Here's What Could Lure Amazon To Texas — And Turn It Away | KERA News

Here's What Could Lure Amazon To Texas — And Turn It Away

Feb 7, 2018

Amazon's future second headquarters offers a potential bounty of benefits for the winner, and Dallas and Austin are the only two locations in Texas that remain in the race.

Emma Platoff has been covering the competition for the Texas Tribune. She lays out the state's advantages and setbacks as well as the possible negative effects of Amazon choosing Texas.

Interview Highlights

On what Amazon is offering in HQ2: 

Amazon has promised to invest $5 billion as a capital investment just to build the facility. To look at the example of the company's first headquarters in Seattle, they've seen a return into the city's economy of about $1.40 for every dollar that they poured into capital investments there. That's what cities across the country and even one in Canada (Toronto) are sort of counting on when they're courting this tech giant. The other big piece of it, of course, is a promised $50,000 jobs at that location.

On the possible negatives of hosting HQ2:

In general, people are worried about price increases. I saw one story actually saying that Amazon headquarters can decrease dating chances for women in the city — so, you know, depending on what governments think of that as a concern. Housing prices, transportation and traffic are also big concerns.

On why incentives might not work for Texas:

I spoke to an expert who actually studies just this kind of economic development deal. And he said to me that in less than a third of cases do these financial incentives prove pivotal to a company's decision. Generally, companies are looking at harder-to-change factors about a place that sort of edge it to choosing a final site — factors like quality of life, transportation in the region, these kinds of things that aren't as easy for local officials to offer up.

On Abbott and Texas money for HQ2:

Texas is very proud of its business friendly reputation, but this is just kind of an unprecedented public bidding war. We've seen offers as big $7 billion from New Jersey. I think Abbott's point is that Texas will step up; there will some be financial incentives, probably in the range of a couple hundred million. But his argument is that there are so many built-in advantages, as he put it, in Texas that the state doesn't need to put up these "big ticket" offers as much as places like New Jersey might need to.

On Fort Worth's place in the bid:

We know that the regional bid included site possibilities in more than two dozen locations in North Texas. Based on my reporting, Fort Worth definitely still is in the running. I think Amazon is just using Dallas as kind of an "umbrella name" for the North Texas region.

On the state's advantages:

The big one that the governor mentions is workforce. There are several large and well-ranked universities in both Dallas and Austin. Texas is one of three states that Amazon is still considering for this HQ2 location that doesn't have a statewide income tax, so that can be a big thing when you're looking at 50,000 employees. And in general, this kind of nebulous term of being a "business friendly" state...one expert put it to me as, you know, company leaders don't have to worry about the state Legislature passing undue regulations or the kind of thing that can worry CEOs.

On what might deter Amazon:

One thing that people are pointing out is the state's socially conservative policies. Last year, one of the big debates at the state Legislature was over the so-called "bathroom bill," which would have restricted transgender Texan's use of certain public facilities. Amazon was one of dozens of companies that came out against that bill, which did not end up passing, but some people think it could come back in 2019. Big tech companies generally have inclusive policies that prioritize diversity; that's something that companies like Amazon could be worried about.

Interview responses have been edited for clarity and length.