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The OC Woos Amazon With Legislative Tax Deal for New HQ

Dangling a potential billion-dollar tax break for Amazon, a state Republican lawmaker said Monday he will introduce legislation intended to lure the company’s $5-billion new headquarters to California.

SACRAMENTO, Calif. (CN) – Dangling a potential billion-dollar tax break for Amazon, a state Republican lawmaker said Monday he will introduce legislation intended to lure the company’s $5 billion new headquarters to California.

Assemblyman Bill Brough of Orange County hopes to repair the Golden State’s image as a “non-business friendly state” by enticing the Seattle-based Amazon with 15 years of property tax cuts that could be worth up to a billion dollars. He said the tax package makes it easier for the e-retail giant to build its second headquarters in California, preferably in Orange County.

"I hope this legislation gets the attention of Amazon's CEO Jeff Bezos and gives Gov. Jerry Brown more leverage to finalize a deal," Brough said in a statement.

Amazon announced plans to build a second headquarters in September, setting off a bidding war among North American cities. It claims the new campus or “HQ2” will create 50,000 high-paying jobs with average annual salaries over $100,000.

The company is looking for a metro area with more than 1 million people, a “stable and business-friendly environment,” and close access to airports and major highways. The new campus would be closely modeled but “fully equal” to its existing 8.1 million-square-foot downtown Seattle location. Amazon estimates its Seattle headquarters has generated $38 billion for Seattle’s economy since 2010.

“Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home,” Bezos said of the plan in a statement.

City officials are eagerly floating tax subsidies toward Amazon in hopes they’ll land the deal.

The tech giant claims it received 238 bids from North American cities and regions ahead of the Oct. 19 deadline. Cities including Toronto, Chicago, New York City, Atlanta, St. Louis, Boston and San Diego are vying to become Amazon’s second home.

Toronto Mayor John Tory painted the competition as “the Olympics of bidding,” while New Jersey Gov. Chris Christie is pushing up to $7 billion in tax subsidies to woo Bezos to the Garden State. On Monday, Chicago detailed 10 possible locations for the campus along with an estimated $2 billion in tax breaks.

The company is expected to announce its selection in early 2018.

Moody’s Investors Service has pegged Atlanta, Philadelphia and Austin, Texas, as the top candidates, with no California cities in its top 10 rankings.

Brough says his proposal will revive the “Capital Investment Incentive Program” that provides property tax abatement for up to 15 consecutive years. He says if Amazon selects Orange County, it would qualify for hiring credits equal to 17 percent of wages paid to full time employees.

"California must always remember that in today's global economy, location is not permanent, but is a choice. The intent of this legislative package is to make that choice easier for Amazon to locate their business, suppliers, contracts, and product investments here in Orange County," Brough said.

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