Details of Cleveland's Amazon Bid, Released Following Court Order
Cleveland's failed bid for Amazon's second headquarters is no longer a secret. After months of public records requests by several news organizations, and a court case on behalf of WEWS-TV News5's investigative reporter Sarah Buduson, the city released the bid Friday. In it was the promise of more than $3.5 billion in tax breaks and the creation of Amazon's own power grid. Sarah Buduson joins me for details.
Break down the tax incentives. Where would the money be coming from?
The city of Cleveland offered $804 million. That includes tax incremental financing over 30 years, so most of the property taxes would not go to the communities. Only the schools would still get taxes from Amazon during that time period. Another interesting part of Cleveland's offer was that would include a 50 percent wage tax credit for 15 years (for Amazon employees). Cuyahoga County was offering $646 million, including $200 million to subsidize a micro-grid, which we'll talk about later. The state of Ohio was offering $1.3 billion. That includes $25 million for roadway improvements. I think a lot of people listening are thinking, why can't we get that money right now, especially if you drive around Cleveland.
This was based on Amazon creating how many jobs?
More than 40,000 jobs and $4 billion in payroll by the end of 2028. The hope was that offering all of this would result in us getting more than 40,000 jobs in our area.
That $3.5 billion is about one billion dollars more than what was offered by Columbus, the only city in Ohio to be among the finalists. The Columbus Dispatch estimates the city's incentives at $2.6 billion. And it's more than the $3 billion that one of the winning cities, New York, had offered before community opposition prompted Amazon to change its mind. What do you think of the size of Cleveland's tax incentives?
The numbers are staggering, in part, because if you ask Mayor Jackson why the city isn't doing something, he'll often respond, 'how are we going to pay for it?' This proposal raises a lot of questions about how reasonable it was for us to offer these kinds of deals. What is our financial health, how much can we really give to attract new businesses here? And I think the most important thing is, could we really deliver on all of these promises?
The Cleveland bid also promised Amazon its own power grid. Tell me more and why was it included.
It's supposed to ensure reliability. The proposal says that by creating an "island of power" for Amazon that's not part of the main electric grid, they could guarantee "99.99 percent" reliability. This really raises a red flag about Cleveland Public Power. What is it telling us that our leaders found it important to find a way to make sure Amazon knew we would create something else other than what we already have in place?
Tell me about the land the city was proposing for Amazon's campus. You noted in your story for News5 that it would have re-made Downtown and the waterfront. How so?
The city proposed giving Amazon land near the Browns stadium and on the Scranton Peninsula in the Flats. So, all of that prime waterfront real estate would have belonged to Amazon. It also proposed integrating Amazon into the empty spaces in the Warehouse District, really weaving them into the fabric of that area, and 'engaging directly with Public Square' by building a skyscraper in a spot that maybe could use some help. It's now home to a parking lot. It also would have given Amazon office spaces in places we've long known about: the Terminal Tower and the Post Office plaza. This transformation is another reason why this proposal should be public. This proposal would have changed the heart of downtown. You can debate whether that's a good thing or a bad thing, but it's certainly something people would want to know.
Cleveland did not initially make its bid public. It was not the only city among the 238 bidding for HQ2 to make that decision. You had to file a complaint with Ohio Court of Claims to get this information released. What was your argument and what was the city's counter argument?
I want to thank my employer, News5, the Scripps Co. and our attorney at Baker Hostetler for their help in getting the proposal and make it public. If they hadn't helped, we wouldn't be here today. This proposal would still be a secret. Cleveland did not want to make it public. Our argument was really simple: the proposal is a public record and should therefore be released to the public. The city gave two reasons they couldn't release the bid. They used the trade secret exemption in the public records law. The Court of Claims disagreed because the city made no effort to prevent disclousre. They gave the proposal to Amazon; they didn't make any rules about whether Amazon could make it public. The court also found no evidence that sharing this information would cause any harm to Cleveland's further economic development.
You're part of an investigative reporting team that runs into these kinds of information road blocks all the time. Where does this secrecy by the city, and the scope of the project it was trying to shield from public view, fit into your overall experience?
This is a significant win. Ask any journalist in town, it's well-known Cleveland does not provide public records in a timely manner. Officials will even delay or refuse to provide basic information, like the number of employees who work in a department. So, this is a win for transparency in government, the rule of law and for taxpayers, who want to know how their leaders plan to spend their money.