Dallas Is 'All In' On Amazon HQ2. Austin? ¯\_(ツ)_/¯ | KERA News

Dallas Is 'All In' On Amazon HQ2. Austin? ¯\_(ツ)_/¯

Mar 15, 2018

To hear Dallas Mayor Mike Rawlings tell it, attracting Amazon is “like a poker game.”

“Bring the bidding war on,” he said shortly after Dallas made the shortlist to house the tech giant’s second headquarters. And in that war, he’s “all in,” he made clear in an interview weeks later.

A few hundred miles south, Austin Mayor Steve Adler has yet to ante up.

 

“I don’t know that we want to be” Amazon’s second home, Adler said last week.

Austin and Dallas are the only two Texas cities still in the running to land Amazon’s second headquarters, a coveted $5 billion capital investment the company says will employ as many as 50,000 people.

Both cities are considered strong contenders. Various algorithms have ranked each one first, and both made the top five in a recent survey of site selection consultants. But the cities’ most public spokesmen seem to be taking opposite approaches to the deal. Adler said Austin’s initial bid did not contain any financial incentives, for example; Rawlings has promised that Dallas will be “aggressive.”

Those approaches highlight the divergent business climates within the two cities — and could affect the two cities’ standing in the tech behemoth’s eyes, some experts say.

“One approach is better than the other,” said Ron Starner, who has been following the Amazon bidding war for Site Selection magazine. “If you’re up against an Atlanta and a Dallas-Fort Worth which you know are going to hold nothing back, that historically have a long track record of winning projects like this… saying ‘Um, yeah, I’d really like you to come here but as part of the long-term package we’d like you to help us solve our problems’ — I’ve never been aware of that being a winning strategy.”

The full details of the two cities’ wooing efforts are all but impossible to know at this time. Amazon has reportedly asked local officials not to discuss details of the deal publicly; Rawlings’ office declined to comment for this story, citing a non-disclosure agreement. And both Texas cities have refused to make public most of their communications with the Seattle-based company, as well as the proposals themselves.

But in interviews and public statements, Rawlings has spoken at length about all that Dallas has to offer Amazon. Adler, despite touting his city’s perks, seems to be wondering what Amazon can offer Austin.

“We have really severe traffic issues and really severe affordability issues,” Adler said last week in an interview with Evan Smith, CEO of The Texas Tribune. “If, because of your scale, because of the resources and power you bring, you can actually help us deal with mobility in a way that we can’t deal with it on our own or aren’t going to be able to deal with it for a significant period of time, well then I want to have that conversation.”

“But that’s the conversation we should have,” he emphasized.

Meanwhile, Rawlings, the former chief executive of Pizza Hut, has indicated that he sees the bidding process like any other: catering to a client.

“This is about taking care of a customer, and saying, ‘Customer, what do you like? Blue? Red? You like something that is slimming?’” Rawlings said. “It’s all about, ‘The customer’s right.’”

He also made that clear in a promotional video that the city released with its application: “I love DFW because it’s easy. It’s a great place to live.”

In his initial pitch, Adler asked Amazon to see Austin’s “greatest challenges as an opportunity.”

The Dallas approach is markedly more traditional, experts said.

“Most often, you’ll see the communities competing for the site to really be coming up with very, very competitive solutions, and that’s what we may be witnessing from the Dallas competition,” said Jeff Moseley, CEO of the Texas Association of Business.

The two mayors’ rhetoric squares with what several experts describe as a pattern from the two cities’ economic development departments. Dallas has historically been more business-centric and more generous with financial incentives. Austin — a city that sometimes clings to its free-spirit, college town reputation — has tended to be more skeptical of corporate relocation deals.

The two cities are “kind of the polar ends,” said Nathan Jensen, a University of Texas at Austin professor who studies the impact of financial incentives.

Austin is also “more progressive” when it comes to economic development, said Dallas City Council Member Philip Kingston — meaning the capital city is less likely than its northern neighbor to hand out substantial financial incentives.

“The business community and the political leadership [in Dallas] really believe in all of that old-school, civic boosterism hokem that if you spend a bunch of money then you get all this ‘economic impact’ in your city,” Kingston said. “I have yet to be able to fill a pothole with ‘economic impact.’”

Kingston said he is part of an “insurgent” minority on the Dallas City Council that doesn’t support generous financial incentives. Along with Austin City Council Member Greg Casar, Kingston recently signed an online “non-aggression pact” asking Amazon’s candidate cities to band together in rejecting “egregious tax giveaways and direct monetary incentives for the Amazon headquarters.”

That view seems more dominant among members of Austin’s City Council, many of whom have publicly expressed skepticism about the deal-making process and the prospect of Amazon coming to Austin at all. Adler said this city council has “operated in the best interest of the city overall.”

“There was some question or concern that people expressed to me, that you can’t send that letter in because it’s going to take us out,” Adler said. “But this is who we are and this is the conversation this community would want to have as part of that.”

Disclosure: Steve Adler, a former Texas Tribune board chairman, the University of Texas at Austin and the Texas Association of Business have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here

The Texas Tribune provided this story.

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