- A new report suggests the economic impact of Amazon’s HQ2 could be larger than anyone previously thought.
- The report was compiled by Sage Policy Group and commissioned by Montgomery County and the Maryland Department of Commerce.
- Maryland’s Montgomery County was named to Amazon’s short list of HQ2 contenders and is seen as something of a frontrunner in part because of its proximity to Washington, DC.
- The report bodes well for localities looking to up the ante in the fight for HQ2.
Amazon’s second headquarters could bring big benefits to its chosen location.
A new study by the Baltimore-based Sage Policy Group predicts that the total impact of Amazon coming to town would be $17 billion in economic benefit per year for the state of Maryland, if it were to be chosen for HQ2.
That includes $7.7 billion in new wages for the state to add to its tax roll, plus 101,000 new jobs. All of these potential benefits would be ongoing once the company’s new headquarters is fully established, according to the study.
It was commissioned by Montgomery County and the Maryland Department of Commerce and is based on projections for when the new headquarters is fully operational.
“Amazon’s HQ2 is the greatest economic development opportunity in a generation, and this study confirms just how transformative this project could be for Maryland,” Maryland Governor Larry Hogan said in a statement.
He added: “From the construction phase, to when the headquarters is fully operational, Maryland would reap unprecedented benefits. We are fully committed to bringing this project home, and we look forward to continuing to work closely with Montgomery County to show Amazon that Maryland is truly Open for Business.”
According to projections in the Sage Policy Group study, the new jobs would add $280 million in additional county tax revenue every year for Montgomery County, while the state would receive $483 million in new tax revenue.
Amazon said in its call for proposals that the HQ2 project would be a $5 billion investment over 10 years and offer 50,000 new jobs to the local economy.
The 101,000 new-jobs figure from Sage’s study assumes that the headquarters would provide secondary benefits not included in Amazon’s initial hiring plan. The study used a model that accounts for these indirect impacts, which could include Amazon employees spending their money at local businesses.
The report also measures the impact of the headquarters’ construction, which could bring 50,000 jobs and $3 billion in wages on its own. Additionally, it would mean $7.4 billion in other business-related sales in the state. Taken on its own, this phase of HQ2 would add a one-time tax revenue bonus of $110 million for the county, and almost $190 million for the state.
A release by the state notes the study says the project will have “spin-off benefits” for Maryland, including an increase in entrepreneurship in the state, more trade activity in the port of Baltimore, and more international travel through BWI Thurgood Marshall Airport.
Montgomery County is one of three Washington, DC-area locales being considered for Amazon’s HQ2. The other two are Northern Virginia and DC itself.
There have been more than a few hints that Amazon – which last month released a short list of 20 cities it’s considering for HQ2 – is leaning toward putting its second headquarters somewhere in the DC metro area.
Amazon has recently ramped up its lobbying efforts in DC, and its CEO, Jeff Bezos, already has an enormous house there, fit for holding parties and receptions of all kinds. Bezos splits his time between Amazon and The Washington Post, The New York Times reported in a recent profile.
Amazon has said it plans to bring 50,000 jobs to the city it chooses for HQ2 and a total of $5 billion in investments in the local economy over a decade.