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Amazon still discussing terms over $4.5 million grant award

May 25, 2021 GMT

DOVER, Del. (AP) — State officials awarded $4.5 million in taxpayer money to online retail giant Amazon Inc. last year to build and staff a distribution facility in Delaware, but the company apparently is still not satisfied.

Members of a panel that approves incentives for economic development projects were told by state officials Monday that the deadline for dispersing the Amazon grant money expired months ago, and that the company is still negotiating terms with the state.

“I’m just curious as to what’s taking so long,” said Tarik Haskins, a member of the Council on Development Finance. “Is Amazon just negotiating hard and they want various terms or things that we don’t typically live with?”

The response from Lawrence Lewis, a deputy attorney general assigned to the council, was vague.

“This required policy considerations in terms of contract terms on both sides that needed to be elevated to the highest levels because of some complicated clauses,” Lewis said. He offered no details.

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Members of the council then voted to give Amazon until Aug. 1 to negotiate a final deal.

Under Delaware’s administrative code, all money committed for a project from the Delaware Strategic Fund must be completely dispersed within one year of final approval, although the Delaware Economic Development Authority has discretion to extend the deadline. State officials must issue a term letter to the applicant outlining the terms and conditions of the final grant approval. A closing is scheduled and the money made available after the applicant accepts and returns the term letter along with any required fees and documentation.

The council approved the $4.5 million grant for Amazon in February 2020, meaning the one-year deadline expired three months ago.

“As long as the council views the project as still viable and still vital to economic development, then there’s no real problem,” Lewis told panel members on Monday. “This has happened a few times in the past.”

The grant funding was recommended by the Delaware Prosperity Partnership, a “public-private” entity that was incorporated by Democratic Gov. John Carney to lead Delaware’s economic development efforts but which is privately run and not subject to Delaware’s Freedom of Information Act.

“Delaware Prosperity Partnership continues to be very pleased with Amazon’s investment in Delaware, bringing new jobs to Delaware and capital investment as well,” spokeswoman Susan Coulby said in an email Tuesday when asked about the delay.

Emails to Amazon’s public relations department on Monday and Tuesday went unanswered.

Michael Chesney, a spokesman for the state Division of Small Business, which oversees the Delaware Economic Development Authority, said the authority could not comment on ongoing contract negotiations. Carney, through a spokesman, also declined to comment, with the spokesman referring questions to the Division of Small Business.

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The Council on Development Finance approved millions of state taxpayer dollars to Amazon in a year in which the company reported record income and profit. Amazon saw net revenue increase 38% last year to $386.1 billion and reported net income of $21.3 billion, almost double the $11.6 billion in profit it reported in 2019.

The grant was awarded after a Nevada-based commercial development company that has worked with Amazon in the past applied to build a five-story, 3.8 million-square-foot facility in Newport at the site of a former General Motors assembly plant that was shuttered in 2009.

Amazon said in its grant application that it planned to spend $50 million for new equipment and machinery, including $48.5 million in equity. The remaining $1.5 million would come from the Strategic Fund grant, which also included a $3 million “performance grant” for Amazon’s promise to create 1,000 full-time jobs over three years. State officials were told a site launch was projected between the third quarter of this year and the third quarter of 2022.