Amazon’s high-stakes bidding for HQ2 is going to break plenty of hearts. But can cities and states ultimately learn from it? Competing for the high end of the innovation economy requires a different toolbox than cheap land and housing or abundant freeways.
With at least 130 locales competing to land Amazon’s HQ2 — in Jeff Bezo’s words “a full equal to our Seattle headquarters” — one has to wonder what happens to the scores of losers?
The day after the site of HQ2 is announced should be enough time to process the defeat. What happens after that may be an angry shout from sea to shining sea, but I suspect the residents of those cities or states will keep on hitting the “Place your order” button on Amazon. The more interesting question is whether HQ2 marks a turning point of some kind.
I know that many Seattleites blame Amazon for every growing pain or social ill here. Among these, many wish Amazon had put its headquarters elsewhere — out in the suburbs or even in another state. This is the magical thinking of a very spoiled, blessed city.
Seattle never saw virtually all of its local headquarters lost to mergers or Wall Street greed, to be replaced by … nothing. Never had its legacy industries eliminated and good jobs go from abundant to rare. It didn’t become one of so many places that towered in mid-20th century America’s economy but now depend on health care, a military base, a casino or a prison.
Amazon’s HQ & HQ2
- Amazon names 20 finalists in search for HQ2
- A not-so-short HQ2 shortlist, and other take-aways from Amazon’s finalists
- 2 kinds of cities made list of finalists for Amazon HQ2
- See how the 20 Amazon HQ2 finalists compare, and vote on your choice
- Amazon receives 238 bids for its second headquarters
- Cities are free to discuss Amazon HQ2 bids, but many won’t
- Amazon’s surprise plan for HQ2 is a bold experiment
- Thanks to Amazon, Seattle is now America’s biggest company town
- Read more about Amazon and its HQ2 plans.
Those places know better. They’re not convinced by warnings from some here about the changes HQ2 would bring — partly because their low wages make affordability a problem already, and partly because they never were the idealized Seattle of nostalgia.
Hence the gold rush mentality for Amazon’s promise of 50,000 high-paid jobs and $5 billion in investment.
They feel a fierce urgency to bring in the biggest single economic-development win in memory. One that would reverberate to small businesses, contribute to tax coffers at least on some level, and put this place on the map as the place to be.
They don’t have the luxury to meditate on how much Amazon has contributed to the decline of local businesses — or whether to blame that on changing consumer tastes, industry consolidation or a combination.
Their local leaders can’t afford to waste time with hypotheticals, such as how a company like Amazon having such enormous economic power is ultimately bad for the economy, and even for American society. How would not competing for this prize turn the clock back to 1970?
Thus, The New York Times wrote a story headlined, “Nothing is too strange for cities wooing Amazon to build there.”
For example, Tucson uprooted a tall saguaro cactus to send it to Seattle (Amazon declined but thanked the Arizona city on Twitter). Hundreds of Wharton business students are assigned pitching Philadelphia to the company.
“It’s like ‘The Amazing Race,’ ” Jim Watson, the mayor of Ottawa, Canada, said. “You’ve got this cast of characters running toward the Holy Grail.”
But let’s get real.
Based on Amazon’s request for proposal (RFP) and what we know about both Bezos’ preference for cities and the kinds of places high-skilled techies seek out, HQ2 is not going to Gary, Ind., or Dayton, Ohio. Amazon is not running a charity.
It does want a metro of 1 million or more, a development-prepped site, high quality of life and “a stable and business-friendly environment.” (The latter may be a dig at Seattle).
Interestingly, the RFP indicates the HQ2 site could be similar to the Seattle headquarters and an urban or downtown campus, “but does not have to be.”
Yet this doesn’t open the door to what urbanist Jim Kunstler would call happy motoring America. The RFP specifies mass transit at the HQ2 site, and I doubt that means a bus every 30 minutes.
And, of course, Amazon wants bidders willing to pay to play, with tax incentives.
The New York Times narrowed the candidates down and came up with finalists of northern Virginia near D.C., and Denver, with the ultimate nod to Denver. I was there last week — as an alumnus of the Rocky Mountain News, I consider it an adopted hometown — and the Mile High City would be a great pick, an excellent fit.
I’ve also said Dallas-Fort Worth could be a contender (Big D has the largest light-rail system in America). And Toronto works if Amazon wants to hedge its bets in an uncertain America.
But back to the losers.
Lessons can be learned.
For example, competing for the high end of the innovation economy (as opposed to Amazon warehouses) requires a different toolbox than cheap land and housing and abundant freeways. This matters because tech has been the one sector that has grown steadily in recent decades, especially since the Great Recession.
That toolbox requires a strong research university, decent funding for K-12 education, mass transit and attention to quality of life, including the urban fabric sought by many tech-skilled millennials and empty-nest boomers.
Throw in good connectivity — from broadband to airport to international ties. And don’t forget tolerance and diversity, desired by the workers that scholar Richard Florida dubbed the creative class.
Unfortunately, many of these assets are among the most politically charged and difficult lifts for cities.
Even Austin can’t pass light rail despite being the bluest city in Texas, and suffering ever-worsening traffic congestion.
If you’re still with me, you may be wondering what would have happened if no city, county, region or state had responded to Amazon’s RFP?
If they would have boycotted specifically because of exhaustion over corporate blackmail to move everything from factories to pro-sports teams unless a place comes up with enough incentives. And the price always keeps rising.
In other words, a 21st-century American version of the 1970 film (and anti-Vietnam War bumper sticker), “Suppose They Gave a War and Nobody Came?”
It’s a delicious thought. But, unlike in Seattle, leaders in most cities are desperate for good jobs. They will always show up. And corporate America knows it.