Experts speculate on Amazon’s HQ2 pick
Front-runners
Moody’s Analytics Mark Zandi, along with colleague Adam Ozimek, lined up 29 sets of data designed to match Amazon’s preferences for its second headquarters, the Seattle Times reported.
To gauge a city’s business environment, Moody’s weighed things like metropolitan credit ratings, tax systems and employment growth rates. For quality of life, they used measures of the school dropout rate and arts establishments per capita.
Shake the cocktail, and Austin, Texas, came out No. 1, lifted by a low tax rate and strong job growth. Perhaps a surprise at No. 4: Rochester, N.Y., highly rated for its low costs of living and doing business. (The city is submitting a joint bid with neighbor Buffalo.)
Austin also is on a list of likely HQ2 homes compiled by business news website Business Insider. The others? Atlanta; Cincinnati; Memphis and Nashville, Tennessee; Pittsburgh; Columbus, Ohio; and Denver.
The sweepstakes
The company has not specified which cities or metro areas are among the 238 that have applied for its $5 billion HQ2 project, but many of the locations have made their interest public. However, Amazon’s bidders include most of North America’s largest cities, from Los Angeles to Chicago and Toronto, and some seen as long shots, such as Greensboro, North Carolina, and El Paso, Texas.
The company said the proposals came from 43 U.S. states, Washington, D.C., and Puerto Rico, as well as three Mexican states and six Canadian provinces.
The seven U.S. states that Amazon said did not apply were: Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont and Wyoming.
Ahead of the deadline, some cities turned to stunts to try and stand out: Representatives from Tucson, Arizona, sent a 21-foot-tall cactus to Amazon’s Seattle headquarters; New York lit the Empire State Building orange to match Amazon’s smile logo; Kansas City Mayor Sly James purchased 1,000 items on Amazon.com and rated them all five stars.
The wish list
Besides looking for financial incentives, Amazon has stipulated it wants to be near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport with daily direct flights to Seattle, New York, San Francisco and Washington, D.C.; have direct access to mass transit; and be able to expand that headquarters to as much as 8 million square feet in the next decade.
It would prefer a diverse city with good schools, first-rate universities and an educated labor pool, abundant recreational opportunities and “an overall high quality of life.”
Amazon also says it is looking for a “stable and business-friendly environment and tax structure” – including incentives to offset its initial capital outlay and ongoing operational costs.
The downside
As Seattleites will say, keeping up with the Internet juggernaut has not always been easy, providing a word of caution for officials from other cities willing to pursue the company at great expense.
Over the past decade, Amazon and its founder, Jeff Bezos, added new products and business units at a breakneck speed and expected public partners to keep pace. In Seattle that meant rehabbing an area of more than 350 acres at a cost of hundreds of millions of dollars in ongoing transportation and infrastructure upgrades, expanding public transit, road networks, parks and utilities, the Seattle Times reported.
It also put new strains on housing. Seattle is one of the most expensive places in the United States to live, forcing lower-income residents to move to far-off suburbs and prompting the city and surrounding King County to declare a state of emergency in 2015 over homelessness.
Since then, the problem has worsened. Rents in King County have more than doubled in the past 20 years, and gone up 65 percent since 2009. Seattle spends more than $60 million annually to battle homelessness, up from $39 million four years ago.