Amazon’s big competition could deliver for many cities
Shift in thought
Only one location will be chosen as the online giant’s second headquarters. But all the contestants can use the process to think about how they will thrive in the future.
—It’s being compared to bidding for the Olympic Games.
The online retailing giant Amazon set Oct. 19 as the deadline for applications from cities wishing to host the company’s second headquarters, its “HQ2,” as the company is calling it.
The prize for the winning city indeed will be golden: 50,000 new jobs with an average wage of $100,000, Amazon says.
In response, metropolitan areas all over North America have scrambled to put their best offers on the table.
Amazon, based in Seattle, has set out a few prerequisites for bidders: The metro population should be more than 1 million, the airport should have direct flights to key US and international cities, and the mass transit system should be top-notch. Great public amenities, top universities, a reasonable cost of living, and a highly educated workforce will be valued, too.
Amazon has also noted that economic incentives, such as tax breaks, could become a tiebreaker in choosing among the top contenders.
That’s brought some soul-searching among city officials: How sweet do we make our offer without the giveaways exceeding the benefits?
As Amazon’s building boom and expansion to 40,000 employees have taken hold in Seattle, home prices and traffic congestion have soared. Low- and moderate-income residents have been squeezed out. Not everyone is thrilled to be living in the country’s largest company town.
San Antonio Mayor Ron Nirenberg decided earlier this month that his city wouldn’t join in the Amazon bidding war. “We’re just not going to mortgage our future to do it,” he said.
The highest bidder is not guaranteed to win the prize. A city that plays a little harder to get may show a kind of self-confident attractiveness that says “you want to be with me.” In Minnesota, for example, a bid to base HQ2 in the Twin Cities relies on the attractive lifestyle workers will find there – which already has resulted in 17 Fortune 500 companies being headquartered in the state – and is offering very little in the way of financial incentives.
Getting caught up in an irrational bidding war probably isn’t a smart strategy. (See "Amazon’s 50,000 new jobs? Why some cities don’t play tax-break game.") But the effort that dozens of cities have made to put together a bid can be a positive thing. Creating an effective proposal meant bringing together local government, businesses, and civic groups that must set aside differences for the common good.
The effort may have also encouraged a little introspection. What is great about our city or region? Why would someone want to live and work here? What plans are we making to ensure that our city will be even more vital and livable in the future?
In Detroit, nearly 100 consultants volunteered time to help shape the Motor City’s bid. “I’ve never seen a community come together like that,” one local top executive told Axios. The city partnered with Windsor, Ontario, across the Detroit River, to make a joint proposal that touts the advantages both the United States and Canada have to offer.
The competition’s lone winner won’t be known for some time. But the thought that all these cities have put into their efforts needn’t be wasted. These ideas can be put to use making improvements that will attract other businesses and boost the quality of life for residents.
If that becomes the case, the Amazon competition will have many winners, not just one.