Cities Try Convincing Amazon They're Ready For Its New Headquarters | KERA News

Cities Try Convincing Amazon They're Ready For Its New Headquarters

Sep 18, 2017
Originally published on September 19, 2017 1:45 pm

An official from Toronto has called Amazon's search for the second headquarters "the Olympics of the corporate world."

It's a unique situation of its kind and scale. Typically, cities and states vie for factories or offices behind the scenes. This time, Amazon's public solicitation of bids from essentially all major metropolitan areas in North America has prompted reporters and analysts across the continent to run their own odds on potential winners.

What's at stake?

The top-line pitch is Amazon's promise to invest $5 billion in whatever community it picks to be the home of its second headquarters. And the company says it would bring up to 50,000 new jobs, with an average salary of more than $100,000.

In Seattle, Amazon's towering 8.1 million-square-foot downtown campus employs tens of thousands of employees and has served as a testing ground for new retail ideas, like a store without checkout registers. Amazon says HQ2 would be a "full equal."

What is Amazon looking for?

The company's call for applications is extremely detailed. It should be a metro area with more than 1 million people, a business-friendly tax structure, close to an international airport and near major highways, a place with mass transit, good Internet and "excellent" higher education.

The company is also not shy about saying it wants an attractive offer of a financial incentive — a move that has become customary for corporate expansions, which often involve tax cuts, relocation grants or fee reductions. "The initial cost and ongoing cost of doing business are critical decision drivers," Amazon says in the request for proposal.

Which communities are vying for the HQ2?

With almost four weeks until the deadline, the list of potential contenders is expansive: Austin, Texas; New York, Boston, Chicago, Washington/Baltimore, Atlanta, Denver, Ottawa and Toronto — cities up and down and across the continent, tallied to number more than 100 by the Chicago Tribune.

And the communities aren't shy about their public pitches.

"We have sites that are ready, that are transit-oriented," says Scott Levitan, head of the Research Triangle Foundation in North Carolina. "We have tremendous fiber backbone at our site and we have a region that is absolutely focused on being the best possible location for HQ2," he says, adding that the Raleigh-Durham-Chapel Hill metro area sits equally between the ocean and the mountains.

"Colorado is perfectly aligned with the company's culture of collaboration and innovation and focusing on its customers," says Yuriy Gorlov, vice president of the Aurora Economic Development Council, also highlighting the Denver area's access to fiber, power, transit and a nationally recognized hiking trail system.

"We feel like we have a lot to offer, in terms of our talent base, our logistics, our business-friendly climate," says A.J. Robinson, president of Central Atlanta Progress. "And most of all, people love to live and work here."

(Note: Amazon is one of NPR's financial supporters.)

What are the cities' biggest considerations or potential concerns?

Though Amazon likes to tout the billions of dollars it says it has injected into Seattle's economy, the city has been tested by the massive corporate presence.

Over the years, frustrations aired by residents of Seattle (headquarters there employs 40,000 employees) have included rapidly rising housing costs, traffic congestion, gentrification and pressure on local businesses. As The New York Times reported recently:

"Some local lawmakers have blamed Amazon for being a primary contributor to the region's lack of affordable housing and other woes. The City Council recently unanimously approved a tax on individual income over $250,000 and $500,000 for couples, which would affect high-earners at Amazon. The legislation is facing legal challenges.

"The local antipathy toward the company was summed up in graffiti that recently appeared on the wall of a busy downtown traffic tunnel: an expletive before the last name of Mr. Bezos."

The communities seeking HQ2 aren't likely to be naive about what happens when a city gets flooded with thousands of high-net-worth office workers. But in the heat of a bidding war, none of the economic development officials interviewed by NPR said that anyone on their team has suggested avoiding the bid because of potential negatives.

Of course, bidding for Amazon isn't like bidding for the Olympics — the games come and go; the corporate headquarters stays — but Atlanta's Robinson said his city definitely learned a useful lesson from hosting the 1996 Games.

"Having survived the Olympics, we know that post-winning, you have to deliver," Robinson says. "You have to have the infrastructure; you have to be willing to invest in transit, in types of things that this number of workers will need, the housing stock and so forth."

Major pushback has so far focused on the potential cost to taxpayers, as all bidding communities weigh how they can entice Amazon with tax credits, free land or other financial perks.

After The New York Times analysis zeroed in on Denver as the best candidate for Amazon's HQ2, The Denver Post published an editorial titled, "In Denver's courting of Amazon, officials should remember the taxpayers." The Post's editorial board wrote:

"We'd love to see Amazon locate here, as long as we're not left feeling like we've given away the store."

NPR's Art Silverman, Emily Sullivan and Business Desk intern Yu-Ning Aileen Chuang contributed to this report.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

AILSA CHANG, HOST:

Amazon wants to find a home for a second headquarters. The Seattle-born company put out the word about two weeks ago and has set a deadline of mid-October. We'll find out who's in the running on this week's All Tech Considered.

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CHANG: And our guide to the bidding cities is NPR business reporter Alina Selyukh. Hey, Alina.

ALINA SELYUKH, BYLINE: Hi.

CHANG: OK, so before we jump into the competition, remind us what is at stake here.

SELYUKH: What you've got one of the world's wealthiest companies essentially soliciting bids for a new corporate location super publicly.

CHANG: Yeah.

SELYUKH: We're talking about a company that employs more than 341,000 people in the U.S. And it's promising to invest $5 billion in whatever community it picks and to bring up to 50,000 new jobs. And we're talking on average pay of six figures.

CHANG: Fifty thousand new jobs. I can imagine that a lot of the local communities vying for their cities are not being at all shy about touting their assets right now.

SELYUKH: Certainly no shortage of pitches. Here's a small sampling.

YURIY GORLOV: Amazon should locate its second headquarters in Aurora, Colo., because Colorado is perfectly aligned with the company's culture.

RONNIE BRYANT: The Charlotte Regional Partnership. We are the fastest-growing community for millennials in the country.

SCOTT LEVITAN: North Carolina is a state that has worked very hard to create a friendly environment for business.

A J ROBINSON: Downtown Atlanta. We have a lot to offer in terms of our talent base. And most of all, people like to live and work here.

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COMPUTER-GENERATED VOICE: Obviously, Washington, D.C.

MURIEL BOWSER: They have the West Coast Washington and the East Coast Washington.

SELYUKH: The folks you just heard from are Yuriy Gorlov of the Aurora Colorado Economic Development Council, Ronnie Bryant of the Charlotte Regional Partnership, Scott Levitan of North Carolina's Research Triangle Foundation, A.J. Robinson of Central Atlanta Progress and Washington, D.C., Mayor Muriel Bowser.

CHANG: And that is just a very, very small sample...

SELYUKH: Indeed.

CHANG: ...Of a very, very long list of cities that are vying for this, right?

SELYUKH: Yes.

CHANG: What is Amazon asking for from these cities? What does it take to make a bid?

SELYUKH: They've issued essentially a call for bids that's super detailed. A major factor is the size of the community. They're looking for a metro area with more than 1 million people, a business-friendly tax structure, something close to an international airport and right near major highways, a place with mass transit and coverage by multiple cell phone carriers - a fine point - but also a place that would support a diverse population and has, quote, "excellent higher education."

CHANG: Does it feel like every major city wants an Amazon headquarters at this point?

SELYUKH: I mean, we heard from some. Others in the running are New York, Boston, Chicago, D.C./Baltimore, Ottawa and Toronto up in Canada. One official there actually called this the Olympics of the corporate world.

CHANG: The Olympics. Well, I guess I can see the Olympics parallel. But this also feels a little bit different from the Olympics.

SELYUKH: Definitely. I mean, the biggest difference is that the Olympics come and go while the Amazon skyscrapers and thousands of office workers are here to stay. But I did ask A.J. Robinson of Central Atlanta Progress about the lessons his city learned from hosting the Olympics.

ROBINSON: Having survived the Olympics and grown exponentially since the Olympics, we know that post winning you have to deliver.

SELYUKH: And what he specifically named was infrastructure, transportation and housing, as in it's one thing to attract thousands of new workers, and it's a whole other thing to make sure that they actually fit in your city.

CHANG: That's something we've heard about in Seattle. You know, Amazon's been blamed there for the rising housing prices, traffic congestion, gentrification - a whole host of problems. So do you get the sense that there are some applicants that are concerned about the potential downsides of this?

SELYUKH: We talked to economic development folks from different communities, and I asked them specifically about this. Has anyone in your group raised their hand and said, maybe this isn't such a great idea for us? And not one person admitted to that. Here's Yuriy Gorlov from the Denver area in Aurora, Colo.

GORLOV: There's no downside to this. Headquarters always boost the economy. In general, they attract a lot of good people. They only drive the economy forward. And that's what we're all about.

SELYUKH: Of course, I don't think communities are being naive about what happens when - to a city when it gets flooded with high-net-worth office workers. But for right now we're in a competition, so it's not a great conversation starter.

CHANG: But are you seeing some pushback in communities from people who really do not want an Amazon to be there?

SELYUKH: Mostly newspaper opinion sections. For example, Denver came out as the winner in an analysis by The New York Times recently in part because it has a high quality of life, a growing labor pool. But of course, a huge consideration is financial incentives. Part of the competition is who can offer Amazon the most appealing tax break or fee reduction? And so The Denver Post has now come out with an editorial warning against a huge cost to taxpayers. They write, we'd love to see Amazon located here as long as we're not left feeling like we've given away the store.

CHANG: All right, that's NPR's Alina Selyukh. Thank you.

SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.