When Amazon announced its search in September for the home of a second headquarters, Howard County joined a nationwide frenzy to vie for the $5 billion project and the economic boom it could bring over two decades of development.
Last week when Amazon unveiled the top 20 of 238 contenders, Howard County was not on the list.
The county’s proposal, assembled by the quasi-government Howard County Economic Development Authority, offered up to 8 million square feet of space in the Gateway Innovation District development and six miles away in downtown Columbia, part of the space Amazon would need for up to 50,000 employees.
Working with private partners, primarily Columbia’s master developer the Howard Hughes Corp., the glossy promotional packages also contained information that was redacted so as to not tip off others about the amount and type of financial incentives the county was willing to offer the online retail giant.
County Executive Allan Kittleman, who wrote a letter of support for the project, declined to disclose details of the incentives, saying through an aide this week that he could not speak about the incentive details because information was proprietary. Economic Development Authority CEO Larry Twele said that given the preliminary stage of the proposal, neither Kittleman or the County Council had to formally approve the bid, and the council did not see it before submission to Amazon.
Twele also declined to comment on details of the incentive package, citing confidentiality between the economic development authority and Amazon.
The proposal offers a glimpse of the economic development strategy the county continues to pursue, building on plans already underway, including contemporary, open-air office space in Columbia Gateway and a fully built out downtown Columbia, beginning with 1,100 new residences, more than 430,000 square feet of retail space and 645,000 square feet of office space it promises to complete by the end of 2019.
Former County Executive Ken Ulman, who led the county during the creation of the Downtown Columbia master plan in 2010, said he wasn’t surprised the county was cut from the running because of its lack of mass transit, which was one of the “core preferences” listed in Amazon’s request for proposals.
Other preferences included in the request included proximity to an international airport, sustainable facilities and a highly educated labor pool, characteristics that Ulman said the county fulfills.
“Howard County has almost all of the ingredients necessary,” said Ulman, who now runs Columbia-based consulting group Margrave Strategies. “The request that Amazon put out was to a large extent the guidebook for communities of the kinds of things that you must have in order to be an attractive location for companies like Amazon.”
Larry Twele, the CEO of the economic development authority, said the jurisdiction nonetheless caught Amazon’s eye. The Seattle-based company has reached out to set up talks with the county about possible collaboration in the future. Twele declined to say more about why Amazon liked the county’s bid or what a future project could entail; he said no date has been set for the meeting.
Amazon spokesman Adam Sedo said he could not comment on any specific jurisdiction’s proposal, but did confirm the company was in the midst of reaching out to every candidate to discuss their bid in more detail. An Amazon news release announcing the top 20 candidates also stated that through the bid process the company “learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”
Kittleman said he had not been briefed on Amazon’s reaction to the county’s bid, but has sent a letter offering support to Montgomery County Executive Isiah Leggett. The neighboring county, along with Northern Virginia and Washington, D.C., made Amazon’s cut.
“They felt our proposal was strong enough in many areas,” Twele said. “They know they’re going to be expanding outside of just this headquarters project, so they want to talk to us about how we are fit for some other projects they may have.”
The proposal’s description of downtown Columbia, with the pages bearing Howard Hughes’ logo, pins it as a place to “grow boldly” in a healthy, vibrant hub boasting Merriweather Post Pavilion, protected green space, hotels, restaurants, shops and apartments. Spanning across six possible sites, the downtown portion of the plan totaled 3.5 million square feet of office space.
Its Columbia Gateway supplement talks of the innovation district’s many work-life amenities, including a rock-climbing gym, restaurants and Howard Community College and University of Maryland, Baltimore County training centers. The pages show off trendy, industrial designed office spaces, including enclosed suites and open areas, and mention 121 acres that are ready for development in the short term, with another 165 acres of warehouse space that could be redeveloped.
The third portion of the county’s bid is largely focused on what Twele said he believes makes the county such a strong business contender— its location between Washington and Baltimore, its sea of highly skilled labor and a high quality of life.
“The companies will follow the talent. The downtown Columbia project is a great project to be able to provide that live, work, play environment,” Twele said. “It really does become a very attractive center in the context of Howard County being a very attractive place.”
The county’s bid details attributes of a workforce, including that 30 percent hold a graduate degree and 56 percent of college graduates in the county hold a science- or engineering-related degree. It talks of the county’s impeccable schools and the neighborhood amenities, such as pools and fitness centers provided by the nonprofit Columbia Association.
The major detail left out of the bid package is the set of financial incentives offered to Amazon, which could have included items such as tax credits and tax-increment finance options. TIFs made headlines in the county in 2016 with the passage of a $90 million public financing deal to spur the redevelopment of downtown Columbia, the largest of its kind in county history.
TIFs and other major tax incentive tools have advocates and opponents, with proponents saying the deals work to help dilapidated areas transform into economic hubs, while critics say they’re nothing more than government handouts to developers.
Mike Mucha, director of research and consulting for the Chicago-based Government Finance Officers Association, said that TIFs are a widely adopted tool by local governments, and that when used strategically for a truly “blighted” area, can spur business.
However, when used by an area that does not need the incentives to create development, or if such development doesn’t actually pan out, Mucha said TIFs create a strain on local governments that are still on the hook for the money provided in the deal.
Gov. Larry Hogan released the details of his $5 billion pitch to lure Amazon to Montgomery County on Monday, proposing a "PRIME" Act that would give Fortune 100 companies that invest $5 billion in the state a series of tax breaks worth $3 billion.
“In the development community there’s a perception that it’s like free money. You take a rundown, vacant lot that wouldn't be generating anything anyway, so why not create a TIF district and use it to spur some development,” he said. “But that doesn’t take into account [that] if you have a thriving downtown, chances are it would be developed. So you could be providing an incentive for something where an incentive isn’t really necessary.”
No matter what Howard County may have offered Amazon, experts such as Jonathan Aberman, managing director of Virgnia-based tech firm Amplifier Ventures and an adjunct professor in University of Maryland’s Robert H. Smith School of Business, said no tax incentive is more important than the qualities of a jurisdiction itself.
“Incentives are used by jurisdictions as a way to compete with others. You can have all the incentives in the world, but if your community doesn’t satisfy the growth needs of the business, they won’t locate there,” Aberman said.
A cyber-focused future
Twele said the county’s proposal highlighted attributes that make the area well positioned for the future.
He expects the county to continue to focus on growing its cybersecurity sector, and that the authority is committed to helping existing firms flourish so that outside companies will be drawn to Howard County.
“Large companies can be an absolutely important part of a business environment,” Twele said. “But our stock and trade is the diversity of our small businesses.”
Twele wants to see the expansion of the county’s Innovation Center building in the coming years to include more companies and universities such as the University of Maryland. Talks for bringing more organizations into the building are already underway, Twele said, but did not give a timeline on when they may begin moving into the center.
Twele also wants to see the completed redevelopment of the Gateway Innovation District into a thriving business hub. This project, which is now in planning stages, could take a financing plan such as a TIF to complete, but Twele said they won’t know for sure until the project advances, which could take years.
Gateway’s redevelopment is also a major focus for Kittleman, who said he wants to someday see a designated bus and bike route connect the district to downtown Columbia.
“I want Columbia to be a place where people can actually live, walk and bike places,” Kittleman said. “To have more of a livable feel to it instead of it being a suburban driving feel.”
A long-term strategy to grow businesses and create a center for activity such as downtown Columbia or the Gateway district is essential, Aberman said, rather than just nabbing a major contract.