Amazon announced yesterday its plans to open a second company headquarters in North America. The retailer said the project—known as “Amazon HQ2″—would cost more than $5 billion and would include as many as 50,000 high-paying jobs.
EDCs across the country are itching with anticipation, and the company opened the HQ2 Request for Proposal with more details on its site selection criteria. Amazon said it is interested in metro areas with more than 1 million residents, a stable and business-friendly environment, locations with the potential to attract strong technical talent, and communities that “think big and creatively” with their locations and real estate options.
Amazon said in the RFP document that the site will need to be close to a population center that offers a highly-educated labor pool and a strong university system. The company is also considering logistics such as travel time to major highway corridors and arterial roadway capacity along with an international airport with direct daily flights to Seattle, New York, San Francisco, and Washington, D.C. “We expect HQ2 to be a full equal to our Seattle headquarters,” said Jeff Bezos, Amazon Founder and CEO. “Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”
Amazon didn’t name any potential locations, but according to the most recent census data, there are approximately 50 metro areas with a population of at least 1 million. Analysts at MarketWatch identified 12 cities as “possible locations” based on their perception of Amazon’s selection criteria. These included Bridgeport, CT, Provo, Utah, Washington, D.C., and Tampa, Florida.
“Unlike more established markets where they could get lost in the shuffle, it could be a game changer for a community like tampa and I think with our infrastructure and talent, we now compete favorably for headquarter projects.”
Craig Richard, CEO of the Tampa Hillsborough Economic Development Corporation, told Chief Executive that while EDCs typically won’t comment on open projects, it’s likely that all those who fit the bill will be participating in the RFP process. “There isn’t an EDC in the country that wasn’t excited to hear this news,” Richard said.
Tampa has been striving to attract a Fortune 500 headquarters to its downtown region for some time. Billionaire and former mutual fund manager Jeffrey Vinik started investing in the city in 2010 and is currently working on a $3-billion work-live-play development along the city’s waterfront. Vinik said in an interview with Chief Executive in February that the city has “tremendous potential” and that its talent, universities, quality of life and low costs made it well-positioned as a corporate headquarters. Tampa is currently one of the country’s fastest-growing cities in the country.
“Unlike more established markets where they could get lost in the shuffle, it could be a game changer for a community like ours and I think with our infrastructure and talent, we now compete favorably for headquarter projects,” Richard said.
Atlanta also has potential and has been growing as a home for Fortune 500 companies. In 2015, the city landed the new headquarters for Mercedes Benz USA, and it was a top contender last year for General Electric’s new headquarters. The Atlanta Business Chronicle notes that the company is already building two tech offices there.
Analysts say that while many bigger cities such as San Francisco and Boston meet the requirements, they also come with high costs of living that can impact quality of life and the ability to attract and retain talent. There are already trends of tech-based companies moving from higher-cost markets to places like Austin, Raleigh and Denver.
David Maahs, executive vice president for the Greater Des Moines Partnership, said even regions that fall under the 1 million population limits may still submit a bid. Maahs believes the company already has a dozen or so locations in mind, but is engaging in an RFP process to “level the playing field” and be transparent. It also could be a way to get cities to compete on incentives. “They’re going to get flooded with RFPs. Our region is about 750,000, but we’ll probably submit a bit like other markets of our size likely as a hail mary or long shot,” Maahs said.
Wherever it is located, a project of this scale has the potential to spin off tens of thousands of other jobs and billions more dollars in economic activity. Amazon estimates that its investments in Seattle resulted in an additional $38 billion in economic activity between 2010 and 2016. The company said this equated to generating $1.40 in activity for every dollar it invested in the region.
Amazon is seeking proposals with potential sites, a summary of incentives, a timetable for incentives, labor and wage rate information, available programs and partnerships with educational institutions, and quality of life information. The response deadline is October 19, 2017 and final site selection and announcement will be made in 2018. “We want to invest in a community where our employees will enjoy living, with recreational opportunities, educational opportunities, and an overall high quality of life,” the company said.