Exclusive: Big dreams and big incentives offered in Tulsa’s rejected bid for second Amazon headquarters

Donate
Downtown Tulsa, as seen from The Gathering Place. DYLAN GOFORTH/The Frontier
The city of Tulsa’s proposal to Amazon last year as it sought the company’s coveted second headquarters included a sales tax bump that would have generated more than $1 billion over 25 years, $500 million in revenue bonds and no-cost offers of “publicly-owned land.”

The bid, a draft of which was obtained this week by The Frontier, had previously been unreleased by city officials and other agencies who argued it was not a public document, though it offered more than a billion dollars in public taxes, public land and other incentives paid for by the public to the corporation.

The document appears to be mostly complete, with some areas awaiting final editing or flashy quotes from Tulsans — the bid is full of testimonials from the likes of Tulsa Public Schools Superintendent Dr. Deborah Gist, ONEOK, Inc. CEO Terry Spencer and Williams Company CEO and President Alan Armstrong. It is dated Oct. 12, 2017, and includes an email from Deputy Chief of Economic Development Kian Kamas noting the full proposal was to be overnighted to Amazon the following week.

Kamas was not using a City of Tulsa email address when she emailed the Amazon proposal, instead using a personal googlemail.com email address.

Amazon released the list of finalists in January, and Tulsa didn’t make the cut. The company announced earlier this week that it had selected sites in New York and Virginia.

Tulsa’s bid contains less information than the detailed releases out of the New York and Virginia, though the broad strokes are similar. The city appeared to be ready to offer land, payroll rebates, tax breaks and other incentives to lure what would have been tens of thousands of jobs.

Get emails from The Frontier

The proposal focuses on the River West Site (which would have sat on the west side of the Arkansas River across from The Gathering Place) that Mayor G.T. Bynum discussed earlier this year and mentions acquisition “of the Mid-Continent Concrete Company there” under a “Site Grant” heading. It also briefly mentions another proposed location “at the Historic Greenwood Site” where additional acreage for Phase 1 “would be completed utilizing the proposed public investment initiative,” though no other mention of Greenwood is made in the document.

The public investment initiative is the “dedicated sales tax increment” of 0.45 percent the city committed to in the bid. Bynum had previously disclosed some details of this offer in January, noting that in 2003 Tulsa County approved a similar tax increase in hopes of luring Boeing Co. here to build an assembly plant, an offer the company ultimately declined.

Aside from touting Tulsa’s history of corporate giving, innovation and cultural amenities like the Gilcrease Museum, Tulsa Tough, the BOK Center and Circle Cinema, the city’s proposal also included a pair of interesting previously unheard of additions.

Tulsa Mayor G.T. Bynum. SHANE BEVEL/ForThe Frontier

It states “Tulsa leaders have engaged the Oklahoma Department of Transportation to commission a study on the viability” of a new interstate highway — dubbed Interstate 42 — that would connect the Tulsa area to “Walmart Headquarters and (the) University of Arkansas.”

The highway would “stretch along US-412 from I-35 to I-49 in Northwest Arkansas” in a high-speed corridor that would connect Tulsa to that region and give “better access as a central hub to Oklahoma State University and cities in Northwest Arkansas, Wal-Mart headquarters and the University of Arkansas.”

Read Tulsa’s full proposal here

The proposal also says that QuikTrip had committed to pursuing electric vehicle charging stations at its Tulsa market stores “with an eye toward making autonomous vehicle charging a possibility for testing product delivery.”

The bid also said that the Tulsa International Airport could increase its flight capacity by 50 percent with “no new infrastructure,” offering four daily flights to New York, San Francisco, Seattle and Washington, D.C.

While Tulsa missed out on HQ2, in June Amazon announced plans to open a smaller fulfillment center in the city that would create more than 1,000 jobs.

The details
As information of specific details from many of the Amazon HQ2 proposals has leaked, reaction has been swift and in many cases extremely negative. Georgia, which made the list of finalists, offered a state-funded school to train Amazon employees, an exclusive airport lounge with free parking for Amazon use only, and more than $2 billion in additional incentives. Maryland offered more than $8 billion in tax incentives and other infrastructure upgrades.

New York’s winning bid included a taxpayer subsidized helipad for Amazon CEO Jeff Bezos, as does Virginia’s.

Amazon is currently worth more than $1 trillion and Bezos’ net worth has risen north of $130 billion according to Forbes.

Many economists believe huge tax breaks for corporations offer little to no economic benefit, but it’s easy to see why cities were willing to offer such outlandish tributes to Amazon — the company was promising $50 billion in investment and as many as 50,000 high-paying jobs.

Bynum, in a statement provided to The Frontier, congratulated the winning bidders and said he was glad Tulsa had “a shot at that kind of opportunity.”

You can’t just focus on what Amazon brings to the table — you have to appreciate all the ancillary businesses that come to that community as a result of Amazon’s facility,” Bynum said. “Look at Bentonville, and the ripple effect Wal-Mart has had there. So any time you have a shot at that kind of opportunity, you give it all you’ve got. I congratulate New York and Virginia. But I do want to stress that going through the process was incredibly important for us. It allowed us to reorient our recruitment processes away from an obsession with sporting goods stores and outlet malls, and to reorient it toward what we need to do in Tulsa to attract the greatest companies and employees in the world to our city. I am very thankful we had the opportunity to go through that exercise so early in my time as mayor.”

When Bynum announced Tulsa would seek the second Amazon headquarters, he famously posted on Facebook that he would do “whatever it takes” to bring the company to Green Country. But the proposal obtained by The Frontier lacks some of the fine details disclosed in bids by many of the finalists, likely due to Tulsa not making it beyond the first round of cuts.

Instead it highlights different aspects of the city — like the Gathering Place, and Tulsa’s lower cost of living and higher per capita income figures.

It also describes the potential for partnerships with American Indian tribes, and promises Tulsa will be a catalyst for 21st Century infrastructure.

“For the first time in many people’s lifetimes, owning a car will be optional,” the proposal states. “Tulsa is not held back by costly fixed transit infrastructure of the 20th century. Instead, we’re ready to build the infrastructure of the 21st century.”

It describes Tulsa’s transit system as being “solidly in growth mode,” ready to “adapt to shifts in vehicle technology,” and highlights the city’s connection to other major markets, its bike and trail systems, as well as noting that Amazon employees would face less congestion and traffic here than in larger markets.

“We are the beta city for transforming the way people consume,” it said.

The proposal breaks down Amazon’s “needs” in three categories: “Years 1 and 2,” “Years 3 through 5,” and “Years 6 and Beyond.”

During “Years 1 and 2,” the city would lure expatriates back to Tulsa.

“We know we need to grow to meet your long term needs. The good news? Tulsans love coming home,” the proposal claims, saying that thousands of relevantly-trained Oklahomans who had moved away would jump at the chance to return home to work for Amazon.

“Years 3 through 5” would be focused on leveraging “innovative solutions  … to up-skill and train workers,” such as a Coding Dojo that launched last year that spent nearly four months training Tulsans in technology skills, or Tulsa Tech’s Career Tech system. The proposal also states that Tulsa would move to create a “Software Development Engineer Tax Credit” that would be modeled after Oklahoma’s existing Aerospace Engineer Tax Credit. That credit offers aerospace companies up to $12,500 per year per employee in tax credits for each engineer trained and employed for up to five years.

Under that program, each engineer could also claim a $5,000 individual tax credit on their state taxes each year for five years.

It’s unclear how many of the 50,000 jobs Amazon promised would have been eligible for that tax credit, but even if 10 percent of those employees (5,000) were eligible for both tax incentives for the full five years, that would represent nearly $450 million in tax breaks over a five year span.

“Years 6 and Beyond” would be highlighted by education incentives that would theoretically make Tulsa “the vanguard of place-based solutions for transformative social change.” It mentions initiatives to increase education efforts that would reach down to the Pre-K level, training Tulsans essentially from the crib onward for careers in technological fields.

Related reading

‘This is not a test run, this is the Super Bowl:’ As Amazon HQ proposal deadline nears, Tulsa Mayor is shooting for the stars

Your financial support for our investigative journalism is now tax deductible. To become a Friend of The Frontier, click here.

Dylan Goforth

Editor in Chief/Staff Writer

Dylan is a news junkie and QuikTrip addict. He spends too much time on Twitter, but has launched what will be a failed attempt to cut back in 2018. Contact: dylan@readfrontier.com or 918-931-9405.
Donate