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South Florida to Amazon: Come for the Lifestyle and Location, Not the 'Corporate Welfare'

Officials Say They Don't Lead With Incentives When Recruiting Companies to the State
July 9, 2018
Business development leaders in South Florida are insisting they won't be offering massive financial incentives to land Amazon's second headquarters.

"We are not going to do that, and we don't think we need to," said Bob Swindell, chief executive of the Greater Fort Lauderdale Alliance.

Local officials still won't say what they are offering Amazon to come to the region as part of the Internet giant's high-profile nationwide search, but until now they've been mostly tight-lipped about any discussion of an economic stimulus.

Many of the 20 finalist communities nationwide have so far not disclosed their offers to Amazon, but those that have appear to fall into two camps.

South Florida appears to be siding with Boston and Toronto. Those other HQ2 finalists are believed to have forgone offering large financial packages in their respective bids, in stark contrast to some finalists, such as Maryland, New Jersey and Philadelphia, that have made no secret of their aggressive financial incentive packages.

In a recent report to Miami city commissioners related to an appraisal the global real estate services firm conducted on a large property being considered by the city for redevelopment, CBRE noted the market's selection as a finalist in the HQ2 'sweepstakes' reflected the overall desirability of the market for corporate entities.

However, CBRE also noted that Florida's opposition to "corporate welfare" may hinder South Florida’s chances of landing Amazon's co-headquarters and its 50,000 well-paying jobs.

In the report, CBRE’s Miami office highlighted the tri-county region’s strengths, which include being an international gateway and a global distribution hub through its port and international airport. CBRE also noted the region's favorable climate and even more favorable business climate, with no state or local income taxes.

But the real estate firm also listed three areas as shortcomings that it said could derail the bid.

"Because of strained budgets and political opposition to ‘corporate welfare,’ state and local officials are unlikely to offer Amazon an incentive package on par with other metro areas,” the report noted.

As a general practice, business development officials say they don't lead with incentives when trying to attract companies to the state.

"With a project of this magnitude, so many other things have to make sense before incentives even become a talking point," said Kelly Smallridge, president of the Business Development Board of Palm Beach County.

Smallridge and Swindell worked with Michael Finney of the Miami-Dade Beacon Council in preparing the Amazon bid.

"We firmly believe our tax climate is the incentive that never stops," Swindell added.

Nine years ago, the city of Miami and Miami-Dade County agreed to pick up most of the tab for a new baseball stadium for the Miami Marlins. The ballpark cost almost $500 million in taxpayer money, and the agreement with then-team owner Jeffrey Loria was widely panned, so future handouts may be a tough sell.

Money issues aside, CBRE also noted that South Florida’s transit system, while the most extensive in the entire state, still lags behind in size compared with transit systems in the Northeast.

CBRE added that the distance between South Florida and Amazon’s current headquarters in Seattle could be considered a drawback in terms of travel costs for senior executives, but it also noted the distance provides an advantage in terms of geographic diversity.

Amazon narrowed its list from 238 bids to 20 in January and has since visited the finalist communities. The retail giant said it would select an HQ2 site this year, though the company has added little else about the search and insisted that local officials also keep quiet about the process.

South Florida is getting virtually no buzz nationally as a serious suitor for Amazon. Analysts and market watchers appear to be more intrigued by the chances of Atlanta, Boston, Washington, D.C., and its suburbs in landing the huge retailer and its planned $5 billion investment.

The CBRE report was included in an appraisal the brokerage conducted for the city on the Melreese Golf Course in Miami. Soccer star David Beckham is scheduled to meet next week with commissioners about a proposal to build a soccer stadium on part of the 131-acre course.

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