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Pennsylvania Was Prepared To Offer Amazon More Than $4B

Elaine Thompson
Amazon announced today that it will split its second headquarters between two cities that are not Pittsburgh.

Pittsburgh will not be home to Amazon’s second headquarters, nor its third. On Tuesday, the company announced its plans to split HQ2 between two locations: Long Island City, in Queens, New York, and Crystal City, just outside Washington, D.C.

But when Pittsburgh, Philadelphia and the Lehigh Valley threw their hats into the North American bidding race last September, the state of Pennsylvania offered all competing municipalities the same deal: a 25-year grant program expected to generate over $4.6 billion for Amazon.

The amount of the award each year would be equal to all of the new Amazon employees’ state income tax withholdings, and would be sent back to Amazon. In addition, the state would have invested $100 million in transportation infrastructure.

Governor Tom Wolf and the Department of Community and Economic Development wrote in a letter to Amazon that it was recommending immediate legislative action.

A spokesperson for the department wrote in an email that the proposed incentives would have been subject to “a full public vetting process prior to being enacted.”

More than 200 North American municipalities proposed to host Amazon. That Pittsburgh—an older, mid-sized Rust Belt city—even made it onto the 20-city shortlist announced last January is amazing, said Allegheny County executive Rich Fitzgerald.

“There’s certain things we’re not going to be,” he said. “If you want to be in the nation’s capital, that’s something that Pittsburgh can’t compete with. The nation’s largest city with what New York City has to offer. We’re not New York City, nor do we want to be.”

Competing for Amazon’s HQ2 gave Pittsburgh a ton of free publicity, said Fitzgerald, and helped the region identify its strengths and weaknesses. Mayor Bill Peduto agreed.

“It’s given [us] the ability also to use this same information to try to bring other companies. Or to help to build homegrown companies here.”

Members of the city’s tech community added that Amazon’s rejection says very little about Pittsburgh’s future.

Barrie Athol is the CEO of Ascender, which operates a startup incubator for several tech companies. He said it would have been good overall for Pittsburgh to land HQ2, but adds the city’s success is not dependent on one industry or company.

“Google is continuing to grow here. Facebook’s continuing to grow here. Robotics companies are moving here. We’re creating our own new companies with entrepreneurs and startups. Innovation continues to grow. Research continues to grow here,” he said. “We’re a thriving economy, one of the strengths of that economy, though, is its diversity.”

Audrey Russo, CEO of the Pittsburgh Tech Council, said it’s not surprising the company selected locations near major airports. She said Amazon going elsewhere is probably for the best.

“Do I think it’s wise to have one company come in and have that kind of presence in a city our size? Probably not.”

Responses from Pittsburgh’s academic community were similarly mixed.

Annie Hsieh, an assistant professor at Carnegie Mellon University’s School of Music, says her partner works for Amazon. However, they were concerned that the fabric of the city would be changed and people would be displaced if the company moved to Pittsburgh.

“For me personally, it’s a bit of a relief,” Hsieh said. “Knowing that the way the city is, and how the people are, will get better by themselves on their own terms.”

The New York and Virginia headquarters are each expected to see 25,000 new jobs and $2.5 billion in investment.

Some Pittsburgh nonprofits view the region’s loss of HQ2 as a win.

Chris Sandvig, director of policy for the Pittsburgh Community Reinvestment Group, said he’s not sure Pittsburgh was ready to absorb the demands that 50,000 new employees, their children, and their commutes would place on the region.

“Overall, I think this could be better for us in the long run. Pittsburgh is very good at putting together lots of organic small-, medium-sized things that become big things and make us very resilient,” he said. “Something like this would have been a big slug to the system.”

Amazon’s search for a second home kickstarted a wooing process fueled largely with public dollars. Many Pittsburgh residents have criticized officials’ refusal to share the region’s proposal. People can take this moment to call for more transparency, said Laura Wiens, executive director of Pittsburghers for Public Transit.

“Look, residents should be asked what problems that they need prioritized, and maybe it’s housing and transit, maybe it’s clean water or education funding,” she said. “Above all, they should have the ability to determine where our shared resources should be allocated.”

Both Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald said they expect to release the region’s bid for Amazon on Thursday. However, Pittsburgh signed nondisclosure agreements with both the state and private property owners; it’s not clear how much of that information will be included in a release. The fate of several right to know requests moving through the courts is also unclear.