x

Abu Dhabi, UAEThursday 21 June 2018

Amazon HQ2: North American cities scramble for a slice of the online empire

At stake is a chunk of Amazon’s massive worldwide online empire as it looks for a second base

Amazon announced that it had narrowed its hunt for a second headquarters to 20 locations, concentrated among cities in the US East and Midwest. Elaine Thompson / AP Photo
Amazon announced that it had narrowed its hunt for a second headquarters to 20 locations, concentrated among cities in the US East and Midwest. Elaine Thompson / AP Photo

Business leaders in Calgary offered to change the city’s name to Calmazon. An economic development group in Tucson, Arizona, tried to deliver a seven-metre seguara cactus to the Seattle office of Jeff Bezos, chief executive of Amazon, while mayors across the US put together packages of tax breaks and infrastructure investment.

On Thursday, cities across North America discovered whether their headline-grabbing stunts and hard-headed business cases had been successful as the online retailer Amazon announced its shortlist for the company’s second headquarters.

Perhaps unsurprisingly Calgary and Tucson failed to make the cut. But alongside the obvious contenders such as Dallas, Philadelphia and Atlanta, with their well-educated metropolitan populations and transport links, stand outsiders such as Columbus, Ohio, Nashville and Raleigh, North Carolina.

At stake is a chunk of Amazon’s massive worldwide online empire.

When it announced that it was looking for a second base to operate alongside its existing HQ in Seattle, the company said its decision would be worth 50,000 high-paying jobs to the winner.

The result was an extraordinary scramble as civic leaders and chambers of commerce launched PR campaigns to win favour with Amazon. Some 238 applications were submitted from cities across the US, Canada and Mexico.

Holly Sullivan, Amazon’s head of economic development, said: “Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity.

“Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

It is easy to see why so many locations applied. Amazon says HQ2, as it has been dubbed, will be a full equal to its existing corporate centre. It will cost some $5 billion (Dh18bn) to build and operate – a valuable injection of cash to any local economy.

_____________

Read more:

Apple to make $38bn one-time tax payment, open new US campus

Amazon chief Jeff Bezos’s net worth tops $105 billion

_____________

And by way of example, its prospectus estimated that its investment in Seattle since 2010 was worth an extra $38 billion to the city.

The company offered little detail on how it selected the finalists but said it was based on criteria laid out earlier in the search, such as proximity to an airport, good public transport and ability to attract a well-educated tech workforce.

It says it will make its final decision later this year.

With that sort of money at stake, it is no wonder that cities the length and breadth of three countries vied to make the splashiest bid.

Stonecrest, in Georgia, voted to offer to give up a plot of land that would be renamed the city of Amazon.

“There are several major US cities that want Amazon, but none has the branding opportunity we are now offering this visionary company,” said Jason Lary, the mayor, at the time. “How could you not want your 21st-century headquarters to be located in a city named Amazon?”

Stonecrest (whose population at 50,000 is about the same as the number of jobs Amazon says it will create) did not make the shortlist.

The mayor of Kansas City took more of a DIY approach, giving five-star reviews to random items on the Amazon website and used each one to advertise the city’s attributes.

For example, Sly James gushed about the properties of a backpack decorated with the face of a horse before seguing to his city.

“The 3D-simulated animal face pattern is so realistic, it looks like the stallion is charging right at you if you were to look over your back and at a mirror at the same time,” he wrote. “I bought one for myself and one for all the art students in Kansas City, which ranks third-most in participation per capita in the country.”

Such enthusiasm and creativity was not enough to win a place on the list.

An economic development group in Calgary, Alberta, paid for a full-page advertisement in The Seattle Times in which it offered to wrestle a bear for Amazon. Like other stunts, it was also paired with a more sensible message that highlighted Canada’s more liberal immigration policies and universal health care.

Other offers were equally imaginative, if based more on business considerations.

So although Philadelphia’s pitch included dozens of letters from students at the city’s elite Wharton Business School, its mayor also offered to overhaul the local tax system.

Philadelphia made the list, one of nine East Coast cities that were successful, along with locations in the South and the mid-West.

The full list is as follows:

Atlanta

Austin, Texas

Boston

Chicago

Columbus, Ohio

Dallas

Denver

Indianapolis

Los Angeles

Miami

Montgomery County, Maryland

Nashville

Newark

New York

Northern Virginia

Philadelphia

Pittsburgh

Raleigh, North Carolina

Toronto

Washington, DC