Fresno is throwing the economic equivalent of a Hail Mary football pass as it makes a pitch to retail online giant Amazon to build a second world headquarters in the community.
Thursday was the deadline for communities across the nation to submit proposals for the project, which would ultimately employ as many as 50,000 people and occupy up to 500 acres of space. Hundreds of cities have announced plans to woo Amazon in hopes of winning the competition.
While some cities or states are making what Fresno Mayor Lee Brand called “very lavish offers” that commit tens of millions of dollars in tax incentives or other perks to lure Amazon, Brand used the word “counterintuitive” to describe Fresno’s proposal to Amazon founder and CEO Jeff Bezos.
“It’s turned into a bidding war and it’s something that we will not be a part of,” Brand said Thursday of the nationwide competition to land what Amazon is calling HQ2. “We don’t have the money or the resources to shovel millions of dollars at Amazon.”
The city’s proposal was accompanied by a video touting Fresno’s quality of life.
The centerpiece of the proposal isn’t a set of tax rebates, but a proposed 100-year agreement to use additional sales and property tax revenue created by HQ2 to establish an “Amazon Community Fund” that the city would use to invest in improvements that would benefit not only Amazon, but the entire city.
“This doesn’t promise a dollar in incentives,” Brand said. Instead, Amazon would work with the city to determine how to spend the lion’s share of the new tax money on such things as workforce housing, transportation infrastructure, science/technology education, and parks and trails. Those investments would not only benefit Amazon and its employees, but the community at large, Brand said.
Based on rough estimates, Fresno economic development director Larry Westerlund calculated that Amazon’s project could be responsible for $50 million or more every year in new tax revenue for the city to be reinvested through the community fund.
Brand and Westerlund both acknowledged that the odds are against Fresno. “We’ve got to be positive,” Westerlund said Thursday. “Our chances are slim … but if we don’t step to the plate, we can’t get a swing,” Westerlund said, using a baseball analogy. “It’s like me trying to hit a Nolan Ryan fastball.”
Westerlund said Fresno already has a good relationship with Amazon as the company builds a large distribution warehouse at the south end of the city; he added that Fresno’s location as a Valley hub for California’s future high-speed rail project will provide easy connections to technology talent in San Jose and the Silicon Valley and to Los Angeles. Brand added that Fresno’s lower housing prices compared to the Bay Area or Southern California could be in the city’s favor, as well.
Even if Fresno doesn’t win the competition, “this is a blueprint to go forward for the city of Fresno,” Brand said of the plan for a community fund. But, he added, “if we at least make the next cut (of Amazon’s decision-making process), that will say a lot about how Fresno has progressed.”
The Brookings Institution, a nonpartisan economic and public policy think tank in Washington, D.C., offered an analysis on Wednesday of factors likely to play into Amazon’s HQ2 decision, including a look at cities with the best chances of competing for Amazon’s HQ2 based on the requirements outlined in the company’s request for proposals. Fresno, however, is not among the top 20 metro areas included in the Brookings analysis, which instead lists San Francisco, San Jose, Los Angeles and San Diego in California; five cities in the Northeast Corridor between Washington, D.C. and Boston; Atlanta in the South; Dallas, Austin and Houston in Texas; Detroit, Chicago and Minneapolis in the Midwest; Denver; and Seattle, where Amazon already has its first headquarters. The Canadian cities of Toronto and Vancouver are also included in the Brookings list of front-runners.