Amazon HQ2 looks for home: Buda, Kyle included in bid for next big development

The great waiting game is on for Buda, Kyle, Austin and 235 other cities as they wait to see if Amazon selects their town for its proposed second headquarters.

Earlier this week, cities across the country submitted bids for Amazon’s HQ2, which, according to Amazon, will bring 50,000 jobs with salaries averaging $100,000. Amazon also expects to invest $5 billion to the area they choose.

The Greater Austin Chamber of Commerce submitted its proposal, which harbored an estimated 40 locations on behalf of the region. Locations included areas in Williamson, Hays and Travis counties, said Diane Blank-Torres, director of Economic Development for the city of Kyle.

Roughly 100 acres in the Plum Creek area in Kyle was submitted as a possible location, said Kim Hilsenbeck, Kyle communications specialist, in an emailed response. A total tax incentive is estimated at $242 million over 15 years, Hilsenbeck said.

Ann Miller, Buda Economic Development Corporation, said Buda submitted one potential location in the Sunfield Municipal Utility District, and a parcel of land north of the city’s limits.

Miller said she was not willing to disclose the tax package the city pledged in the bid because of the competition amongst the cities. 

“(Other cities) they might out price us, if we bid too low, if we bid too high,” Miller said.

Tax incentives are part of what Amazon highlighted in its list of criteria for potential selection. Other primary factors in Amazon’s proposal include a city with more than 1 million people, an international airport, a mass transit system and a solid business climate, according to a CNBC report.

The large tax breaks granted by Texas to businesses was cited as a factor in determining if the Austin area is the best place, according to Moody Analytics. 

In a 2012 New York Times study, Texas spent an estimated 19.1 billion dollars in tax incentives, topping all other states. 

“The project produces potential major returns for the taxing jurisdictions, even after any incentives would be reconciled,” Mike Berman, spokesperson for the Austin Greater Chamber of Commerce, said.

Miller said the public nature of Amazon’s announcement and bidding process gives Amazon a huge advantage.

She said one potential issue is community’s might offer tax money that is higher than the project’s actual worth.

“It really makes cities fight against each other more visibly than would normally happen.”

Miller said one positive is that the region works together fairly regularly on regional bids.

Blank-Torres agreed, and said that if Amazon were to select the region, it would be a win-win for all. 

“Of course, we want it here (Kyle), but we want what’s best for the whole region,” Blank-Torres said.

However, one weak point in the Austin regional bid is the lack of mass transportation.

Miller said an advantage of not having a mass transit system in place is that a system can be built tailored to the needs of Amazon.

“If that’s ever going to be a window for conversation about something like a commuter rail, this (HQ2) would be the perfect opportunity for that,” Blank-Torres said.

With calls coming from city council members and community leaders to make a great bid, Miller said there is a lot of pressure to have the very best bid that would convince Amazon to choose Buda.

Could Buda and Kyle stand to benefit from HQ2, if it were to be selected?

While there would be the actual project costs, as well as the need to bolster infrastructure and the workforce, HQ2 could offer a net benefit to Buda, Miller said.

Miller also estimates an additional $201 million in tax revenue over 10 years for Hays CISD.

However, the odds are also rather long for both cities.

Of the countless bids the Buda EDC submits, roughly 80 percent end up do not come to pan out, Miller said.

For this very public, high gains bid, she’s taking the pressure off by managing expectations in the community.

“It’s a long shot,” she said. “But if Buda was to win, we would do everything in our power to accommodate.”

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