Louisville Metro Government must turn over to the Courier Journal its bid for Amazon’s “HQ2” project, the Kentucky Court of Appeals said in an ruling released Friday.
The unanimous opinion found that the records were not preliminary, as Louisville Metro had argued, because it wasn’t selected by Amazon as a finalist. That meant the proposal was no longer subject to change and marked “final action.”
“Final action occurs when the ultimate issue is definitely resolved, either by action or a decision not to take action,” the court’s opinion said. “… Accordingly, we affirm the summary judgment by the Jefferson Circuit Court.”
The opinion could mean the public has the opportunity to scrutinize the city’s pitch to the online retail giant, which consisted of hundreds of pages, promotional videos and a website, as well as the incentives package city officials offered.
That may not happen right away, however, as the court ruled the order requiring the city produce the document won’t go into effect until after the opinion becomes final.
Opinions become final on the 31st day after they are issued, and during that window of time, the city could ask the Kentucky Supreme Court to hear the case.
In a statement sent Friday afternoon, the mayor’s office confirmed it planned to ask the Kentucky Supreme Court to review the opinion.
“We are disappointed in the ruling by the Court of Appeals. We believe the decision of the Court of Appeals will have a far reaching negative impact on the state and its counties and municipalities regarding their economic development activities,” said Jessica Wethington, a spokeswoman for Mayor Greg Fischer’s office.
The Courier Journal sued Louisville last spring for refusing to release details on the incentives it offered to Amazon in return for the company building its second headquarters here.
The city’s economic development agency, Louisville Forward, cited an exemption to the state’s open records law when asked for specifics on the competitive bids. Those enticements, it said, can remain confidential even if no deal is reached.
A Jefferson Circuit Court judge struck that argument down and ruled in September 2018 that Louisville must turn over to the Courier Journal the full proposal it offered. The order was issued a day after Fischer said it would be “business malpractice” to share the plan.
The city appealed that ruling to the Kentucky Court of Appeals.
The case was considered by a three-judge panel that included judges Pamela Goodwine, James Lambert and Irv Maze. Maze wrote the opinion.
Louisville’s bid cost about $170,000 to prepare, with $70,000 coming from the city and the rest from private donations raised by Greater Louisville Inc., the city’s chamber of commerce. It was one of 238 proposals submitted across the United States, and it was not selected as one of the 20 finalists.
“Louisville taxpayers helped pay for the Amazon pitch to the tune of $70,000, and public employees, I am certain, worked hundreds of hours to compile the report. The public deserves to see what their tax dollars produced – and what potential taxpayer-financed incentives were being offered to Amazon,” said Richard Green, the Courier Journal’s editor and vice-president of content.
“We disagree with the mayor’s office that this jeopardizes future economic development efforts and applaud the Court of Appeals for its thoughtful decision. The Courier Journal has a longstanding belief that the public’s work should be open and transparent to the taxpayers who pay for it, and I am happy the court agreed with us.”
Fischer has defended his administration’s decision not to release the incentives.
“I spent 35 years as a business person and entrepreneur,” he said last year. “I would ask anybody that’s been involved in business, do you think that you should give your playbook to a competitor? I mean come on, that would be business malpractice.”
A spokeswoman for Fischer has also noted that the proposal was a starting point for negotiations, and that an agreement on incentives was never reached. That would generally require Metro Council approval after public discussion, she said.
The administration has provided the Courier Journal with several redacted pages about the proposal, including a presentation called “Louisville Bold” that touted the community’s cost of living, labor pool and internet connectivity. It said Louisville would be a “bold choice for Amazon’s future” and that the city is gathering momentum every day.
The material mentioned building a “Water Taxi service” for Amazon, but information on its cost and location appeared to be redacted. Several other parts of the proposal, including tax breaks and possible locations for the headquarters, were kept secret as well.
Attorneys Michael Abate and Jon Fleischaker, who represented the Courier Journal, described the opinion as a good win for transparency that could lead to an opportunity for taxpayers to examine the proposal.
“We offered an arm and a leg, and we didn’t get it, probably for reasons unrelated to how much money we offered,” Fleischaker said. “That tells us something about where we have to improve.”
To have a discussion about that, the attorneys said, the public must be able to know what was offered.
“These are all important issues for public discussion and debate, but without knowing what was offered, we can’t have that debate,” Abate said. “We can’t have an intelligent discussion about how we should be pursuing a company like Amazon without knowing what improvements we need to focus on to be competitive for projects like this in the future.”
“The public has a right to make an evaluation: Did we offer too much? Did we offer too little? Without understanding the terms of a major package like this — that would’ve altered the fabric of the city — we have no way to know,” he added.
Louisville Metro’s argument for why it shouldn’t release the documents was twofold. In addition to contending the documents were preliminary because it says Amazon never formally rejected the proposal, it cited an exemption for public records pertaining to economic development.
That exemption provides that public records relating to a prospective business or industry coming to Kentucky don’t have to be released “where no previous public disclosure has been made.”
Louisville Metro Government argued that Amazon never announced its interest in relocating in Kentucky, but the opinion struck that down: “Amazon’s interest in relocating was extensively publicized. We conclude that this publicity amounted to a public disclosure of Amazon’s interest.”
Greater Louisville Inc. said in a statement that the ruling was out of step with “best practices for business attraction” because it makes negotiations “susceptible to open records requests.” Kent Oyler, the group’s president and CEO, said that lack of confidentiality may discourage companies from locating here in the future.
Jack Mazurak, a spokesman for the Kentucky Cabinet for Economic Development, shared similar concerns about how the ruling “will cripple economic development efforts statewide.”
“In essence, this ruling requires that we give the opposing team Kentucky’s game plan so they can use it to beat us,” Mazurek said in a statement after pointing to competitor states who would be able to see Kentucky’s pitch. “That is why this information must remain confidential and this ruling must be appealed and reviewed by the Kentucky Supreme Court.”
Abate noted that ruling forcefully rejected Louisville Metro’s argument because of the “uniquely public” nature of Amazon’s call for bids and the city’s press conference to tout its efforts. It wouldn’t open every economic development record going forward.
“Under existing law, with fanfare and press on both sides, you don’t get to keep it secret,” Abate said of the ruling.