The bids are in and Amazon will reveal its choice for a second world headquarters in 2018. The winning city will enjoy the spoils of 50,000 new jobs averaging $100,000 a year in annual compensation along with all the residual economic benefits those jobs afford. The first jobs won’t arrive until 2019 though, and the vast majority not until “beyond 2027” according to Amazon’s request for proposal (RFP).
What are Atlanta’s chances? Handicapping it is difficult because Amazon has not said what the purpose of HQ2 is but if it’s related to logistics, Atlanta – a logistics heavyweight – would be the logical choice. It has the world’s busiest airport and is one of the nations most significant confluences of rail and highway networks. Atlanta also ranks highly for its skilled technology workforce (an Amazon prerequisite), research institutions (Georgia Tech), existing and planned public transportation infrastructure, and conducive business climate including generous tax and other financial incentives although the Atlanta/Georgia bid was not among the top 20 in financial incentives offered to Amazon.
The RFP is curious: Amazon is looking for a metro area of at least one million people (Austin, the front runner according to Moody’s, had a population of 1.7 million as of the 2010 census). Amazon also specified significant greenfield or brownfield space to accommodate its $5 billion investment in eight million square feet for HQ2. It also wants a building site that is within 30 miles of an urban core and with public transportation connectivity. Austin’s Round Rock area, home to Dell, has lots of such greenfield space, a rail line to downtown Austin, and is 21 miles from the city’s center. Other requirements include being near a strong university system and within 45 minutes of an international airport (again, Austin has both: the University of Texas at Austin is considered a “public Ivy” and Austin-Bergstrom International Airport has some of the longest commercial runways in the nation and an well-anticipated expansion program). Oh, and last but not least: the international business community considers Texas as the most business-friendly state in the U.S. Texas was also fifth among all bidders in incentives with nearly $70 million offered.
Last but not least, Amazon’s founder, Jeff Bezos, has deep Texas roots and a 25,000-acre ranch in West Texas (he is said to be among the state’s largest landowners). In recent years, he and Amazon have built a wind and a pre-orbital facility there and Amazon purchased Austin-based Whole Foods earlier this year. Finally, Austin, known for its music, outdoor recreational opportunities, and hippie slogan, “Keep Austin Weird,” probably has more in common with the location of Amazon’s original HQ – Seattle – than does Atlanta. Frankly, the bidding process may just have been a money grab by Amazon to bargain as many incentives as it can from Austin government officials.
In making Atlanta’s bid, mayor Kasim Reed said the economic incentive package to Amazon was the most aggressive the state had ever put forward and called winning HQ2 an “Olympics moment,” referencing Atlanta’s drive in the early 1990s to win the bid to host the 1996 Olympic Games. This time around, it may be Austin’s Olympics moment.
UPDATE: At least one Atlanta news outlet suggested that adding 50,000 Amazon employees would be “bad for renters and first time home buyers” because “prices at the lower end of the market are already rising faster than wage increases,” but that line of thinking ignores the fact that all 50,000 “Amazonians” would not be in place for 10 more years and that the Atlanta area already accommodates 70,000 new residents every year. The article also pointed to Atlanta’s affordability problem by citing a rise in the median Atlanta home price of 37 percent but neglected to note that percentage tracked from the bottom of the collapse in home prices (2013); the average Atlanta home price has risen just five percent since July 2006 according to FMLS.
UPDATE: It has been suggested that Amazon could split up HQ2. Again, Amazon’s RFP is curious in that it indicates a need for 500,000 square feet of space in 2019 and the rest (eight million square feet) “beyond 2027.” A possible theory floated: Atlanta could get the logistics component of HQ2 (assuming there is one) and another city, presumably Austin, could get everything else. An Irish bookmaker has Atlanta and Austin as the equal front runners for the whole shooting match.
UPDATE: The Wall Street Journal makes some good points for some of the major cities in the running such as Boston, Toronto, and Washington, D.C. (Bezos has a home there too) but does not mention Atlanta – only the offer by Stonecrest in DeKalb County to de-annex 345 acres and call it “Amazon.” The article also indicates Amazon’s $5 billion investment in creating HQ2 will be over 20 years, not 10 as suggested in the RFP. Additionally, the WSJ reports that Arkansas, home to Amazon chief competitor Wal-Mart, is one of seven states that didn’t submit a bid. The city of Little Rock created a campaign, “Hey Amazon, it’s us, not you,” to show allegiance to Wal-Mart. The WSJ quoted Little Rock Mayor Mark Stodola as saying, “we decided that we would break up with them before they broke up with us.”
UPDATE: Moody’s rankings shine the light on a state that hasn’t gotten a lot of publicity elsewhere: Pennsylvania. Moody’s analytical-driven scoring has Philadelphia and Pittsburgh ranked in the top 10 most suitable destinations and Philadelphia comes out on top when certain variables are tweaked.
UPDATE: An article by Bisnow on Nov. 3 about an anonymous permit filed on Oct. 30 (12 days after proposals were due to Amazon) to redevelop “The Gulch” property next to Philips Arena in downtown Atlanta into more than nine million square feet of office space, one million feet of commercial space, 2,100 apartments and 1,500 hotel rooms, seemed to give rise to hope that either the City of Atlanta, the State of Georgia, or Amazon itself have already targeted a location for HQ2. The Gulch does fit the bill on a number of site-specific requirements in the RFP such as connectivity to a variety of forms of transportation and nearby existing office infrastructure, but one key requirement – a site of at least 100 acres – is almost too perfect: The Gulch is exactly 119 acres. However, the Bisnow article also noted Atlanta Hawks majority owner Tony Ressler and CIM Group, a Los Angeles-based “full service urban real estate and infrastructure fund manager” have previously proposed a $1 billion mixed-used development (perhaps on behalf of Amazon) and the state has long floated the idea of a multi-modal transportation hub there.
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Beacham & Company, REALTORS is uniquely positioned to assist with the possible location of Amazon HQ2 to Atlanta. The firm’s agents are the top selling in the city and they specialize in all parts of the “urban core” that Amazon ideologically cherishes. Beacham’s local roots also make it a company that Amazon employees can trust with an intimate knowledge of the city. Beacham is affiliated with the largest and top selling international real estate – Leading Real Estate Companies of the World – and routinely partners with dozens of third-party relocation firms who move employees to and from Atlanta every year.
