fund dedicated to supporting HQ2 and other projects determined by a board of city officials and Amazon representatives. And some cities have gone beyond tax breaks: Boston vowed to create an “Amazon Task Force” that would include city-paid employees working to “support a seamless permitting process” for HQ2’s development, as well as a city coordinator to “develop and enhance career pathways for Amazon.” It almost goes without saying that such a plan would likely grant Amazon the ability to exert power in local politics.
The “Right to Know”
Given these startling promises, it’s no wonder cities like Philly have attempted to stay mum about their Amazon bids. Those that have disclosed their proposals have, for the most part, done so only after reporters and others demanded or sought access. In the case of Chicago, journalists obtained access to the bid through sources familiar with the offer process. Boston, however, released it’s own.
Philly is, by many assessments, regarded as a top HQ2 contender. On October 19th, the city released what it said is a “significant portion” of its submission through the Philadelphia Delivers website, which pitches Philly as a city that “possesses all of the key ingredients [Amazon] needs to support its long-term growth,” including talent, logistics and livability. (ICYMI, the city’s ambition for HQ2 was parodied in an Onion article.)
— Jim Kenney (@PhillyMayor) October 19, 2017
Philadelphia magazine filed a Right-to-Know request on November 27th asking the city to share the full bid; we received a response from the Law Department on December 5th advising us that it will assert its right to take 30 days to fulfill the request, per state law.
Some background: The city is legally required to send a response either completing or confirming Right-to-Know requests within five business days. The 30-day delay is typical of requests filed via the Right-to-Know law, which was essentially established to guarantee journalists and others access to copies of public records held by government agencies. The city receives about 1,800 Right-to-Know requests each year, and the Law Department regularly asks for 30-day extensions to those inquiries.
The Law Department partially blamed the delay (as it often does) on staffing limitations “in retrieving and reviewing the record requested.” However, it’s worth pointing out that accessing and presenting the bid probably shouldn’t be difficult or time-consuming for the city, as officials surely had no issue doing so for Amazon in October. The department’s more reasonable justifications include the need for a legal review to determine whether the record is subject to access under the law. In other words, officials are determining if they are, in fact, legally required to release the bid – which means there’s no guarantee we’ll even get the document after 30 days are up.
Asked about the delay, city spokesperson Lauren Hitt said via email: “We have not released additional materials submitted as part of the proposal to date to avoid jeopardizing our competitiveness in this deal or our position in business discussions with other entities interested in relocating to Philadelphia.”
The delay isn’t “unique to Amazon,” Hitt said, and the city is “working to release additional information in response to the requests it has received without negatively affecting its position. Given the sensitivity of these types of discussions, and the posture of the HQ2 deal specifically, this necessarily takes time.”
What’s at Stake
The city’s hesitancy to release the offer raises questions about transparency, especially in the wake of Kenney’s campaign promise to “make city government more open and transparent.”
Dr. Cary Coglianese, a University of Pennsylvania law professor specializing in regulation and business-government relations, said that, given the stakes, Philly and other local governments could have legitimate reasons to maintain secrecy in the midst of the HQ2 competition — but with a catch.
“In a context like this … any city competing for Amazon will want to keep its secret,” Coglianese said. “It’s not necessarily nefarious. It could just be that they want to make sure that their bidding is not undercut by some other city that knows what they’re providing.”
But in keeping citizens in the dark about potential offers, the city is creating “somewhat of a bias” toward Amazon, Coglianese said. He added that there is a “compelling need” for constituents to be made aware of proposals that will affect the rest of the city – such as promises of tax relief or “other favorable positions” that require full city approval through City Council or other boards or processes.
“The pivotal time for any city to know about any arrangements being offered is at the time they’re offered, when they can be dispassionately weighed without the influence, if you will, of an offer by Amazon,” Coglianese said. “If the city wins, it has more pressure to abide by the promises.”
For now, it’s impossible to say whether or not Philadelphians will have a bone to pick with the city over its Amazon bid – given that we don’t know what it holds. But maybe that, in itself, is a cause for concern.
Fabiola Cineas contributed reporting. This story has been updated to clarify the sources of funding for Philadelphia’s bid submission.