APPENDIX C

ADDITIONAL INCENTIVES

M O N TG O M E RY CO U N T Y, M A RY L A N D
 ADDITIONAL INCENTIVES

Privileged
Privileged and Confidential
and Confidential

TO: TO: Montgomery

Montgomery County
County Department
Department of Economic
of Economic Development
Development

FROM:
FROM: Maryland
Maryland Department
Department of Commerce
of Commerce

DATE:DATE: October
October 6, 2017
6, 2017

SUBJECT: State State

SUBJECT: Incentives—Amazon
Incentives—Amazon HQ2—Montgomery
HQ2—Montgomery County
County

This memo
This memo and accompanying
and accompanying attachments
attachments are provided
are provided in support
in support of proposal
of your your proposal for Amazon’s
for Amazon’s HQ2 HQ2
project. The following sections note support that is anticipated to be made available by the State for for
project. The following sections note support that is anticipated to be made available by the State
business
business incentives
incentives and transportation
and transportation infrastructure,
infrastructure, should should yourbe
your site site be selected
selected forheadquarters
for the the headquarters
project.
project.

WhereWhere needed,
needed, it isGovernor’s
it is the the Governor’s intention
intention to necessary
to seek seek necessary legislative
legislative approvals
approvals for extension
for extension of anyof any
sunset
sunset provisions
provisions on existing
on existing programs
programs in addition
in addition to approval
to approval forAmazon-specific
for the the Amazon-specific incentives.
incentives.

Existing
Existing Tax Incentive
Tax Incentive Programs
Programs
The State will seek extension of theoffollowing
The State will seek extension the following existing
existing business
business incentive
incentive programs:
programs:
Job Creation Tax Credit: Existing program incentivizing newly created
Job Creation Tax Credit: Existing program incentivizing newly created positions. positions.
R&D Tax Credit: The amount of this tax credit is driven by actual
R&D Tax Credit: The amount of this tax credit is driven by actual R&D spend. R&D spend.

New Amazon-specific
New Amazon-specific Incentive
Incentive ProgramsPrograms
“MJM“MJMPrime” Prime”
–The –The
State State will pursue
will pursue an amendment
an amendment to thetoMore
the More
Jobs forJobs for Marylanders
Marylanders Act ofAct of
2017 2017 (“MJM”)
(“MJM”) to extend
to extend the existing
the existing ten-year
ten-year 5.75%5.75%
income income tax credit
tax credit to eachto new
eachqualifying
new qualifying
AmazonAmazon headquarters
headquarters job upjob toupthetoprojected
the projected total
total of of 50,000
50,000 jobs. jobs.
BasedBasedon theonAmazon-
the Amazon-
projected
projected averageaverage
salarysalary of $100,000
of $100,000 perthis
per job, job,credit
this credit
wouldwould be worth,
be worth, on average,
on average, $57,500
$57,500
per job over the course of a ten-year period, totaling $2.875 billion. In addition, the State wouldwould
per job over the course of a ten-year period, totaling $2.875 billion. In addition, the State
seek
seek to to extend
extend the existing
the existing MJM MJM Sales Sales andTax
and Use UseExemption
Tax Exemption on eligible
on eligible project project
costs costs
to theto the
HQ2 Project.
HQ2 Project. BasedBased on information
on information supplied
supplied in theinRFP,
the this
RFP,benefit
this benefit is valued
is valued at up at
toup to $230
$230
million.
million. The benefits
The benefits affordedafforded by these
by these amendments
amendments wouldwould
requirerequire
Amazon Amazon to meet
to meet or or
maintain
maintain certaincertain requirements,
requirements, such assuch
an as an average
average annual annual
salarysalary of $100,000.
of $100,000.
“Sunny“Sunny
Day” Day” – A conditional
– A conditional loan would
loan would be funded
be funded underunder the Economic
the Economic Development
Development
Opportunities
Opportunities Fund Fund
(Sunny (Sunny
Day) at Day) at aof
a rate rate
$10ofmillion/year
$10 million/year
for 15for 15 years
years ($150($150 million
million
total).total). The would
The loan loan would be forgiven
be forgiven upon upon the achievement
the achievement of defined
of defined job creation
job creation and capital
and capital
spending performance requirements to be determined based
spending performance requirements to be determined based on the project. Claw-back on the project. Claw-back
provisions
provisions wouldwould
applyapply
if the ifdefined
the defined performance
performance criteria
criteria are notaremet.
not met.

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 ADDITIONAL INCENTIVES

Transportation Infrastructure
The Maryland Department of Transportation has analyzed the potential transportation impacts of
50,000 new jobs at the proposed site. This analysis has identified several roadway and transit projects
that would improve the transportation capacity necessary to accommodate Amazon’s workforce. A list
of these projects is found on the accompanying spreadsheet. Cost estimates for some of these projects
have not been made and will require further study. Should the Montgomery County site be selected,
the State of Maryland will work with the County and Amazon to develop and prioritize transportation
solutions.

The project site would benefit from already announced transportation projects in the region,

Finally, there are ancillary benefits to the project that would be made available from other State
agencies. As examples, the Maryland Department of Housing and Community Development offers a
homebuyers’ assistance program that Amazon employees could take advantage of, and the Maryland
Energy Administration offers energy efficiency grants and loans that Amazon could use to offset
operational costs.

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 ADDITIONAL INCENTIVES

STATE TRANSPORTATION PROJECTS

SITE
State Transportation Projects - White Flint site
Planned Improvements
I-495/Capital Beltway Capacity Traffic Relief Plan
I-270/Capital Beltway Capacity Traffic Relief Plan
I-270 ICM

Additional Roadway Improvement Needs

Local Access Improvements - High

Transit Improvements
Local Bus - RideOn
WMATA Bus
MontCo Transit priorities
BRT, Metro expansions

POTENTIAL STATE BUSINESS INCENTIVES

AND TRANSPORTATION SUPPORT

Amazon HQ2
Potential Business Incentives and Transportation Support
Montgomery County

State Support $ in Millions

MJM Prime 2,875
Sales & Use Tax Exemption 231
Job Creation Tax Credit 17
Research & Development Tax Credit 51
Sunny Day/MEDAAF Forgivable Loan 150
Total 3,324

Local Support
Montgomery County

Grand Total 3,324

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 ADDITIONAL INCENTIVES

AVAILABLE TO AMAZON FROM MC AND MD

PERMITTING/DEVELOPMENT INCENTIVES INFRASTRUCTURE INCENTIVES

• Designation as a County Strategic Economic • Montgomery County FareShare Transit Program
Development Project, which entitles Amazon matches the commuting benefits offered by an
to green-taped processes and priority for all employer, up to $50/employee/month.
development reviews, permits and approvals. • Council of Governments Guaranteed Ride Home
• No local area transportation review and no program provides free rides home in cases of
requirement for local area traffic studies which emergency or unscheduled overtime to those
streamlines development approval processing workers who typically use transit.
and saves costs. • Montgomery County Commercial PACE Financing
• Proactive case management to assure efficient is a program whereby commercial property
submissions and processing of permits. A owners can finance energy-saving upgrades
dedicated team from the County’s Department through a property tax surcharge that is repaid
of Permitting Services will hold regular design over the life of the upgrade (potentially financing
consultations and progress meetings at no extra up to 100% of the cost for up to 20 years).
charge. All permits will be handled by a dedicated • Montgomery County Fuel Energy Tax Exemption
team to assure efficiency and consistency of reviews. for Onsite Clean Energy encourages the use
• Permits and plans will be submitted, reviewed and of electricity generated through on-site solar
processed electronically. In addition to saving time, installation by exempting this energy from the
money and reducing our carbon footprint, owners, County’s Fuel Energy Tax.
applicants and Amazon’s design team can view • Rainscapes Rewards provides County rebates
permit/plan status on-line. up to $10,000 for commercial property owners
WORKFORCE DEVELOPMENT INCENTIVES installing rain gardens and other projects to help
• EARN Maryland is a state-funded, competitive control stormwater pollution. Property owners
workforce development grant program that is are also eligible for on-going credits against their
industry-led and a proven strategy for helping Water Quality Protection Charge.
businesses cultivate the skilled workforce they
INCENTIVES FOR AMAZON EMPLOYEES
need to compete. More than 3,500 incumbent
• The University of Maryland System has approved
workers have been trained; $3 million dedicated
waiving the twelve-month residency requirement
to cyber/IT training in 2017.
for employees of Amazon, their spouses, and
• Maryland Business Works is a dollar-for-dollar dependent children, making them immediately
match for Maryland’s businesses who invest in eligible for in-state admission and tuition benefits.
increasing the skills of their incumbent workers.
• The State of Maryland offers electric vehicle owners
Sixty-three companies are participating in
(and lessees) up to a $3,000 tax credit.
this program, resulting in the retention of 364
• Maryland residents are eligible for multiple
incumbent workers.
financial incentives to help them reduce their
• Maryland Hire Our Veterans Tax Credit provides a
energy use, including $250 in energy efficiency
maximum of $1,800 per qualified veteran employee..
tax credits.
• Maryland Disability Employment Tax Credit allows
• Montgomery County offers free assistance to
employers to claim a tax credit for up to $1,800
help members of the County’s labor force form
for employees with disabilities hired on or after
or join vanpools or carpools, provides car sharing
December 31, 2014.
programs that provide 24/7 access to a shared
• Registered Apprenticeship Tax Credit provide vehicle and provides accessible transportation for
for a $1,000 credit for each eligible registered those with special needs.
apprentice.

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 ADDITIONAL INCENTIVES

ROADWAY AND TRANSIT PROJECTS

In addition to the HQ2 incentives listed in the •

proposal, the Maryland Department of Transportation
and Montgomery County have identified several
roadway and transit projects that will increase
capacity for Amazon’s employees. We will prioritize
these tasks if Amazon chooses Montgomery County
for the HQ2.

PEDESTRIAN IMPROVEMENTS
ROADWAY IMPROVEMENTS
•
•

•
•

•
•

• District Streetlighting Installation of standardized

•
pedestrian-scaled and roadway lighting
throughout on public streets in

• District Intersection Design Modifications

Improvements to intersections such as installation
of accessible pedestrian signals, slip-lane
•
elimination, upgraded crosswalk treatments
beyond those described in other projects.

BICYCLE IMPROVEMENTS
• •

M O N TG O M E RY CO U N T Y, M A RY L A N D
 ADDITIONAL INCENTIVES

ROADWAY AND TRANSIT PROJECTS

• •

PUBLIC TRANSIT
•

•
•

PARKING
•

•
•

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 ADDITIONAL INCENTIVES

E M P L OY E R S E R V I C E S A N D C O M M U T I N G O P T I O N S

• Perks, Incentives, and Transit Amenities The

works with employers to show them how to
take advantage of these.

• Carpools/Vanpools Free assistance to employees

in forming or joining vanpools or carpools. Commuter
Services and the are the local representatives
Services include free transportation information
for the Metropolitan Washington Council of
and outreach available to employers, employees,
Governments’ Commuter Connections program,
residents and visitors in
providing access to a region-wide database to help
people find carpool/vanpool partners.

• Parking Information for employers on how to

reduce the cost of parking for their employees.
Information for employees on free or discounted
parking for carpools/vanpools and on transit/
provides the following FREE services to help
pooling options using Park and-Ride lots located
employers promote alternative transportation to
throughout the County and region.
employees:
• Biking/Walking Help with provision of bike
• Transportation Benefits Plans Employers are
parking, bike lockers and other ways to promote
assisted in designing commuting benefits plans
use of bike commuting, bike/walk infrastructure,
for their employees, enabling employees to
safe biking/walking routes.
reduce the stress of commuting and make better
use of their time, while also boosting productivity • Bikesharing Commuter Services and the work
and morale. with local employers to provide bikeshare stations
in new locations and to offer programs that reduce
• Transit/Vanpool Subsidies and Tax Credits
the cost of bikeshare for their employees. Bikeshare
The TMD shows employers how commuting
can be especially important as a way to connect
benefits programs can reduce taxes for both
employees with transit – that “first-mile/last-mile”
employers and employees.
connection that facilitates transit use.
- FareShare Transit & Vanpool Matching
Program: Employers can provide up to $255 • Guaranteed Ride Home This is the Council
to help pay employee transit or vanpool of Governments’ regional program providing
commuting costs tax free, saving money free rides home in cases of emergency or
for employers and employees. Through its unscheduled overtime. The helps get
FareShare program Montgomery County employees registered for GRH and also works
Commuter Services matches the commuting with employers interested in enhancing this type
benefits offered by an employer, up to $50/ of program for their employees. GRH programs
employee/month. enable those using transit or pooling to get
where they need to go in an emergency.
• Public Transportation Information on routes,
fares, schedules, and where to buy transit passes. • Teleworking/Alternative Work Schedules
Personalized assistance in planning commuting Through the , Commuter Services provides
routes via transit. employers with free access to nationally-
recognized telework consultants to help them
design a telework program tailored to their

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 ADDITIONAL INCENTIVES

E M P L OY E R S E R V I C E S A N D C O M M U T I N G O P T I O N S

businesses’ needs. Free professional training GETTING AROUND

for managers and employees to help increase
Ride On Bus, Metrobus, Metrorail and Express Bus
telework success is also available.
Services are available to employees, residents and

• Car Sharing Programs that provide 24/7 access visitors of the Montgomery County area.

to a shared vehicle, available at Metro stations • Ride On Bus is operated by the Montgomery
and through the County’s on-street car sharing County Government and serves the Montgomery
parking program, as well as in a number of other County area.
publicly-accessible locations.
• Metrobus and Metrorail are operated by the
• Accessible Transportation Freedom of mobility Washington Metropolitan Area Transit Authority
for those with special needs. The Department of (WMATA) and provides service throughout
Transportation, Division of Transit Services, offers Maryland, Virginia and the District of Columbia.
assistance through its Special Transportation Section.
Local Bus Routes
• Customized Seminars and Presentations The
•
is always available to employers to set up special
presentations related to commuting options, benefits
programs, or other transportation-related issues.
- Employee Relocation Seminars Montgomery •
County Commuter Services and their staff
are available to meet with employees prior to a
business’s move. These seminars can help reduce -
employee anxiety by addressing their concerns
regarding their new commutes in advance.
Personalized information on transportation
options can be provided for employees affected
by the move.

• Commuter Information Fact sheets, posters, •

flyers, exhibits, benefits fairs.

• Mobile Commuter Store Montgomery County

Commuter Services operates a full-service Mobile •
Commuter Store that circulates to key areas
around the County, including . The
MCS provides SmarTrip cards, SmarTrip reloading,
passes of all types, MARC Commuter Rail tickets,
•
bikeshare registration and key fobs, and transit-
related information.
• TRiPS Commuter Store Located in the Silver
Spring Transit Center, TRiPS is also a one-stop
shop for all things transit and commuting.
TRiPS is an acronym for “Transportation,
Information and Places to See” and includes
information on destinations and events around
the County and region.

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 ADDITIONAL INCENTIVES

E M P L OY E R S E R V I C E S A N D C O M M U T I N G O P T I O N S

• Ride on extRa Limited Stop Service Bikeshare

High Occupancy Vehicle (HOV) Lanes

Local Bus Routes
• The State of Maryland has two HOV facilities, along
•
I-270 in Montgomery County and along US 50 in
Prince George’s County.

Commuter Buses

Bicycling

• Montgomery County is investing in in low stress

bike networks and in improvements to bicycle
facilities and infrastructure throughout the county.

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