The Wisconsin Economic Development Corp. vowed to work with Amazon.com Inc. to create an incentive package in its effort to lure the online retailer, but didn’t pitch specific figures or possible sites for the company’s second North American headquarters, according to a letter backing bids from three regional economic development organizations.
Both Mark Hogan, WEDC secretary and chief executive officer, and Gov. Scott Walker penned letters to the company in October in an effort to bolster proposals submitted by Milwaukee 7, the Madison Region Economic Partnership and The New North.
Milwaukee, Madison and the New North region of northeastern Wisconsin did not make the shortlist of finalists for Amazon’s second headquarters, which was released Thursday morning. In all, 238 cities and jurisdictions submitted proposals to become home to the proposed $5 billion campus, which would create 50,000 jobs, according to Amazon.
The finalists include many of the nation’s largest cities, including Chicago.
Officials with M7, which is a private, nonprofit entity, declined to release information on Thursday regarding the incentives and possible sites included in the organization’s bid.
“We are disappointed to not be continuing in the HQ2 selection process, but grateful to Amazon for the opportunity to submit a proposal,” said Jim Paetsch, vice president of M7, in an email Thursday. “We have compelling assets in southeastern Wisconsin. M-7 intends to continue marketing those assets to companies around the globe.”
Because of the unique RFP process, the state’s regional economic development organizations “wanted the opportunity to develop their own proposals for this project,” said Mark Maley, WEDC spokesman.
“Therefore, WEDC offered to submit a letter of support to any regional organization in the state planning to submit a proposal to Amazon,” he said.
In the letter to Amazon’s head of economic development, Holly Sullivan, Hogan touted the state’s history of working with the company, citing the $10.3 million in refundable tax credits that Wisconsin awarded for Amazon’s distribution and fulfillment centers in Kenosha County in 2014.
Meanwhile, Walker highlighted the state’s business tax cuts, streamlined regulations and tort reform during his administration. Walker also touted the state’s education system, saying it would be able to meet the company’s workforce needs.
“Wisconsin’s education system, including the University of Wisconsin System and Wisconsin Technical College System, which partner directly with businesses to meet workforce training needs, is developing a talent pool to successfully meet the needs of other high-tech firms like Google, Fiserv, Rockwell Automation and Epic Systems,” Walker said in his letter.
Hogan said the headquarters project would require special legislation and that WEDC would work with the company’s development team to develop an incentive package, but did not name dollar amounts.
“The total incentive amount, time frame, eligibility requirements and potential claw backs require additional conversations with the Amazon economic development team and will be developed during the decision-making process,” Hogan said in the letter.
Read Hogan and Walker’s letters in full below:
WEDC secretary and CEO Mark Hogan’s letter to Amazon head of economic development Holly Sullivan:
On behalf of the State of Wisconsin and the Wisconsin Economic Development Corporation (WEDC), thank you for the opportunity to submit a response to your recent request for proposal for Amazon’s next headquarters center.
The State of Wisconsin has worked hard to become known as a business-friendly state. Wisconsin has cut $4.7 billion in business taxes since 2011 and by the end of 2018, this number is expected to rise to $8 billion. A Right to Work state, Wisconsin has invested $213 million in workforce development over the last four years and continues to cut key taxes like worker’s compensation and unemployment insurance for businesses. Wisconsin’s 100% funded pension system is also ranked #1 in pension fund liability by U.S. News and World Report.
Wisconsin’s pro-business environment as evidenced by the state’s pro-business policy decisions, investment in our workforce, and a reduction in business taxes makes Wisconsin an attractive option for Amazon’s next headquarters location. These business-friendly policy implementations earned Wisconsin a top 10 ranking in CEO Magazine’s 2017 “Best States to do Business” survey.
Wisconsin has a strong reputation of being creative and aggressive in our efforts to assist projects that provide great employment opportunities to our citizens and change the economic environment of our communities. The creation of over 50,000 positions with an average annual salary exceeding $100,000 and a capital investment of over $5 billion would have a significant impact on Wisconsin.
The size and scope of the Amazon HQ2 project will require special legislation. The total incentive amount, timeframe, eligibility requirements and potential claw backs require additional conversations with the Amazon economic development team and will be developed during the decision-making process. WEDC is prepared to work with your economic development team throughout this process to help create an incentive package that is mutually beneficial for Amazon and the citizens of Wisconsin.
Amazon already has first-hand experience with WEDC and our commitment to assisting significant projects. In 2014, the state awarded $10,300,000 in refundable tax credits for your 1.5 million square foot distribution center in Kenosha County. As a valued business and economic development partner, WEDC will continue to support your current operation and looks forward to working with your team as you consider expanding your footprint in Wisconsin.
Your primary contact for this project will be Coleman Peiffer, business and investment attraction director, 608-210-6714. Please contact Coleman directly should you have any questions. Sincerely,
Mark R. Hogan
Secretary and CEO
Wisconsin Economic Development Corporation
Gov. Scott Walker’s letter to Sullivan:
For the past 23 years, Amazon has had a transformative impact on the world’s business model. From web hosting services, to online shopping, to groceries, Amazon’s innovative execution of its vision to serve positively impacts every facet of our lives. The State of Wisconsin is a prime location for the Amazon HQ2 campus, providing you with the workforce and business environment needed to continue to innovate.
We worked hard over the past seven years to transform Wisconsin’s business environment to help our companies compete globally. We cut taxes by $8 billion, streamlined regulations, and implemented tort reform to make Wisconsin a better place for business. These reforms have yielded results: in 2017, Wisconsin was ranked in the top 10 states for doing business in annual rankings from Chief Executive magazine. Wisconsin improved by 31 places on this metric since 2010.
Wisconsin is a top destination for companies that pride themselves on innovation, design, and creativity, thanks to our implementation of pro-growth policies. In 2013, Amazon located a 1 million-square foot fulfillment center in Kenosha County, investing $141 million and creating more than 1,100 jobs. Our administration worked with Amazon on plans to expand that facility. Its development will be supported by more than $10 million in enterprise zone tax credits overall. Last week, Foxconn Technology Group announced it will locate a 20-million-square-foot advanced manufacturing facility in Mount Pleasant. These investments represent transformative moments in our history as we welcome high-tech industries to our state’s economy.
Wisconsin is established as a force for business in the most critical area: workforce development. Wisconsin’s education system, including the University of Wisconsin System and Wisconsin Technical College System, which partner directly with businesses to meet workforce training needs, is developing a talent pool to successfully meet the needs of other high-tech firms like Google, Fiserv, Rockwell Automation, and Epic Systems. In addition, the state’s metropolitan areas (Madison, Milwaukee, and Green Bay) have redeveloped and reimagined their downtown communities, becoming more attractive to the next generation of employees. This combination ensures our state will attract and train the workforce required to satisfy Amazon’s employment expectations.
Wisconsin is also a leader in research. There are two top-tier “R1” research institutions in our state, UW-Madison and UW-Milwaukee. UW-Madison alone attracts $1 billion a year in research and development spending.
My administration, along with the Wisconsin Economic Development Corporation and other cabinet agencies, stand ready to work with Amazon as it continues its site selection process and we look forward to welcoming you and your project team to Wisconsin soon.