Tag: business

Let’s Make a Deal: What Metro Birmingham Cities, Counties Give Away to Get New Businesses

When online retail giant Amazon announced that it was looking for a home for a second headquarters that would bring 50,000 high-paying jobs, cities all over the nation — including Birmingham — mobilized to attract the latest holy grail of corporate prestige and new jobs.

In the end, the company decided to split the HQ2 project into parts, with half going to the Long Island City section of New York City and the other half to Arlington, Virginia. An additional “center of excellence” was located in Nashville with about 5,000 jobs. But metro Birmingham, which gained publicity with the giant Amazon shipping boxes it used in its promotion, didn’t come away empty-handed. A new distribution center employing at least 1,500 workers is being built at the western end of Bessemer.

The effort to attract Amazon was waged in public by both company and cities, an unusual approach. Amazon announced HQ2 in the news media and opened competition to any city. Most efforts to bring new employers to an area are much more subdued, partly to avoid tipping off other municipalities competing for a project.

David Carrington, the former Jefferson County commissioner who handled business and industrial development until his term ended last year, said the decision for Jefferson County to go after the Amazon project was a challenge.

“It was kind of a ‘whosoever will may come’,” Carrington said. “The decision to go after HQ2 was a tipping point. On paper, it was a reach. It was a very quick project and had a core of 15 to 20 people working on it. It was an out-of-the-box presentation (literally, featuring the giant Amazon shipping boxes) that we were told later precipitated their interest.”

In total, about $200,000 was spent on the drive to attract Amazon, plus incentives from the county, Bessemer city government and the state. Jefferson County kicked in $3.3 million, primarily for road improvements, while Bessemer agreed to cap permit and business license fees in exchange for meeting certain employment goals. The city will also make quarterly payments to Amazon to reimburse the company for part of its capital costs, again tied to employment levels. In return, metro Birmingham gets a company with instant brand recognition and a $40 million payroll.

While the Amazon HQ2 project was very public, Carrington and his successor, Steve Ammons, have a staffer labelled “confidential assistant” to usually keep such industry-recruiting information under wraps. “Most (companies) don’t want people knowing they are looking because they don’t want to get five RFPs (requests for proposals). Obviously, the community wants to keep it confidential because they don’t want, say, Greenville, S.C., to find out we’re in on a project,” Carrington said.

From Irondale to Gardendale, Hoover to Birmingham, incentives are deployed at the municipal level in a metropolitan area with three dozen cities, as well as by state and county governments in Alabama. Read more.