After whittling the candidates from 238 to 20, Amazon now faces the tough task of finding the perfect city for their new headquarters.
Amazon announced last month that it had narrowed the list of potential “Amazon HQ2” locations to 20 cities. Two-hundred thirty-eight cities applied to house the next headquarters for the multi-billion-dollar company, with applicants coming from America, Canada and Mexico.
Toronto was the lone Canadian finalist, with no Mexican cities making the final cut.
The final 20 are made up of 17 different states – including the District of Columbia – with Texas and Pennsylvania having the highest number of potential suitors at two apiece. Montana, Wyoming, North and South Dakota, Arkansas, Vermont and Hawaii were the only states not to have any applications for the new headquarters.
The full list of 20 cities still in the running include:
The goal of Amazon HQ2 is to replicate the economic impact that has been made in Seattle — where its only current headquarters is located — in whatever city is ultimately chosen. From 2010 to 2016, Amazon’s investments in Seattle led to an additional $38 billion for the city’s economy, with every dollar invested by the company resulting in another $1.4 for the city’s overall economy. Per their website, Amazon is aiming “to create 50,000 high-paying jobs and invest over $5 billion in the city where it opens HQ2.”
Interested cities were able to pitch a response to Amazon’s Request for Proposal (RFP) starting on September 7, and had until October 19 to submit them. The RFP said, when picking cities, preference would be given to cities that had: Metropolitan areas with more than one million people, stable and business-friendly environments, urban or suburban locations with the potential to attract and retain strong technical talent, and communities that think big and creatively when considering locations and real estate options.
As part of each city’s proposal, they were encouraged to provide a list of total incentives they would be able to offer, as well as other notable advantages, including access to airports and highways, higher education institutions in the areas and crime and cost of living data. Amazon is also prioritizing existing buildings with the size requirements they are looking for, as well as shovel-ready greenfield sites and infill opportunities as a way to expedite the construction process.
Amazon is anticipating at least 500,000 sq. ft. in the first phase of construction, set to begin in 2019. Beyond that, the final square footage of Amazon HQ2 could be as high as 8,000,000. All requirements and timeframes can be found on the company’s RFP.
Much is already being made about which finalist is best suited for Amazon HQ2. All these finalist cities are on the list because they either have, or nearly have, the requirements that Amazon is looking for. The question then becomes, what will be the defining criteria that will help Jeff Bezos & Co. help whittle down the contenders?
Will they want a city similar or identical to Seattle, where they’ve had massive, proven success? Will they go for a “sexier” name city such as New York, L.A. or Miami? Could they want to expand their reach and empire even more by setting up shop in Canada? Will HQ2 have matching Spheres with the Seattle location?
A city generating a good amount of buzz around it is Atlanta. Bestplaces.net compiled a hyper-ranking of top potential cities for Amazon HQ2, with Atlanta coming out as a clear favorite. The city’s size, access to airports and cost of living were all cited in the article as leading features that could attract Amazon.
Consulting with experts in the field, CNN seemed to land on four front-runners: Atlanta, Austin and east coast locations such as New York and D.C.
Atlanta was brought up for many of the same reasons that were mentioned by Bestplaces, but Austin seemed to have much more of consensus. Ravi Bhalla, mayor of Hoboken, New Jersey, said in the article that Austin will be the choice because, “Austin is one of those cities that, being on the cusp of even greater things, creates an element of affordability that Amazon also seeks.” He also referenced Austin’s upward-trending innovation that could draw in Amazon.
Another factor to consider with this location is that the headquarters of the now-Amazon-owned Whole Foods is in Austin. This is not the only spot that Bezos has ties in, though. As the owner of The Washington Post, and with a mansion in D.C., Bezos could opt to become a bi-coastal empire there.
Some cities are offering Amazon tax breaks if they are chosen for HQ2. Two contenders that were directly mentioned in a Fortune article were New Jersey and California, with each offering $7 billion and $300 million respectively.
Technologically speaking, many of the cities remaining are strong technological fits for HQ2, with seven appearing in Business Insider’s 2017 list of most high-tech cities in America. Philadelphia, D.C., Dallas, Chicago, Boston, L.A. and New York all make up numbers eight through two on the list respectively.
Boston kills two birds with one stone, as MIT resides in Massachusetts. Not only is it one of the most respected universities in the country, but it is also a hub for technological creation, and would likely serve as a feeding ground for graduates to find jobs with Amazon.
Similarly, New York offers their own institute of technology (NYIT), as well as one of the most robust markets in the country. With the number of people that HQ2 would be able to directly affect in New York, it would be almost too easy for it to be a success. What will be more interesting to see is, if chosen, where in New York City would Amazon make or find room for HQ2.
One front-running city not listed is Austin. Back in late-2016, Austin was ranked the best place to start a business by CNBC. It’s already shown itself as a place that can sustain a large company, as - previously mentioned - Whole Food is headquartered in the city. The city will also be able to provide a young, well-educated workforce, with the acclaimed University of Texas at Austin at their disposal.
The bottom line is this: none of these cities would have made it this far in the process if Amazon didn’t think that their tech presence would be enough to sustain HQ2. The question now just becomes, who will be the best fit.
While none of the remaining applicants are “no-name” cities by any means, there are some that are located in significantly smaller markets. Places like Columbus, Montgomery County, Newark and Northern Virginia are all places that, if Amazon were to come in, would feel an instant boost to national prominence. Amazon’s HQ2 would then also be able to be credited for the growth the region would receive.
For the cities with populations right around 1,000,000, the 50,000 new jobs created could mean as much as a 5 percent increase in population, depending on how many of those jobs are filled by out-of-state workers.
It wouldn’t stop there though. Amazon put the number of additional jobs created in the city of Seattle as a result of their first headquarters at 53,000 in just six years. The personal income of non-Amazon employees as a result of Amazon’s investments hit $17 billion.
Yes, with a “B.”
The potential for these cities is, of course, great, but the same cannot necessarily be said for their chances of winning the HQ2 bidding war. Looking beyond any lack of relationship that Bezos or the company might have to a specific smaller-market city, Amazon will likely want to position themselves in the strongest - and largest - market with copious resources so they can to guarantee success.
Amazon is already perhaps the biggest company in the country, if not the world, and Bezos’s place as the world’s richest person is solidified — they must be doing at least a couple things right, to say the least. Far be it from me to tell the man how to do his job, but the thought of expanding and adding a headquarters to another country has to be something Bezos is thinking about.
It’s not only that aspect that makes Toronto an appealing candidate for Amazon HQ2, though. With a diverse population of nearly three million, Toronto has the right size and sustainability to help HQ2 thrive. Combine that with being one of the most progressive countries in the world, an aspect that would no doubt be appealing to Amazon, and you’ve got a city that could arguably be in the top-five of the remaining cities.
In a statement released January 18, Toronto Mayor John Tory talked about why the city is a strong candidate for Amazon HQ2:
The Toronto Region has emerged as a global centre of innovation and technology because of our talented, diverse and inclusive workforce. We are excited to have this opportunity and to be able to tell Toronto’s unique story. There is no other city region in North America that can boast the same talent, the same quality of life, the same vibrancy and economic strength.
To boot, another key preference outlined in Amazon’s RFP is “travel time to an international airport with direct daily flights to Seattle, New York, San Francisco/Bay Area, and Washington D.C.” Sporting the largest airport in the country — Toronto Pearson Airport — that’s a section Toronto can place firmly in the win column.
In a world where you can now bet on things such as the length of National Anthem renditions and what the name of celebrity babies will be, it comes as no surprise that there are betting odds on where Amazon will choose to house HQ2. PaddyPower.com, an Ireland-based gambling website, currently has Boston as the favorite with 2/1 odds.
Since Amazon has not provided a specific timeframe for when they will announce the winner, there is no telling how much more they will narrow the selection, or how much these odds will change. That being said — and I am no bookie, nor do I have any experience betting odds — but if I were a betting man, with the odds as they are currently, my money would be going towards Austin, Atlanta and D.C.
Some of those odds that I would stay away from include Boston, Pittsburgh and Philly, and all of the 20/1 odd cities. Now you’re probably thinking, “Hey, Jack? Boston is the odds-on favorite, why shy away?”
Great question there, friend, and while Boston is a great city that could no doubt sustain HQ2, looking at the kind of company Amazon runs and how they set themselves up in Seattle, the settings differ too much in my eye for Bezos to choose Boston.
Pittsburgh and Philadelphia are still cities that would not surprise me, but similar to Boston, they are cities that still give off an air of blue-collar-ish-ness, and I don’t think that would be as appealing a setting for HQ2 as a city with a younger average population.
And the lowest odds cities, unfortunately, speak for themselves. As much as I would love HQ2 coming to Columbus and my beloved state of Ohio, it’s not a sexy enough name in a big enough market. The two cities with the best chance of pulling the upset are L.A. and Dallas, but even then, stay away from these underdogs.
Though many questions still surround what city will be selected and when, one thing that’s certain is that wherever Bezos takes Amazon HQ2, the headquarters and chosen city are bound to be successful. You don’t become the most successful businessman in the world, and in the opinion of some, the best businessman ever, by making poor decisions. Amazon will likely take their sweet time vetting the remaining candidates, as well they should.
Taking into account the investments that Amazon is anticipating to make HQ2, the money that will end up going back to the chosen city and the amount of direct and indirect jobs it will create, it’s not out of the realm of possibility that Amazon HQ2 ends up having a greater impact on its city than its original Seattle headquarters.
One potential pitfall of the project that will need to be watched by the winning city is how it will be able to handle the lengthy construction process that is going to come with HQ2. Phase one of building is set to begin in 2019, with additional phases scheduled to take place up until 2027, and potentially beyond.
An issue that will have a markedly bigger impact on city residents is the increase in rent that will likely come with HQ2’s implementation. Business Insider’s Tanza Loudenback said the chosen city could expect to see rent increase as much as 2 percent, depending on the city.
Numerous states have signed on to an open letter to Jeff Bezos, outlining some more concerns about HQ2’s implementation. Three of the major concerns include Amazon’s ability to live up to their goal of 50,000 new jobs created if the company will carry their weight with building and sustaining their community and calling on Amazon to be transparent with the public during different stages and processes of HQ2’s implementation.
“We love jobs, we love technology, and we love convenience—but what you’re looking for will impact every part of our cities. We built these cities, and we want to make sure they remain ours,” the letter reads.
The qualities that Amazon is looking for in its new home search are the same things many of us want—it’s perfectly normal to want a place where employees will enjoy ‘living, recreational opportunities, educational opportunities, and an overall high quality of life.’ The things about our cities that make you want to move here are the same reasons many of us live here—we have great systems of higher education, museums, and infrastructure that helps move people and things from one place to another. But we got that stuff by collectively paying for it, through taxes, and we’re expecting Amazon to pay your fair share if you end up being our neighbor.
Despite some concerns, HQ2 seems poised to be nothing short of a smashing success. What they have been able to make of their first HQ in Seattle, and the effect it has had on the city beyond the company leads me to believe that Bezos will have no problem thriving wherever he chooses to call home next.
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