Bloomberg is incorrect - there are no front-runners at this point. We're just getting started & every city is on equal playing field (2/2)”
Why are cities across the country competing? First, the Amazon RFP promises the winning city "will hire as many as fifty thousand (50,000) new full-time employees with an average annual total compensation exceeding one hundred thousand dollars ($100,000) over the next ten to fifteen years, following commencement of operations. The Project...is expected to have over $5 billion in capital expenditures."
Second, retail is in a tailspin. Locally, Benny's announced they were closing and would lay off more than 700 full and part-time employees. Tuesday, it was announced global toy retailer Toys "R" Us is filing for bankruptcy. Most predictive may be that on Wednesday, it was reported that Wal-Mart would not hire tens of thousands of seasonal workers, but may offer existing workers some additional time.
GoLocal reached to a cross-section of business leaders, academics, realtors, and elected leaders for their insights.
SLIDES: READ THE RECOMMENDATIONS OF 17 RHODE ISLAND LEADERS BELOW
In many cities, top elected officials are engaging the public and business leaders.
In Rhode Island, is either stealth or non-existent. Again this week, Governor Gina Raimondo has refused to respond to questions. Last week her office and RI Commerce Corporation refused to respond to basic questions about RI's effort.
In other cities around the country — the process is public, proactive and inclusive.
This week it was announced that General Electric and the Boston Foundation would join the effort and provide financial support to prepare the Boston’s bid to try and land HQ2.
In Chicago, Mayor Rahm Emmanuel asked the city’s residents and property owners to nominate potential locations that could accommodate the needs of Amazon.
In Ontario, Premier Kathleen Wynne has tapped the former CEO of TD Bank to head the Amazon team designed to win the biggest economic development contest.
In Detroit, businessman Dan Gilbert claimed Detroit is a "legit contender" in the competition to land Amazon's second headquarters. Gilbert, the founder of Quicken Loans and owner of the Cleveland Cavaliers also unveiled “details of a massive $2.1-billion plan for four downtown Detroit developments that could create as many as 24,000 temporary and permanent jobs and transform the city skyline,” according to the Detroit Free Press.
In Philadelphia, the city sent a group of staffers to study the initiative. Cities across the country are all in. In Rhode Island, Raimondo’s office has refused answer questions about Amazon and it is unclear if Rhode Island is competing.
So why are cities competing? Well, according to Amazon and yet to be disputed, "Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy – every dollar invested by Amazon in Seattle generated an additional $1.4 for the city’s economy overall."
READ THE RECOMMENDATIONS OF 17 RHODE ISLAND LEADERS
Amazon is a young "hip" company, started only 23 years ago. Rhode Island has many advantages, both natural and historical that are attractive to young hip people. We do have the three T's author Richard Florida says are the cornerstones of the new economy; talent, technology, and tolerance.
The last T is one of the reasons I pushed so hard for marriage equality in RI. I would drum a steady beat on our spectacular coastal beauty, our deep and rich history and our strength in the three T's.
Specifically, I would market Warwick's City Centre where uniquely the highway, the Amtrak line, and a modern airport converge.
I'd love to see it on Allens Ave, clean up the scrap metal, get rid of the strip clubs. I love that location, I think that maybe the could work out a TIF -- what would be wise would be to survey the property there, and take [some] of it by condemnation for a public purpose -- this would be a major public purpose.
You could then put together a bond with the new property taxes, which would pay off the bond, and I believe you go get more dollars by aggressively going after the various companies that have polluted that property -- get them in the chain of title they're required to pay for the cleaning of it.
And it would be good to communicate with MA. Look at going after GE -- we didn't get the gold, we got the silver. This is where Governor Raimondo has the greatest strength -- the corporate leaders admire and like her -- if we can't get the whole thing, maybe we can get a part.
Not to compete for it would be wrong. There's nothing that says you can't have this -- you need a good creative planner to say parts could be in Pawtucket, parts in Providence -- you could have various communities with this.
I'm dreaming without knowing the facts -- I know there' a lot of confidentiality they have to sign on to where they can't speak about this. Amazon has to be careful, that although a guy like me can talk about it, I don't think state government can -- they can talk about the opportunity, but they can't say here's what we're doing.
Maybe Commerce is a player -- but isn't the lead -- maybe the Providence Foundation or other groups can be a part or lead. Maybe go to different communities and get different ideas.
Some people might say don't even try its crazy, but someone might come up with other ideas. Empower the public -- not to decide, but to listen.
We need to convince Amazon that Rhode Island is a great place to locate businesses of all sizes. We must promote our wonderful quality of life, beautiful coastline, diverse neighborhoods with affordable housing prices, and a highly skilled workforce.
We have a great geographic location between New York and Boston with a business-friendly and accessible airport and direct Acela rail access. We must reach out to the leaders of successful businesses with headquarters here like CVS, IGT, Citizens Bank, Amica, and Fidelity, and have them convince Amazon that Rhode Island is a state moving in the right direction.
We must continue to focus on tax policy reform, which has resulted in the lowest corporate tax in the Northeast, the reduction of the corporate minimum tax, and the elimination of the sales tax on utilities for all businesses
Rhode Island can compete by moving to a more tax-friendly business environment, working with the company on its infrastructure needs and giving them the same kid glove treatment like we do here in Cranston.
Amazon is an exciting opportunity because you can make an excellent case for Rhode Island. Start with our geography: we are located between two world-class cities in Boston and New York, with significantly cheaper real estate.
We have convenient air travel at T.F. Green and a growing shipping port at Quonset. Our academic institutions produce world-class scholars in research, engineering, and innovation – precisely the talent Amazon seeks to grow their business.
On those fundamentals alone we are an attractive option, but when adding in other quality of life considerations such as our world-class restaurants, affordable downcity living in Providence, and Newport’s nightlife, I truly believe Rhode Island can be a contender.
Rhode Island has so much to offer new companies. We are strategically located between Boston and New York, linked by major interstate highways, shipping ports, and rail. We have 7 institutions of higher learning. We have a great quality of life and great people willing to work hard. What we also have is a hostile business climate, one of the worst in America. Instead of reforming and eliminating the bad policies that are crushing our state’s ability to house a vibrant economy that can create plentiful, fulltime, well-paying jobs for our residents, we have illogically added more. Our state leaders simply lack the political will to challenge the insiders and the status quo. Sadly, the hardworking people of our state are paying the price.
Amazon is a retailer. More than that, it is a large retailer who ships items in and out of its warehouses by the truckloads. It uses the internet to offer its products and take orders. In the past two years, over the valid concerns and objections of the trucking industry, we have instituted the most extensive network of tolls of any state in America. Additionally, starving for money in our budget to feed the pet projects of politicians and insiders, this administration has begun charging a remote sellers sales tax, fondly dubbed the ‘Amazon tax”. Is it reasonable to think that a retailer who is subject to these two large and harmful policies, will voluntarily and happily come to Rhode Island? Especially when those two policies are added to over-regulation, a bad legal environment, among the highest energy costs, and political corruption. Clearly, despite tax subsidies and government incentives, other companies are passing on our state. I fear Amazon will, as well.
Rhode Island will be able to compete for companies that offer good jobs from entry level to the executive suite, that offer year-round employment that pays well, when we tackle the hard stuff. When we reduce our budget, weed out business killing laws and policies and when elected officials serve the common good, instead of the insiders and political cronies. Until then, we will see more companies leave than come. We need to change course soon; the largest demographic leaving Rhode Island today is working age people.
As a life-long businessman, I understand what it is to create jobs and create a business climate that is pro-jobs and pro-growth. If I had been governor, we would have had a policy already in place for luring Amazon to Rhode Island.
Components of this policy would include: having a state reputation for being business friendly; a tax structure that is appealing to executives, middle management, and shareholders; less burdensome regulations; a successful public school system; and a workforce capable of jumping in to fill the requirements of these 50,000 jobs, all of which we do not have at this time. I certainly wouldn’t have truck tolls.
In short, I would have confronted our state’s failing business climate and created a credible, long-term plan to bring Amazon as well as other employers to Rhode Island. Under current circumstances, the only way the governor can even begin to compete for Amazon is to buy them, which is a recipe for disaster.
The timing couldn't be more perfect since the legislature is in special session. I would do the following:
First off, no individual one-off corporate tax incentives, start thinking like great minds of the past and make "structural changes" not band-aid responses...use this special session and fix RI for the long haul.
Create an "environment" dedicated to the companies of the future. Pass an Act - " The 21st Century Rhode Island Business Act" - Include low corp and individual taxes, moving credits, building material tax incentives, transportation infrastructure connectivity commitments, housing concepts of the future, tuition reimbursement credits for companies, no inventory and asset taxes, technology-driven pay systems for transportation, free wifi, municipal infrastructure support, and so on.
And trade off building all of that plus the actual corporate headquarters for a "Right to Work" state designation (like 28 other states and counting; let's not be last for once).
Work with labor and trade it off for a designation starting in 2025, not right away, but at least signal to all companies we can compete with any state.
Design and build the new RI and commit to the future. Once that Act passes send it to the Governor and prepare to override if vetoed.
The General Assembly needs to lead this effort, not the Governor's office. It takes leadership and leadership requires leaders.
Businesses look for talent. Given Rhode Island’s traditional manufacturing and operations base and our emerging strength in the IT sector, our state can offer Amazon a well-trained workforce. There are tens of thousands of employable college graduates right in our area.
In fact, more than 72% of Rhode Island College graduates stay and find employment in this state. Rhode Island College’s School of Business is in the process of launching new programs in data science and operations management that could provide Amazon with both talent and guidance for continuous improvement initiatives.
I would say that it’s a tough push – we are literally competing with every city in the US & Canada. I think our play would be the “small state” play. You don’t just get Providence, you get all of Rhode Island.
You have the international airport that was just upgraded, you have hungry economic development teams that are aggressive with their rates, you have other tech companies like IGT & UpServe that have flourished.
You can pull from CT & MA easily. Commutes are short, the scenery is great and the food is unsurpassed. I think amazon isn’t just looking for a good deal, I think they are looking for a good community to join so that’s what I would focus more on.
Rhode Island has a compelling and unique message to pitch Amazon. Rhode Island can leverage its small size to make it easier for Amazon to explore, prototype and test new business models or ways to transform the customer experience.
We can accelerate the path to what's next. It's easier to take new ideas off of the whiteboard and test them in the real world in Rhode Island. New business models that work in Rhode Island can then be scaled nationally. We are a unique place for innovation @ scale.
I believe that Rhode Island needs to take this opportunity very seriously. While we need to be judicious with our resources, Amazon is truly a company of generations to come – the future. Rhode Island needs to continue to marshal and apply resources to attract and retain stable businesses that have a strong view to the future.
The opportunity to be home to a headquarters of a top 20 Fortune 500 company warrants an “all hands on deck” approach – including leaders from RI’s public and private sector - that carefully and strategically makes RI the most attractive option.
There is not a silver bullet strategy for any state to secure the location of a second Amazon headquarters. It will require a joint strategy and cooperation between business, government and the universities.
This coalition will need to demonstrate that Rhode Island has made the investments and is positioned to help Amazon make the most productive use of its human and capital resources. States and cities will compete to offer Amazon the most productive environment for its business get a return on investment.
Key issues are to align training programs with Amazon's business needs, enhance higher education and research institutions, focus site and infrastructure investments on the needs of Amazon, adopt a credible plan to improve public education, and reducing the unnecessary costs of doing business.
Having the scale and resources to compete for an Amazon headquarters presents challenges. Michael McMahon, Rhode Island's former Director of Economic Development nailed when he suggested that "Thinking big in this case for Rhode Island means partnering with others in the Boston Combined Statistical Area."
Finally, CommerceRI needs to focus on programs aimed at improving productivity in the state's business environment and less on transactions taxpayer supported real estate deals.
As this is a headquarters, I would assume that the 50,000 jobs would be well-paying. The benefit of adding 50,000 well-paying jobs should easily offset any significant income and property tax breaks that the State and city/town that will be hosting the headquarters can give. If the leadership of the State is hungry for a big win, then they should throw everything they have at Amazon to attract them. Sometimes big bets yield big returns.
This seems like the time to go “all in”. Geographically Rhode Island is one of the best places in the country to live. It should really sell itself. My recommendation would be to give Amazon every corporate tax incentive possible.
With 50,000 new employees, guessing average salary of $50,000, at 3.75% personal income tax rate, that is approximately $93,750,000 in new income tax to the State. The number would probably be higher as some spouses/significant others would be employed as well.
The State of RI has bright future based on an inclusive nexus of creative, collaborative and cutting-edge companies in life sciences, in advanced technology, in light manufacturing, in financial services, in healthcare and the service industry.
Rhode Island and Providence, in particular, are being chosen by companies and Entrepreneurs because of lower costs, a vibrant buzz, a celebrated tolerance, a very racially diverse population of minority-owned businesses and a pool of skilled workers.
It is common knowledge that the small scale of Rhode Island allows entrepreneurial connections to form easily. Relationships are deep and intersections of people and ideas happen naturally.
Make our state’s business climate, along with its innovativeness and adaptability, more than enough to compensate for our state’s size. An adequately skilled labor force, something RI obviously lacks, would also be fundamental ingredient for success in any such venture.
Looking realistically as to what Amazon is seeking for its new headquarters, the best way for Rhode Island to participate in this is by joining in with Massachusetts or Connecticut as a site for potential employees and/or housing personnel.
The state has too many negatives to attract a venture of this size. Amazon is using this process to get several billion dollars in state incentives – something Rhode Island cannot afford. Amazon may also be using this process to bargain with a state in which they have already decided to build their facilities so as to get more tax incentives.
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