Records show how Greater MSP took control of state’s Amazon bid

By Mike Kaszuba

State officials allowed Greater MSP – a business development non-profit with ties to Minnesota’s top companies – to assume a uniquely dominant role in the unsuccessful bid to land Amazon’s second corporate headquarters, according to new documents reviewed by Public Record Media (PRM).

Records released by the Minnesota Department of Employment and Economic Development (DEED) show that Greater MSP – which has continued to keep the state’s overall bid secret – almost immediately took control of the bid process when Amazon unveiled a national competition for the project last September. The records also describe how state officials closely examined a non-disclosure agreement sought by Amazon.

City official told that bid was not viewable

The unusual agreement with Greater MSP generated awkward moments at times.  The documents showed that in at least one instance, a representative from Greater MSP told a public official that the bid his city had submitted for the Amazon project might not be viewable – even by the city itself.

“Do you guys need anything from us on Amazon?” Schane Rudlang, the Bloomington Port Authority administrator, wrote in an October 13 e-mail.  “I think you said a final draft was going to be done on Oct. 16.  Will we be reviewing that?”

David Griggs, a Greater MSP official, responded: “I am not sure how we will be handling that as we have been asked by the client [Amazon] to keep the proposal confidential.  However, I understand your want to see what was, in the end, submitted on your behalf.  Give us a bit of time to sort out a way to accomplish this in a way that keeps us all in safe space.”

Greater MSP involved from the start

Early on the morning of Amazon’s announcement, Gov. Mark Dayton’s deputy chief of staff sent an e-mail to the governor and others saying that DEED was already reviewing the proposal, and that DEED commissioner Shawntera Hardy “said they will put together a bid, likely in partnership with Greater MSP.”

Four days after the Amazon project was made public, DEED’s Kevin McKinnon outlined how Greater MSP – and not state officials – would play a pivotal role.  “If you know of a city/county/developer etc. that is interested [in submitting a bid], they need to submit any information to Greater MSP,” McKinnon, DEED’s deputy commissioner for economic development, wrote in a September 11 e-mail message.  The e-mail was sent to nearly a dozen officials, including representatives of the University of Minnesota, the Metropolitan Council and Xcel Energy.

Even the notice to Minnesota cities and counties that their projects were included in the state’s overall bid came from Greater MSP, a non-profit that at the time was chaired by the head of US Bank.

“I am pleased to report to each of you that your site along with supporting documentation as requested by the client has been submitted and will be in Seattle tomorrow morning by noon,” Greater MSP’s Griggs wrote in an October 18 e-mail.  The e-mail was sent to more than a dozen cities and counties, including St. Paul, Forest Lake, Brooklyn Park, Rosemount, Maple Grove, Lakeville and Apple Valley

“Thank you for your hard work and patience in helping our region build and submit our proposal to Amazon for HQ2,” he added.

A DEED spokesman previously told PRM that they agency and its non-profit partner decided to “perform duties that best fit each organization’s strengths.”  The DEED spokesman said Greater MSP submitted the Amazon bid on the state’s behalf and added that the state agency did not have a full copy of the state’s bid to Amazon.  DEED, he added, had “no overall contract” with Greater MSP.

Although the economic development organization has not had a high public profile with many Minnesotans, Greater MSP has long been led by Twin Cities business heavyweights.  When the Amazon plan was announced last fall, top officials from Target, Cargill, Ecolab, Health Partners, Medtronic and other leading Minnesota companies served on the board.

DEED, Greater MSP worked in tandem on Amazon bid

New documents reviewed by PRM show that DEED and Greater MSP worked closely on the Amazon project.

“We will need to sort out over the next few weeks how we can add ALL of the interested partners into the mix on this one,” Greater MSP’s Griggs wrote in a message to DEED officials, including Jeff Rossate, DEED’s executive director of the office of business development.

“I agree,” DEED’s McKinnon, replied in an e-mail to Griggs on the day that Amazon announced the project.  “Furthermore, this team could/should meet every week for the next 6 weeks or as much as necessary.”

“Absolutely,” Griggs responded.

In a September 12 e-mail – just five days after Amazon unveiled the project – DEED’s Rossate stated that he and Greater MSP’s Joel Akason would serve as the “two co-leads” of a group “for which all official questions/requests and submissions will come from.”

Nine days later, Michael Langley – Greater MSP’s founding chief executive – sent an e-mail to Hardy, DEED’s commissioner.  “Thanks for your terrific partnership,” Langley wrote.

DEED and Greater MSP even discussed pushing potential sites in Minnesota for the Amazon project.

“Can StP put together a viable downtown campus with the riverfront and surrounding sites (transit stop near 1st Bank)?” Griggs asked in a September 11 e-mail, referring to a site in St. Paul.

An e-mail from September 7 provided yet another glimpse of sites that officials were discussing.  “We could be bold and recommend the Ford site . . . regardless of what the Mayor wants,” DEED’s Rossate wrote to a Greater MSP official.

Mall of America site reviewed for Amazon headquarters

The bid to lure Amazon to build a corporate headquarters in Minnesota included – among other plans — an elaborate proposal to wrap the project alongside the Mall of America in Bloomington.

Bloomington’s South Loop proposal, which was supported by the mall, touted the city’s “existing financial resources to fund public infrastructure (including parking) and offset land costs.”  It added that “nearly $400 million in existing public funding sources are available to Amazon” over the next fifteen years.  In addition, the proposal stated that tax increment financing at the Mall of America was generating $9 million annually as of last year, and would generate an estimated $250 million during the life of the special taxing district.

According to the city’s plan, a second nearby tax increment financing district was expected to generate $55 million over the life of the district.  A third potential funding source, the South Loop Development Fund, was already generating $6 million annually in 2017, according to documents.

Drawings illustrated how a new Amazon campus of at least a half-million square feet could be built alongside and to the east of the mall, while also extending south to the Minnesota River valley.  The city said that the area contained more than 140 acres of available land.

Bloomington’s proposal also stated that work on Amazon’s initial phase could begin in six months and be complete in less than two years.  “Mall of America strongly supports” the Bloomington site for Amazon, wrote Kurt Hagen, the senior vice president of development for Triple Five, the mall’s owner.

“A large portion of the proposed Bloomington site includes land that is owned by Triple Five.  [That] land is fully entitled for up to 7 million square feet of additional density, and the Amazon HQ2 project fits within current zoning,” Hagen added.

Other proposals released by DEED included a 160-acre site on the so-called UMore Park property in Rosemount, with the city offering tax abatement for the project.  Forest Lake and Washington County also submitted a 178-acre site near Forest Lake’s airport, according to e-mails obtained by PRM.

State grappled with Amazon non-disclosure agreement

The newly-released documents show that state officials – while wanting to move quickly – nonetheless struggled with Amazon’s proposed non-disclosure agreement.

Greater MSP has since cited a non-disclosure agreement with Amazon as one of the reasons it cannot make the state’s overall bid public.

“Can you please sign our NDA [non-disclosure agreement]?” Holly Sullivan, an Amazon official, wrote in a September 14 e-mail.  “We are requesting [submitting agencies] to please sign so we can answer questions efficiently.”

But Rossate told Amazon’s Sullivan the next day that doing so would be more complicated.  “I understand that Greater MSP has signed and returned the NDA and this has led to additional communications between your organizations,” Rossate wrote.  “We (DEED) are eager to expand the conversation with you as well.”

“I have shared your NDA with our internal legal counsel.  We should get feedback no later than Monday from counsel and if, for any reason, they request modifications, I will forward them,” Rossate added.

An unsigned copy of a non-disclosure agreement was included in the just-released DEED documents – but it left unclear whether it was the document ultimately signed by DEED and Greater MSP officials.

The unsigned document stated that “this agreement is effective as of the date Confidential Information is first received and will continue for 3 years, after which it automatically renews unless either party terminates this Agreement by providing at least 90 days prior written notice to the other party.”

However, the unsigned agreement also stated that some sections of the document “will survive indefinitely and the confidentiality obligations of this Agreement will continue to apply to the Confidential Information for as long as the information continues to constitute a trade secret or does not otherwise fall within an exclusion.”

Rossate sent Amazon an e-mail on September 18, telling the company that the state  attorney general’s office had forwarded “requested adjustments/mark-ups.”

The e-mails show that state officials appeared to focus on a clause in section five of the agreement that described “permitted disclosures,” and an unsigned copy of the agreement included language stating that an agency “may disclose Confidential Information as required to comply with applicable public disclosure or open records laws, including the Minnesota Government Data Practices Act.”

Michael Vaughn, a DEED official, told Rossate in a September 15 e-mail that “this is actually nicely written from my perspective.  I think section 5 covers us for data practices purposes.”

On October 18, Rossate asked Amazon officials for “a copy of the counter-signed NDA.”

Lloyd Chee, corporate counsel for Amazon, replied to Rossate later the same day.  “We typically do not sign such NDAs.  But, we can confirm our receipt and acceptance of the NDA,” Chee wrote.

Question-and-answer document included

Separately, the newly-released records also included a draft “question-and-answer” document, dated October 18, 2017 and labeled “confidential.”  It is unclear whether the document was generated by DEED, Greater MSP or if it was a joint collaboration.

“How many sites are represented in the proposal?” one question in the document asked.

“Over a dozen sites are included in our proposal, representing a mix of urban, suburban and exurban locations,” the document stated.

“Did you end up excluding any communities that wanted to put forward a proposal?” the document then asked.

“No.  All the submitting communities were able to meet the base specifications Amazon put forward,” the document stated.

“What sort of economic incentives do the various site proposals contain?” the document asked.

“Amazon advised us that detailed economic incentives were not required at this stage of their site selection process,” the document stated.  “So we emphasized instead the range of incentives that could be available and how those could be obtained.  In most cases, the relevant incentives would require enabling legislation, which would serve to make what is offered transparent.”

Amazon project drew Governor Dayton’s attention

The financial proposals by cities and counties to lure Amazon in Minnesota were separate from the subsidy package that state officials considered.  Gov. Mark Dayton had noted early on that he wanted the state’s bid to be “restrained,” and cited the needs of Target and Best Buy – two Minnesota-based Amazon competitors.

However, an e-mail message from the governor showed that the Amazon project drew his immediate attention.

“Please set up a meeting tomorrow morning” with DEED commissioner Hardy and other top officials, Dayton wrote in an e-mail on September 7 – the day Amazon unveiled its plan.  “Have them send me the [Amazon request for proposals] tonight.”

In an October 17 e-mail, Allison Jones, DEED’s assistant commissioner for policy, informed the governor’s staff of an array of state economic development subsidies that might be available to Amazon.  “[I] would recommend instead that we focus on how much the company is eligible for under current law instead of the total amount available.  Amazon can’t access the total amount available without special legislation,” she wrote.

As noted in Jones’ e-mail message, eight state subsidy programs might be available to Amazon, including up to $1 million in forgivable loans – the statutory maximum – through the Minnesota Investment Fund.  In addition, up to $2 million was available from the Community Infrastructure Fund for local governments for public infrastructure.  Other funds included $10 million available to local governments for transportation system improvements through the Transportation and Economic Development Fund.

A note accompanying the Transportation and Economic Development Fund summary added that “there are no maximum awards but these are the largest awards the department has made in recent years.”

Privately, however, DEED’s Rossate expressed doubts that Minnesota’s public subsidy offerings would be enough.  “I think the expectation of Amazon for incentives may exceed the appetite of MN,” he wrote.

Updated April 17 at 7:28pm