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Newark finalizes $2 billion in local incentives for Amazon

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Newark is one of 20 finalists in the running to land Amazon's HQ2.
Newark is one of 20 finalists in the running to land Amazon's HQ2. - ()

The Newark City Council approved two ordinances Wednesday that authorize the offering of $2 billion in economic incentives to Amazon aimed at bringing the e-commerce giant’s second North American headquarters to the city.

Together, both ordinances would allow a company that sets up a headquarters to apply for tax breaks and long-term exemptions if it invests $3 billion over 20 years and create at least 20,000 jobs.

Although none of the ordinances name Amazon, the retailer would be one of the few companies to whom the law would apply. The company has promised upward of 50,000 jobs with an average salary of $100,000.

Newark is one of 20 finalists to land the coveted HQ2. The state has put an additional $5 billion in tax credits on the table.

“The City Council has brought Newark a giant step closer to being Amazon’s choice for HQ2 with final passage of these ordinances,” Mayor Ras Baraka said in a prepared statement. “The creation of 12,500 jobs for Newark residents, the added revenue to Newark families plus the added revenue to the city of Newark, Newark Public Schools and Newark Public Library will make HQ2 a game-changer in the transformation of our city.”

The first ordinance approved by the council waives completely a 1 percent payroll tax for Amazon employees who live in Newark; those who reside outside the city would receive a 50 percent break. That exemption would be capped at $1 billion.

The second ordinance allows companies such as Amazon to qualify for a 30-year tax exemption of up to $1 billion.

A third ordinance also approved by council calls for the establishment of a select committee  that would enable companies like Amazon to fast-track the city’s planning and zoning process.

“Basically the idea is to expedite the planning process so that Amazon wouldn’t get bogged down in bureaucracy,” said city spokesperson Frank Baraff.

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Daniel J. Munoz

Daniel J. Munoz

Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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