Puerto Rico Gov’t Makes Pitch for Amazon headquarters
SAN JUAN – The extension of Route 66 to the former Roosevelt Roads Naval Station in Ceiba, tax rates as low as 4%, no federal taxes, a conceptual design for its facilities and a description of what employees’ lifestyle could be were just some of the attractions Puerto Rico highlighted in its proposal to convince e-commerce giant Amazon to build its second headquarters on the island.
Puerto Rico Economic Development Secretary Manuel Laboy spoke with Caribbean Business about his proposal to Amazon despite the existence of a confidentiality agreement imposed by the firm. Although Puerto Rico was hit by Hurricane Maria on Sept. 20, after a month, much of its infrastructure is still down. Laboy, however, is confident that by the time Amazon makes a decision, the island will be fully recovered. Puerto Rico is competing with some 238 cities.
“Once it is decided, there will be a period of negotiation, so the island will have recovered,” he said.
Amazon submitted several requisites, but the proposal also asked participants to offer alternatives if they weren’t able to meet requirements.
These include the headquarters belonging to a Metropolitan Statistical Area, or MSA, of at least one million inhabitants. Roosevelt Roads, the proposed location for the new headquarters, belongs to the San Juan, Carolina and Caguas MSA, which includes Fajardo and Ceiba, and has a population of 2.2 million.
Roosevelt Roads was suggested because one of Amazon’s requirements is for the area to provide for expansion in the next 10 years since the firm has also talked about being able to found a university.
“We even sent them a conceptual design of how could their campus could be. We offered a lifestyle that includes Vieques and a bioluminescent bay. We told them they can make their dreams come true…. It’s a unique offer,” Laboy said.
The technology giant also requested its headquarters be within 45 minutes of an international airport. When Caribbean Business told Laboy that Roosevelt Roads is more than an hour from Luis Muñoz Marín International Airport in Carolina, Laboy said Amazon was told that to send and receive cargo, Roosevelt Roads could be used and Muñoz Marín Airport could be used for passengers. “We’re in that range, and [the two airports] are just 45 minutes to an hour apart,” he said.
Another requirement imposed by Amazon is for its headquarters to have access to a mass transit system. For this requirement, Puerto Rico told Amazon that if the island were to become the home for the company’s second headquarters, the government would extend Route 66 to Ceiba, create access between PR-3 and Ceiba or establish a mass transit system between Carolina and Ceiba, all through public-private alliances.
Laboy said Puerto Rico also meets requirements to have professionals with high-tech knowledge. Every year, a large number of students graduate from local private and public universities specializing in engineering. He emphasized that University of Puerto Rico’s Mayagüez campus is one of the most prestigious engineering universities in the world.
However, other jurisdictions have also offered attractive packages. New Jersey would provide Amazon incentives of more than $7 billion. Atlanta has offered to create a town for the company called Amazon by using 354 acres of its industrial land.
Laboy said New Jersey pays federal taxes while in Puerto Rico there are no such taxes. “We are offering them the incentives of both Act 73 of 2008, the Industrial Incentives Act, and Act 20 of 2012, the Export Services Act,” he noted. Those offers imply that Amazon would pay 4% tax on profits.
“We already have companies like Amgen, Lufthansa and Honeywell that decided to come here,” he added.