: SEATTLE HQ1 MADISON HQ2: CONFIDENTIAL HQ2 MADISON ISTHMUS ISTHMUS TO CONTENTS I. Why the Madison Region II. City of Madison Opportunities for HQ2 III. Site #1 the Capitol East District IV. Site #2 East Metro V. Site #3 UW Research Park 2 VI. City of Fitchburg Site VII. Cottage Grove Site VIII. How the Experts View Madison IX. Supporting Regional Data X. High Quality Airport XI. Education XII. Quality of Life XIII. The Epic Factor XIV. State Incentives Contacts: Paul Jadin Welcome to Madison!Please Madison Region Economic Partnership [email protected] Start Here: (608)571-0401 https://www.youtube.co Dan Kennelly City of Madison m/watch?v=jy1bbgmv8IY [email protected] (608)267-1968 October 16, 2017 Ms. Holly Sullivan Head of WW Economic Development Amazon Office of Economic Development 2121 7th Avenue Seattle, WA 98121 Dear Ms. Sullivan, As Amazon continues to engage North America in the boldest and most transparent site search in US history I would like to congratulate you on the path you have chosen and bring to your attention a region that will fit your business needs like a glove while giving you an opportunity to develop and thrive with the community in all other respects material to your needs. There is little question that, wherever HQ2 lands, the community and region will be forever altered and, while all would enjoy a very positive impact, some regions would `experience incremental change while others would be transformed. I submit that it will be one of those regions that has the potential to be transformed that holds true promise for this extraordinary company because Amazon can grow with that community and help shape that growth in a very positive way. I’m not talking about transformation of a region’s natural or human resources because those things must be spectacular to even be considered. Indeed, it is the opportunity to shape infrastructure, education, supply chain, culture and brand that should appeal to you. And, it is not “Small Town, USA” that should fascinate you but those communities which have heretofore been referred to as “second tier” cities; cities which meet most of your criteria but fall just short on size or some other manageable issue. As the New York Times put it recently, Amazon should land in a community that can “replicate an environment similar to what it had in Seattle at its founding in 1994.” You will see that there is no place on the continent that can better offer that environment and no place on earth that is better poised to transition from “second tier” to star than Madison, Wisconsin. Indeed, it has been nudging its way through the field for more than a decade now by continuously improving its economy and ecosystem in ways that have attracted the attention of critical economic developers, site selectors and pundits throughout the country. And, it has done so without compromising the spectacular assets that, year in and year out, make it one of America’s top places to live. Amazon and its HQ2 can hop on at the ground level of this rapidly evolving economy and play an enormous role in assuring that that evolution continues to be positive, not just for those who are already on board, but for Amazon and everyone else who will discover this star in the near future. 455 Science Drive, Suite 160, Madison, WI, 53711 • 608.571.0420 • madisonregion.org In the following pages and links we will specifically address your preferences, drivers and requests while making it clear that the Madison Region is as close to Seattle circa 1994 as you will find. For instance, Seattle and Madison are the only major cities in the U. S. which are located on an Isthmus. Both communities have a UW with a major footprint in the region through their internationally recognized student bodies, research, education, athletics and alumni. Additionally, like Seattle, Madison has become a hub for STEM businesses and careers. Millennials have been flocking here since before the experts discovered us. Never mind our special connections to Russell Wilson, Dale Chihuly or even Nirvana; you will find in Madison, an accommodating ecosystem, an unparalleled workforce, a quality of life that competes with anywhere, a progressive and pro-business local government, a state that has proven its will and capacity to compete and a Seattle2 in which to build your HQ2. The comparison, however, does not extend to cost. You will find in the following pages that the Madison Region is significantly less expensive, and that talent can be found at lower costs, than what you have experienced in Seattle or what you might find in other communities vying for this incredible project. We offer five sites which, by themselves or in combination, will adequately meet your needs and trust that you will take the time to review each of them along with the evidence for everything I’ve outlined here. Upon doing so you will fully appreciate why you need to be in on “The Ground Level of the Next Big Thing.” Please start here: https://www.youtube.com/watch?v=jy1bbgmv8IY With Sincerest Regards, Paul F. Jadin President Madison Region Economic Partnership 455 Science Dr. Suite 160 Madison, WI 53711 [email protected] (608) 571-0401 455 Science Drive, Suite 160, Madison, WI, 53711 • 608.571.0420 • madisonregion.org HQ2 MADISON WHY THE MADISON REGION Office of the Mayor Paul R. Soglin, Mayor City -C ounty Building, Room 403 210 Martin Luther King, Jr. Boulevard Madison, Wisconsin 53703 (608) 266 - 4611 [email protected] www.cityofmadison.co m Mr. Jeff Bezos Amazon Office of Economic Development c/o Site Manager Golden 2121 7th Ave Seattle, WA 98121 Dear Mr. Bezos, Welcome home. Madison is the best of Seattle but more affordable and far less congested. Madison, Wisconsin is ideally-suited as the location for Amazon’s next great investment - HQ2. I invite you to use your imagination and consider 5 reasons to select Madison: Madison Reason #1: GREAT SITES – As you will see in our proposal, Madison offers Amazon a menu of properties to meet any needs of HQ2.  Capitol East District - Our burgeoning “Capitol East District” creates an opportunity for an urban high-tech campus in an emerging high-tech live/work/play environment. The Capitol East District, connected by sidewalks, bicycles, and buses - and minutes to the airport - would place HQ2 in Madison’s emerging hub for innovation and among dozens of tech businesses. The Capitol East District includes numerous startups as well as established technology companies (including and existing Amazon presence with Shopbop).  East Metro - Madison’s East Metro Site offers unmatched visibility at the intersection of three Interstate Highways. This development-ready greenfield site provides Amazon the opportunity to build a headquarters campus in the City of Madison at one of the most visible and accessible locations in the Midwest. The site is 10 minutes from downtown Madison, 10 minutes from Dane County Airport, and offers direct interstate access to Chicago/O’Hare (2 hours) and Milwaukee/Mitchell Field (1 hour).  University of Wisconsin Research Park II – Located in a natural landscape of rolling hills on Madison’s far west side, the UW Research Park is a large technology park, primed for large-scale office and research development. The site offers Amazon the opportunity for a direct connection to UW Madison’s research and talent pools. The site is 20 minutes from Downtown Madison. Whether it’s a vibrant urban campus among the innovative and eclectic vibe of the Capitol East District, the high visibility and convenient access of the East Metro property, or the research and innovation focus of the UW Research Park, I strongly believe Madison offers a unique mix of development-ready sites to meet Amazon’s needs for HQ2 now and in the future. Madison Reason #2: COMPETITIVE INCENTIVES – Madison will do everything in its power to make HQ2 viable and successful. The City’s primary incentive tool is Tax Increment Financing (TIF). We will ensure that any sites Amazon considers are placed within a TIF District and we will use TIF to the fullest extent possible. We have a proven historic record of success with TIF and will deploy this tool with speed and flexibility. In addition to the City’s effort, the State of Wisconsin will provide a competitive incentive package. A detailed summary of the City’s TIF program is included. Madison Reason #3: ACCESS TO TALENT – With a world class research institution, high growth technology companies, a vibrant tech based entrepreneurial ecosystem, large technology companies including Epic Systems, an existing Amazon presence with Shopbop, Madison has quietly assembled one of the nation’s highest concentrations of technology talent and a workforce well-suited to Amazon’s needs. Beyond Madison’s borders, we are located within a 2-hour drive of Chicago/O’Hare and a 1-hour drive from Milwaukee, providing convenient access to two of the nation’s largest metro areas and two international airports. Madison’s own airport provides direct flights to the Twin Cities, Detroit, Chicago, Washington DC, Atlanta, Denver, Dallas, and others. The airport is growing and the addition of HQ2 to Madison will bring additional service. With Madison’s conveniently-located and easily-accessed airport, combined with our proximity to major international airports, Madison provides the largest array imaginable of domestic and international air service. Although we are a mid-sized city, we have an incredible pool of technology talent, the ability to attract new residents with our renowned quality of life, and Madison is located within a 60-minute drive of 1.2 million people and a 90-minute drive of 3.3 million people. Madison Reason #4: RENOWNED LIVABILITY & PERFECT CULTURAL FIT – Madison is routinely ranked as one of the nation’s most livable communities (see attached list of rankings). This includes being named the best City in America by Livability.com. This stems from our unique natural setting among a collection of glacial lakes, our great neighborhoods, our beautiful and well-maintained parks and bike trails, our low crime rate, our vibrant cultural offerings, the nation’s best and largest farmers market, great restaurants, and the list goes on. Like Seattle, Madison is situated on a narrow isthmus of land between two bodies of water. Like Seattle, Madison is a forward- thinking, innovative, progressive city. Like Seattle, Madison has a growing technology- fueled economy and a world-class research university. Like Seattle, Madison prides itself on its recreational amenities, great food, music venues, eclectic neighborhoods, cultural offerings, and overall livability. In many ways, Madison is a smaller and Midwestern version of Seattle with a culture, economy, and sense of place with many similarities, but in a manageable, affordable, midsized city. Madison Reason #5: WE’RE READY TO GROW WITH YOU – The sites described above and in the pages that follow are “shovel-ready” and primed for this type of development. With our growing economy, Madison has been expecting an opportunity like this. The proposed sites are planned for large-scale employment development and Madison is ready to do what it takes to make this project happen. This includes not only investing in a competitive incentive package, but also making longer term regional investments in transit improvements, increased service to our airport, and any other infrastructure necessary to meet Amazon’s needs. Madison is prepared to grow with Amazon. We will make the investments we need to make to ensure your success. In short, what Madison offers is an economy, talent pool, and urban amenities that are ideally-suited to Amazon’s needs for HQ2, but packaged within an affordable, manageable, and up-and-coming mid-sized city. We offer the best of all worlds and a perfect fit for HQ2. Welcome to Madison! We might not be the place you expected, but Madison and Amazon share a willingness to think differently, re-write the rules, and explore ideas that aren’t obvious at first but make perfect sense after careful consideration. Welcome to HQ2! Sincerely, Mayor Paul R. Soglin Madison, Wisconsin City of Madison Incentives for HQ2 The City of Madison has a robust Tax Increment Financing (TIF) program and a proven track record of creatively, flexibly, and aggressively using incentives to support companies investing in our community. The City of Madison will provide Tax Increment Financing (TIF) to Amazon at any of the sites currently under consideration within our community. Most of the Capitol East District is already located within Tax Increment District #36. We would implement a new TIF District at the former Oscar Mayer site, University Research Park 2, and Metro East sites. The City of Madison calculates its award of TIF support based on the Net Present Value (“NPV”) of new property taxes (“increment”) generated by a project during the period of time that a TIF District is in place. As a City TIF investment is based on property tax revenue, and as Amazon will be constructing multiple buildings over a long period of time, the City would likely provide multiple awards of TIF to each respective building project. The City can provide assistance in the form of a direct investment to the company, paying for infrastructure costs to assist Amazon’s growth, and through subsidizing the cost of land (especially in situations where the City owns the property). 100% of the NPV of the new property taxes generated by a project is roughly equal to 20% of the new assessed value of that project at the time of completion. For example, if a new building is valued at $1 million, it could be expected to generate approximately $200,000 of TIF support that could be used for direct investment to the company or to fund infrastructure costs. The level of direct investment to a company generally provided by the City ranges from 40% to 60% of the NPV of increment. This in turn equals about 7% to 12% of the assessed value of a project at completion, or between $70,000 and $120,000 of the $200,000 noted in the example above. The balance is typically used for other related infrastructure costs. The City will work with Amazon to negotiate a TIF package of direct investment and infrastructure cost support that will best meet the needs of the company. The approval process for award of TIF funding is about three months, culminating in the execution of a TIF Loan Agreement. The City typically disburses these TIF funds in stages through the course of project construction as capital costs are incurred, with final disbursement upon Certificate of Occupancy. The TIF loan is then repaid through the increment during subsequent years (typically less than ten years). A corporate guarantee of repayment is required should the project not generate the anticipated increment in a given year. In addition, the City will require adherence to negotiated job creation/retention goals for the period of five years following issuance of Certificate of Occupancy for each building project. Upon conclusion of the five-year job creation/retention period, and upon conclusion of repayment of the loan (typically less than ten years), the TIF project will be considered complete with no further City requirements. The City’s complete TIF Policy can be found at www.cityofmadison.com/tif. This policy does not contemplate an investment of the scale proposed by Amazon. The City will work with Amazon to utilize TIF to its fullest extent to provide both direct investment to the company and to pay for the companies’ infrastructure needs. As such, although the City’s current TIF standards are a useable guide for planning purposes, we will be more than willing to work with Amazon and the State of Wisconsin to tailor City policies and State Statutes to this unique opportunity.