Judge Rules Minnesota’s Amazon HQ2 Bid Can Stay Secret

Judge Rules Minnesota’s Amazon HQ2 Bid Can Stay Secret

Greater MSP and the state's Department of Employment and Economic Development fought against the bid's disclosure.

Economic development organization Greater MSP and the Minnesota Department of Employment and Economic Development (DEED) have prevailed in a legal battle over disclosure of the state’s bid for Amazon’s second headquarters location, dubbed “HQ2.” St. Paul-based nonprofit Public Record Media (PRM) filed suit seeking to make the bid information public.

In a ruling handed down on January 3, Ramsey County District Judge Leonardo Castro found that the bid does not need to be disclosed because there was no contract between Greater MSP and the state. The decision was a ruling on motions to dismiss the case that had been filed by both Greater MSP and DEED.

“We agree with the court’s decision,” said Shane Delaney, spokesman for DEED.

The Minnesota Government Data Practices Act says that private groups are subject to the law if the entity is performing services under contract for a government agency.

“We made the argument that there was an implied contract between Greater MSP and DEED because they worked hand-in-hand to put the bid together,” said Matt Ehling, PRM’s executive director.

PRM has been fighting for the disclosure of the bid for more than a year, making its first request to DEED in October 2017. The state agency argued that they don’t have documents because regional development group Greater MSP handled the bid. Greater MSP contended that because it’s a private organization, it is not subject to the state’s data practices laws. PRM sued DEED in June and added Greater MSP as a defendant in August.

PRM now has 60 days to file an appeal. It’s not clear yet if the nonprofit will do so.

“We’re looking at what our appeals options are,” Ehling told Twin Cities Business on Friday.

Amazon announced its search for a second headquarters in September 2017 with a short time window for proposals: pitches were due in mid-October 2017. The payoff? Amazon touted making a $5 billion investment and bringing 50,000 high-paying jobs to the winner. From the beginning, Amazon made it clear that public incentive/subsidy money would be a key factor in its decision. Those incentives almost universally come from government agencies and programs — not private groups.

Amazon’s RFP called for specifics: “Identify incentive programs available for the Project at the state /province and local levels. Outline the type of incentive (i.e. land, site preparation, tax credits/exemptions, relocation grants, workforce grants, utility incentives/grants, permitting, and fee reductions) and the amount. The initial cost and ongoing cost of doing business are critical decision drivers.”

State leaders generally characterized Minnesota’s bid as “modest” compared to other metros. Amazon, which has a reputation for corporate secrecy, pushed cities to sign non-disclosure agreements. Minnesota failed to make the short list of 20 cities — culled from 238 submissions — named by Amazon in January 2018. In November Amazon announced that it was splitting the prize between the New York City and Washington D.C. metro areas.

DEED provided three boxes of printed emails in response to PRM’s request for correspondence about HQ2 between the groups. Ehling says that the emails make it clear how closely DEED and Greater MSP worked on the bid. The city of Inver Grove Heights, for example, was among many cities that submitted site info for the bid. But when a city official asked if they could see the bid, DEED declined.

“They didn’t tell Inver Grove Heights ‘We don’t have it,’ they said, ‘We’re not turning it over to you’,” Ehling said.

In an email responding to the Inver Grove Heights inquiry, a DEED staffer commented: “GMSP/DEED are not sharing the final product (at this time). The reason — it is not a matter of trust with the communities, but if it is distributed and a community receives a FOIA [Freedom of Information Act] request from media, the entire proposal would be subject to public viewing — which would allow our competitors across the U.S. to also see it (which we are hoping to avoid).”

Does Ehling think that the state and Greater MSP deliberately arranged the handling of the bid process to specifically avoid public disclosure under the state data practices law?

“It’s entirely possible,” said Ehling.

But for PRM the issue is much bigger than Amazon.

“We don’t want the state to have the ability to essentially outsource economic development proposals without the public being able to see what’s being done in their name,” said Ehling.