By Jack Stubbs
Amazon is on the move.
Seattle’s local tech behemoth sent shockwaves through the city—and, indeed, the nation—last week when it announced an active initiative to create its second corporate headquarters somewhere within the country. With the announcement, the tech giant sent both the local Puget Sound Region and the larger nation into a frenzy, with both tech- and non-tech oriented professionals led to guess what the finer intricacies of the request might reveal.
Amazon is performing a competitive site selection process and is considering metro regions in North America for its second corporate headquarters. The Request for Proposal (RFP) invites its applicants to submit a response in coordination with the metropolitan statistical area (MSA), state/province, county, city, and any other relevant localities involved. The company is encouraging applicants to only submit the sites that best meet the needs of the company as described in the RFP, however, submissions may contain more than one site in more than one jurisdiction.
The RFP is seeking Phase 1 submissions by the October 19th deadline in order to review responses. Sometime in 2018, on an as-of-yet undetermined date, the tech company will make its final site selection and subsequently announce its decision.
My office will immediately begin conversations with Amazon around their needs with today’s announcement
Currently, Amazon’s Seattle headquarters houses 40,000-plus employees spread across 33 buildings with $3.7 billion in capital investment (buildings and infrastructure), and an incredible 8.1 million square foot footprint in Seattle alone, as stated in the RFP. According to calculations on its official web site, the company estimates that its investments in the city resulted in adding roughly $38 billion to the city’s economy from 2010 to 2016.
Indeed, Amazon and the city of Seattle have almost become synonymous over the years, due to the ways in which the tech corporation made its influence known. In spite of the recent RFP announcement, Seattle plans to play just as central a role in the company’s continued expansion, both within the city and beyond. “My office will immediately begin conversations with Amazon around their needs with today’s announcement and the company’s long-term plans for Seattle … I look forward to working with Amazon to secure their long-term, successful future in the heart of Seattle,” Seattle’s Mayor Murray said in a statement released by his office.
Amazon outlined some of the primary financial and operational elements of the RFP, which reflect the long-term impact the company hopes its second headquarters will have. The company expects to invest more than $5 billion in construction costs and capital expenditures, hiring as many as 50,000 high-paying jobs along the way. There will be an average annual total compensation per employee of above $100,000 over the next 15 years once operations at HQ2 have begun. According to its web site, Amazon expects HQ2 to create “tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community.” In the RFP, the company emphasizes its preference for metropolitan centers with upwards of one million people; a “stable, business-friendly environment,” urban or suburban locations that have the long-term potential to “attract and retain strong technical talent;” and, above all, communities with the ability to “think big and creatively” when considering real estate options.
As with any other tech company, geographical location and accessibility is a key concern. Some location-specific priorities listed by Amazon for the potential site include: a 30-mile or less proximity to the population center; a roughly 45-minute proximity to an international airport; a no more than two mile proximity to major highways and arterial roads; and access to mass transit on-site. The initial size requirement for the building is 500,000-plus square feet, and the total square foot requirement is up to 8,000,000.
Currently, Seattle’s compatibility with Amazon is due to a wide range of factors, according to Murray. “[The city] is strong because we have a large, diverse economy. From technology to healthcare and biotech to forestry, major companies like Expedia and Weyerhaeuser call Seattle home—as do more than 700,000 people that make our city a vibrant, exciting place to live,” he said.
Seattle residents will hope that the company does not lose sight of where its roots began, according to Mayor Murray. “Today is an exciting day for Amazon, one of Seattle’s original technology companies and one that has helped reshape our city over the last two decades,” Murray said.
Yet Murray was also quick to articulate the fact that Amazon’s influence extends beyond the corporate headquarters it has built in the city’s downtown core, with South Lake Union in particular having become synonymous with the company’s rapid expansion. According to the Mayor, the tech giant has made its presence known in less tangible ways as well. “Amazon’s work in our community, willingness to invest in the core of our city, and recruitment and development of thousands of talented people have helped Seattle become an international technology and business hub,” Murray added, emphasizing how Amazon’s expansion has allowed Seattle to become a player on the world stage.
Although Seattle’s South Lake Union neighborhood has provided the ideal platform from which Amazon has continually expanded its operations up until now, the ultimate location of the company’s second headquarters is anyone’s guess.
A recent article from The New York Times studied the criteria given by Amazon in the RFP to speculatively narrow down the possibilities of where the HQ2 might be built. By studying Amazon’s first criteria—“areas with at least 1,000,000 where job growth is strong”—the pool of potential locations was narrowed to twenty-five metro areas, including Portland, San Francisco, San Jose, Denver, Dallas, Columbus, Miami, Boston, New York, and Washington, D.C., to name a few. The study also analyzed Amazon’s second criteria, the need for a skilled labor pool that is large and growing. Applying this standard, the pool of possible metros was narrowed to fourteen, including many of the aforementioned cities such as Boston, New York, Washington, Portland, Denver and San Francisco. The case-study also examined the criteria of proximity and accessibility to public transit, a metric that left four cities remaining: Portland, Denver, Washington and Boston. After inserting one of Amazon’s final criteria into the analysis—a willingness to dedicate up to 8 million square feet of office space for the campus—Denver was the final city remaining under consideration.
While the study from the New York Times provides an interesting preliminary investigation into what Amazon’s RFP might yield, the process might not be as straightforward as checking the various boxes in Amazon’s request. According to Seattle’s Mayor, there are more intangible variables that may yet come into play. Concluding his public address following Amazon’s announcement, he approached the conversation from a more political perspective, noting, “We also must know headwinds are coming. Unprecedented growth will not happen forever … And current federal immigration policy makes it difficult for companies like Amazon to do business in the U.S., where they have employees who may not know from day to day whether they will be allowed to stay here.”
Sometime in the New Year, the location of HQ2 will be revealed. But, until then, it seems that Amazon process of finding a new corporate headquarters will continue to unfold.