(NEWARK, NJ) -- On July 11th, the Newark City Council passed enabling legislation authorizing up to two billion dollars previously announced as part of its campaign to bring Amazon’s second international headquarters to Newark. The ordinances illustrate the city’s commitment to bring Amazon to Newark, but also apply to any transformative project providing a similar number of jobs and investment.
Amazon must commit to creating at least 30,000 new jobs and create investments of at least $3 billion over a 20-year period to qualify for these incentives. One ordinance authorizes creation of an accelerated process of land-use and permit approvals, and a second enables Amazon to receive a 100 percent payroll tax exemption for employees living in Newark and a 50 percent exemption for all other employees. The total payroll tax exemptions are capped at one billion dollars over the life of the project. A third ordinance creating an additional category of transformative headquarters within the Long-Term Tax Exemption ordinance is also expected to pass.
“The City Council has brought Newark a giant step closer to being Amazon’s choice for HQ2,” said Mayor Ras J. Baraka. The creation of 12,500 jobs for Newark residents, the added revenue to Newark families plus the added revenue to the City of Newark, Newark Public Schools and Newark Public Library make HQ2 a game changer in the transformation of our city.”
“I am proud to stand by the strong leadership of Mayor Baraka and all who are speaking in a clear and unified voice that Newark is ready to lead and win the Amazon bid. Let there be no doubt: we are all in this together and Newark will continue to rise as one,” said Governor Phil Murphy.
A third-party independent analysis conducted by the Anderson Economic Group of Chicago concludes that the financial and job benefits of Amazon choosing Newark far exceed the dollar amount of the incentives. Specifically, The Anderson Economic Group reports that:
● Upon completion, HQ2 would create at least 12,500 direct and indirect jobs for residents. (Newark averaged about 8,751 unemployed residents in 2017.) HQ2 would also increase Newark household earnings by $1.2 billion annually starting in 2035.
● Amazon HQ2 locating in Newark would result in more than 135,000 net new direct and indirect jobs in New Jersey. These jobs would increase New Jersey household earnings by $11.4 billion.
● By 2035, Amazon HQ2 would have an annual net fiscal impact of $113 million on the State of New Jersey. This includes a $599 million net increase in tax revenues and a $487 million increase in service costs.
● By 2035, Amazon HQ2 would have a combined net fiscal impact of $41 million on the City of Newark, Newark Public Schools, and Newark Public Library, collectively. This includes an $80 million increase in tax revenues and a $40 million increase in service costs.
● Amazon HQ2 would also have a positive net fiscal benefit on Essex County. By 2035, the annual impact would reach $41.3 million, due to increased PILOT and property tax revenues.
The Anderson Economic Group, LLc., is based at 20 South Clark Street, in Chicago.
