With the announcement that Amazon intends to build a second headquarters, just about every governor, mayor and county executive is assembling a plan to attract the company, which intends to invest $5 billion and employ 50,000 workers at the new site.
“We encourage cities to think big and be creative,” the company stated on its Request for Proposal. It requires that the new location be within 30 miles of a city and 45 miles of an airport, and have a mass transit system that extends to the campus.
At its current headquarters, in Seattle, Amazon employs about 40,000 workers. Since 2010, the company says it’s invested $3.7 billion in buildings and infrastructure that have employed about 53,000 addition workers in the city.
But not everyone is convinced Amazon’s presence with what it’s calling HQ2 will be a boon.
Amazon requested information on possible tax incentive packages, stating that “the initial cost and ongoing cost of doing business are critical decision drivers.” Greg LeRoy, the executive director of Good Jobs First, an accountability and development policy group, questioned the rise of “megadeals,” which it defines as $50 million or more.
“Despite a job market and a fiscal climate you’d think would make politicians stingy, these ‘megadeals’ ... show no sign of abating,” LeRoy wrote for City Lab. He pointed to a deal Iowa made with Apple for $213 million — more than $4 million a job — for a data center in Des Moines as evidence of “an asymmetrical power dynamic (in which) companies are free to play states and localities against each other.”
Nonetheless, Illinois has thrown its hat into the ring to attract the online retail behemoth. Here is a sampling of some of the recent reports on the state’s plans:
▪ Chicago is making what Mayor Rahm Emanuel has called an “all hands-on-deck, all-resources-to-bear” effort to attract Amazon, according to the Chicago Sun-Times. The paper found six sites that would make sense to put HQ2, but the mayor wouldn’t comment on any of them. The locations offer a variety of campuses, including horizontal or vertical ones, but Emanuel said his priority is simply getting the company to choose the city.
▪ The Chicago Tribune editorial board is “demanding” that Springfield help Chicago get HQ2, but the newspaper acknowledges that an unfunded pension liability of $130 billion may create enough uncertainty in state taxes to sink the deal. Chicago is home to top-flight universities, law firms and cultural opportunities, but “(companies) hate the uncertainty of operating in a state where they can’t calculate their projected taxes,” the board wrote.
▪ In addition to Chicago, Rauner stated he is also open to working with the St. Louis region to attract some of the jobs to the metro-east in an apparent effort to keep downstate voters happy as he heads into a reelection campaign in 2018. “As governor of the entire state of Illinois ... we have major strategic transportation advantages in metro-east around the St. Louis area,” Rauner said. Some city and state officials will be making a trip to the Seattle headquarters to learn what items the company is looking for, but the entourage will not be meeting with company staff.
▪ In the metro-east, St. Clair and Madison counties have also charged into the competition for HQ2. “I have spoken with several of our cities ... regarding their potential sites. But independent of that I can also confirm the county will be submitting a site to Amazon,” said Terry Beach, the economic development director for St. Clair County. Walt Williams, the economic and community development director for Edwardsville, which is home to two Amazon warehouses, said that local leaders will be meeting with county and state officials to discuss how to attract HQ2 to Madison County.
▪ The St. Louis Economic Development Partnership will submit a plan on behalf of the city of St. Louis and St. Louis County, according to the St. Louis Post-Dispatch. Although possible site locations and incentive packages weren’t made public, even the Cardinals got into the lobbying action, posting to Twitter a picture of Ballpark Village as a possible headquarters. “St. Louis needs to show a singular face and be forceful about it and brag about the fact that we can do this,” said Bob Lewis, who heads the St. Louis-based consulting firm Development Strategies.
More than 100 cities are attempting to sway Amazon, according to Seattle Times reporter Matt Day. They include cities as different as Toronto to Little Rock, Arkansas. One in Arizona was so excited that an economic development center kicked off its courtship by sending a 21-foot cactus, but Amazon declined the gift.