Amazon HQ2

Amazon HQ2 is a proposed new corporate headquarters for online retailer and tech company Amazon in North America, to supplement the existing Seattle headquarters. Amazon announced the initiative, along with a request for proposals from governments and economic development organizations, in September 2017, attracting attention from more than 200 cities in Canada, Mexico and the United States.[1] Amazon intends to have 50,000 workers at HQ2 and is planning to invest $5 billion in new construction.[2] A shortlist of 20 finalists was announced January 18, 2018.[3]

Background

Part of the Amazon headquarters in Seattle, under construction in 2015

Amazon.com was founded in 1994 in Bellevue, Washington, and moved to leased space in the SoDo neighborhood of Seattle. As the company grew, it went through a series of office moves around Downtown Seattle, until announcing a move to a purpose-built headquarters campus in the South Lake Union neighborhood, then a light industrial enclave undergoing urban renewal.[4] As of 2017, Amazon occupies 8.1 million square feet (750,000 m2) of office space in 33 buildings, employing 40,000 white collar workers.[5]

Requirements

Amazon's request for proposals outlined several core requirements, as well as optional preferences.[6]

  • Metropolitan areas with a population of over 1 million
  • A stable and business-friendly environment
  • Within 30 miles (48 km) of a population center
  • Within 45 minutes of an international airport
  • Proximity to major highways and arterial roads 1–3 miles (2–5 km)
  • Access to mass transit routes
  • Up to 8 million square feet (740,000 m2) of office space for future expansion

Optional preferences include airports with direct flights to Seattle, New York City, San Francisco, and Washington, D.C., urban locations, and proximity to major universities.[7]

The deadline for Phase I bids was set at October 19, 2017.[8] A final site is planned to be selected and announced in 2018, from a shortlist of 20 cities released in January.[6][7][3]

Bids

Submitted

As of October 23, 2017, 238 proposals had been submitted and received by Amazon, representing cities and regions from 54 states, provinces, districts, and territories.[9][10][1] The only U.S. states that did not have a locality that submitted a formal proposal were Arkansas, Hawaii, Iowa, Montana, North Dakota, South Dakota, Vermont and Wyoming.[11] The Canadian provinces of New Brunswick and Saskatchewan also declined to bid, along with the Yukon Territory.[12]

Withdrawn

Promotional campaigns

Sun Corridor, a Tucson, Arizona economic development firm, sent a 21-foot saguaro cactus to Amazon in an attempt to promote the city's bid. The gift was rejected due to the company's corporate gifts policy, instead donating it to the Arizona-Sonora Desert Museum.[15]

The city of Stonecrest, Georgia, a suburb of Atlanta, voted to de-annex 345 acres (140 ha) of land for Amazon to establish its own city named Amazon around its headquarters.[16]

Sly James, mayor of Kansas City, Missouri, purchased 1,000 products from Amazon, which he donated to charity. James wrote 5-star reviews for each one of them, in which every review mentioned positive attributes of Kansas City.[17]

Primanti Brothers, a chain of sandwich shops based in Pittsburgh, offered free sandwiches to Amazon employees if they chose the city as their second headquarters.[17]

The city of Birmingham, Alabama erected several giant Amazon boxes and dash buttons around public areas. The dash buttons sent out pre-generated tweets to lure Amazon to the city.[17]

New York City Mayor Bill de Blasio announced that major landmarks in the city would be lit in orange to promote the city's campaign for HQ2.[17]

For one of Canada's many bids, messages hoping to persuade Amazon to move to Calgary were sprayed onto sidewalks in Seattle's South Lake Union neighborhood.[17] During an Ottawa Senators hockey game, fans were encouraged to "make noise" for the city of Ottawa's Amazon bid.[8]

Contrary to other cities, Little Rock, Arkansas, purchased a full-page ad in the Washington Post "breaking up" with Amazon, where they described their decision to not submit a bid, while also touting the city's positive attributes.[18] A few days after the bid deadline, the campaign flew a banner plane over Seattle with the same message.[19]

Finalists

Amazon HQ2 final 20 cities

On January 18, 2018, Amazon announced its shortlist of 20 finalists for the HQ2 bidding process. The list focuses mainly on the East Coast and Midwest, with Los Angeles the only selection from the West Coast and Toronto the only one outside of the United States.[3][20][21]

Amazon began tours of its finalist cities in late February. Bidding cities also signed non-disclosure agreements with Amazon for the duration of the bid process.[22][23] NBC News reported in May that visits to the 20 finalists had been finished by Amazon.[24] In an interview in September 2018, with the Economic Club of Washington (D.C.), Bezos said, “We will have a decision by the end of the year.”[25]

Analysis

The announcement came as a surprise in Seattle, where Amazon is actively expanding their South Lake Union campus and has 40,000 workers occupying almost 20 percent of the city's office space.[26] Former Seattle Mayor Ed Murray announced that he would begin conversations with Amazon about their long-term plans for the city, while the Seattle Metropolitan Chamber of Commerce characterized the announcement as a "wake-up call" to improve the city's business climate.[27] Comparisons were made to Boeing's decision to move their corporate headquarters from Seattle to Chicago in 2001, which came as a surprise to the city but ultimately only affected a few hundred corporate jobs.[28]

Moody's Analytics published an analysis of bidding metropolitan areas and determined that Austin, Texas, ranks highest among Amazon's criteria, followed by Atlanta, Philadelphia, and Rochester, New York.[29] The New York Times also completed an analysis which found Denver to be the best site based on Amazon's criteria, followed closely by Boston and Washington, D.C.[30] Irish gambling site Paddy Power originally listed Atlanta as the odds on favorite to win HQ2, with 2-to-1 odds [31] but, as of January 2018, lists Atlanta and Austin as sharing 3-to-1 odds of winning Amazon HQ2.[32]

Criticism and opposition

Steven Strauss, a visiting professor of public policy at Princeton University[33] and an expert on economic development,[34] in an editorial in USA Today[35] suggested that metropolitan areas should be cautious about bidding too generously to win the Amazon bid. He points to examples where companies have gone bankrupt and/or not followed up on expansion plans and notes that it is possible cities could over pay (the so-called "winner's curse") by providing an overly generous incentive package that turns out to be a money-losing proposition for the municipality if all the promised jobs don't materialize.

Conservative and liberal advocacy groups voiced their opposition to various tax breaks promised by cities in hopes of luring Amazon.[36]

References

  1. 1 2 Day, Matt (September 19, 2017). "Amazon refuses Arizona's cactus as bidders for HQ2 climb to 118". The Seattle Times. Retrieved September 20, 2017.
  2. ↑ "Amazon HQ2". Amazon.com. September 2017. Retrieved September 20, 2017.
  3. 1 2 3 Wingfield, Nick (January 18, 2018). "Amazon Chooses 20 Finalists for Second Headquarters". The New York Times. Retrieved January 18, 2018.
  4. ↑ Brewster, David (October 1, 2007). "Amazon plans a headquarters move to South Lake Union". Crosscut.com. Retrieved September 20, 2017.
  5. ↑ Belko, Mark (October 16, 2017). "Seattle brewed: Amazon's rapid growth transforms a city—but it's complicated". Pittsburgh Post-Gazette. Retrieved October 19, 2017.
  6. 1 2 "Amazon HQ2 RFP" (PDF). Amazon.com. September 7, 2017. Retrieved September 20, 2017.
  7. 1 2 Bhattarai, Abha (September 7, 2017). "Amazon is seeking a home for its HQ2, a $5 billion second headquarters somewhere in North America". The Washington Post. Retrieved September 20, 2017.
  8. 1 2 Day, Matt (October 19, 2017). "Cities crank up publicity stunts as Amazon's HQ2 bid deadline arrives". The Seattle Times. Retrieved October 19, 2017.
  9. ↑ Bomey, Nathan (October 19, 2017). "See the cities hoping to land 50,000 Amazon jobs, headquarters". USA Today. Retrieved October 20, 2017.
  10. ↑ "Amazon HQ2". Amazon.com. October 2017. Retrieved October 23, 2017.
  11. ↑ "Amazon says it received 238 proposals for 2nd headquarters". Las Vegas Sun. Associated Press. October 23, 2017.
  12. ↑ Wingfield, Nick (October 23, 2017). "Amazon Counts Its Suitors: 238 Want to Be Home for 2nd Headquarters". The New York Times. Retrieved January 18, 2018.
  13. ↑ Demillo, Andrew (October 19, 2017). "Little Rock drops Amazon bid in ad: 'It's not you, it's us.'". US News. Associated Press. Retrieved June 24, 2018.
  14. ↑ Alex Zielinski (October 11, 2017). "San Antonio Drops from Race to Become Amazon's Second Headquarters". Rivard Report (blog). Institute for Nonprofit News.
  15. ↑ Wingett Sanchez, Yvonne (September 19, 2017). "Amazon rejects Tucson's gift of a 21-foot saguaro cactus". Arizona Republic. Retrieved October 3, 2017.
  16. ↑ Niesse, Mark (October 3, 2017). "City of Amazon proposed to attract company's HQ2 to Georgia". Atlanta Journal-Constitution. Retrieved October 3, 2017.
  17. 1 2 3 4 5 Liao, Shannon (October 19, 2017). "The eight most outrageous things cities did to lure Amazon for HQ2". The Verge. Retrieved October 21, 2017.
  18. ↑ Demillo, Andrew (October 19, 2017). "Little Rock drops Amazon bid in ad: 'It's not you, it's us.'". ABC News. Retrieved October 21, 2017.
  19. ↑ Schlosser, Kurt (October 23, 2017). "Banner day for Little Rock, Ark., as city flies 'no thanks' message to Amazon over Seattle". GeekWire. Retrieved October 23, 2017.
  20. ↑ Day, Matt (January 18, 2018). "Amazon names 20 finalists in search for HQ2". The Seattle Times. Retrieved January 18, 2018.
  21. ↑ Austen, Ian (January 18, 2018). "Why Toronto Made 'the Playoffs' for Amazon's Headquarters". The New York Times. Retrieved January 18, 2018.
  22. ↑ Rider, David (March 5, 2018). "As we watch Amazon, its 'HQ2' decision-makers are watching us". Toronto Star. Retrieved March 5, 2018.
  23. ↑ Belko, Mark (March 5, 2018). "Amazon HQ2 visits have begun". Pittsburgh Post-Gazette. Retrieved March 5, 2018.
  24. ↑ Cappetta, Michael (May 16, 2018). "Amazon has finished visiting the top 20 contenders for its new HQ". NBC News. Retrieved May 17, 2018.
  25. ↑ https://www.cnbc.com/2018/09/13/jeff-bezos-speaks-at-the-economic-club-in-washington-dc.html
  26. ↑ Mike Rosenberg and Ángel González (August 23, 2017), "Thanks to Amazon, Seattle is now America's biggest company town", The Seattle Times
  27. ↑ Beekman, Daniel; O'Sullivan, Joseph (September 7, 2017). "Amazon's announcement of HQ outside of Seattle sends ripples through state's political circles". The Seattle Times. Retrieved September 20, 2017.
  28. ↑ Gates, Dominic (September 7, 2017). "Amazon plan echoes Boeing's move to Chicago, but differences are crucial". The Seattle Times. Retrieved September 20, 2017.
  29. ↑ Belko, Mark (October 16, 2017). "Moody's ranks Pittsburgh, Philadelphia high on their potential to deliver Amazon HQ2". Post-Gazette. Retrieved October 17, 2017.
  30. ↑ Badger, Emily; Bui, Quoctrung; Miller, Claire Cain (September 9, 2017). "Dear Amazon, We Picked Your New Headquarters for You". The New York Times. ISSN 0362-4331. Retrieved October 18, 2017.
  31. ↑ Smith, Aaron (October 24, 2017). "Gambling site has Atlanta as the favorite in the Amazon sweepstakes". CNN Money. Retrieved October 24, 2017.
  32. ↑ Allison, David; Pope, Colin. "Austin, Atlanta now share 3-to-1 odds of landing Amazon HQ2". www.bizjournals.com. Retrieved January 4, 2018.
  33. ↑ "Steven Strauss". Woodrow Wilson School of Public and International Affairs. August 4, 2014. Retrieved September 24, 2017.
  34. ↑ Leonhardt, David (September 22, 2017). "Opinion | Take That, Jimmy Kimmel". The New York Times. ISSN 0362-4331. Retrieved September 24, 2017.
  35. ↑ "The wooing of Amazon HQ2: Taxpayers, watch out for your wallets". USA TODAY. Retrieved September 24, 2017.
  36. ↑ Wong, Julia Carrie (March 15, 2018). "'Not welcome here': Amazon faces growing resistance to its second home". The Guardian. Retrieved March 15, 2018.
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