I think Philadelphia is a good choice. Center City is a 30 minute drive to Philly international airport. Land is relatively cheap, much cheaper than NYC, Boston, or dc. We have an ivy league school in the city, with another less than an hour away, as well as many other schools in the area. We have a large metro population with a good size technical and business industry already. We also have rail and sea shipping available. and there is also a convenience factor being nearby to NYC and DC both being a hour and a half train ride.
The Navy Yard literally ticks every box of their requirements:
30 Mile proximity to population center: It's IN the city.
45 Minute proximity to international airport: It's about 15 minutes drive from the airport, or you can take mass transit.
1-2 Miles from Major highways: It sits basically ON I-95
Close to Major arterial roads: Within 10 minutes of 295, NJ Turnpike, I-76
Access to mass transit at site: Bus routes to site, subway stop a 5 minute shuttle ride from site
500,000 sqft of development space: Currently prepped for 4,000,000 sqft of office development, shovel ready
Up to 8,000,000 Sq Ft of Development space beyond 2027: 13.5 Million square feet of space at full build out.
Literally every box ticked, in a tax haven. The city could justify a BSL expansion to the Navy Yard with this sort of development, so they could throw that in as a deal sweetener.
There is also the Schuylkill Yards district in planning which would involve capping the train yard next to 30th street station. Both Schuylkill Yards and the Navy Yard have master plans in place, and the Navy Yard is ready for this basically day one. Both are Keystone Opportunity Zones and have abatements on almost all state and local taxes.
The problem with Philadelphia is it's got too many poor people. There is a significant amount of crime, a lack of available housing, and a lack of land that would be easy to develop. Trying to acquire and develop land in Philly runs into problems of reducing the amount of affordable housing.
The city has advertised for bids multiple times to develop new properties, and only one or two people will bid. When someone does bid, it is for ten times the cost of other similar private development, and with many fewer available units than needed. And of course, there is already no parking, and parking garages are being demolished regularly in center city to be replaced with high priced rental units.
Assuming you got the space for your HQ and finished construction within a few years, where are your young tech people going to live? Out in the suburbs on regional rail, away from the amenities in the city? Gentrify a few more neighborhoods and build more ugly cubic-modern apartments?
I just don't see where they'd put all those new people.
I don't understand how Philadelphia is not near the top of the list. The cost of living is way lower then any other top 10 metro area, There is a huge local talent base, and lots of highly ranked feeder schools.
Where are you getting your numbers from? Philadelphia's cost of living is higher than say.... Dallas (And Houston And Austin). Plus DFW metropolitan area is the 4th largest in the US (7.2 million) whereas Philly is 7th (6 million).
Sorry..I couldn't resist using Dallas as an example considering it is American Football season.
These are the American cities which you can fly to and from Shanghai nonstop: Chicago, Dallas, LA, NYC (+Newark), San Francisco (+San Jose), Detroit, Seattle, Boston. Atlanta starting next year. In Canada there's Toronto, Vancouver, and Montreal.
Philadelphia is an hour by train to Newark Airport, which does non-stops to Beijing. It's not as ideal as it being in the local airport, but it's also not that far away.
Any development Amazon did would be in KOZ (Keystone Opportunity Zones) which have existing tax abatements on most forms of taxes. Comcast was the initiator and argued for those tax incentives, so you know they've got to be pretty good. That means no fighting with state or local legislatures as the tax incentives are in place. Amazon would automatically qualify since they would be coming in from out of state.
And if Amazon attracts enough talent to turn Philly into a tech hub then PA will have all the same "one city runs the show and the rest of the state resents them" dynamic that NY and IL do.
I find it interesting how many of these comments are sales pitches for their chosen cities. I don't have any preferences, since I have no desire to work for Amazon nor do I think my current city of SF is a good choice for reasons laid out in the article.
What I'm most interested in, however, is how you get around some of these problems. The article points out a number of issues:
Can even Amazon afford to pay 50,000 people on a New York or SF salary? That's going to be (almost) prohibitively expensive. They certainly can pay for a Michigan salary or an Alabama salary, but is the job market there in those places? The Philadelphia example from the beginning points out that while the city is large enough, the job growth hasn't been there for quite some time, implying that there might not be enough people to fill the needed jobs.
Could a city like Birmingham, AL or Gary, IN or Lincoln, NE support 50,000 new jobs? Are there enough available homes to house all those people? Parking spaces? What about the support jobs? For every N employees, you need M doctors or dentists or accountants or fast food workers or maids or auto mechanics to support the growing population. Are those jobs there? Are there people qualified to take those jobs? Can the new traffic be handled smoothly? I think the answer is "yes" to the above in the long term, but is Amazon going to put their HQ in an up-and-coming town and just deal with the growing pains in the short term? Or would they rather go to a larger city and skip those problems?
What about international airports? That limits it to a dozen or so cities around the country. Can Amazon survive in a place like Nashville, TN? Why or why not? Are there ways to mitigate potential problems of not being able to fly to London or Paris direct?
IMO, the potential cities themselves are much less important and much less interesting than the problems that moving a 50,000 person HQ to almost any city would cause.
How much are you assuming these 50,000 are going to be paid? Even at a very generous $200k/year all-in (cash+cost of benefits) average (they aren't all going to be highly paid engineers or executives) that's "only" $10bn/year. It's steep, but would amount to only about 6% of their annual revenue.
Some of that 50,000 is likely to be transfers and lower wage employees.
It's not so much what they get paid as how much they could save by going elsewhere. If you imagine a generous 200k/year average in SF or NYC, you can also imagine that it wouldn't be 200K in a place like, say, Des Moines, IA or Detroit, MI -- it might be closer to a generous 100K average, saving them $5bn/year -- or fifty percent cheaper. Just made up numbers, but it illustrates the point. If salary were the only criteria and Bezos went to the board and said, "Which would you rather pay, $10bn/year or $5bn/year for salary?" it's pretty obvious which one the board would pick.
Even a janitor or desk assistant is paid more in SF and NYC than they are in Charleston, SC, so the principle applies even for low wage workers.
(Now obviously, the criteria is more than just salary, so the above is an oversimplification.)
That overlooks another aspect: what happens to a city when 50,000 new people show up likely making more than the average of that city? Do we get inflation? Do we have a housing crisis where all the nice houses are bought up and even the mediocre neighborhood property values skyrocket? Does gentrification become a problem? If you think "it's just 50,000 people and it's just one company," you'd be right -- but don't you think whatever city Amazon chooses is going to have a tech boom? There will be more tech jobs generated, leading to higher salaries and more expensive houses and... and... and...
I think the peripheral side effects of such a move are much more interesting than the move itself. The salary thing, sure, you're right. It's only 6% of their income. But what happens if the move causes unimaginable traffic congestion or significantly increases the homeless population or puts a strain on local preschools. Fifty thousand people? Let's say a third of them have 1 kid -- that's ~17,000 to add to the local school systems! We need more teachers! We need more buses! We need more textbooks! Instant crisis!
(I exaggerate, but still...)
That's the kind of stuff I find to be fascinating.
I think you are getting unfairly downvoted here. Clearly low-lying land is a serious concern for any entity with a long-term planning horizon. Most floodzone land should be left for low development, such as farming.
Yup. Why would anyone choose to build headquarters in a place that blatantly disregards dire existential threats to its people and economy with demonstrably catastrophic results?
Seems like Denver would be good choice, considering how alike Seattle and Denver are. There's plenty of hiking, biking, camping, etc in the area, and it's central location is convenient for any travel to both the east and west coast.
Denver also has an excellent craft brewery scene. Denver / Boulder are already tech hubs in their own right as well.
Tons of sunbelt and non-coastal cities have spent decades optimizing for cheap land and making themselves "business friendly" over all other concerns.
They still don't have much of a tech scene or high impact industries. And the same calculus that has prevented a mass migration of tech companies to Boise or Waco is the same calculus that will prevent Amazon from moving there either.
My bet is Boulder; the Research Triangle; or Philly.
Boulder is too small. The whole city only has a 100,000 now. It's got a greenbelt and height restrictions, so you can't build it out much more. And there's very little regional mass transit to get people into and out of the residential areas beyond the greenbelt. There's nowhere to put another 50,000 families. Plus it is on the wrong side of Denver from the airport.
Denver or one of its suburbs would be a decent choice, but not Boulder.
Agreed, and I've personally noticed a lot of people moving out to the Denver / Boulder area. On my team alone we had 3 people from the bay area move out to Colorado. It's an attractive place for tech talent, which certainly wouldn't hurt Amazon's cause.
He needs to add Detroit to his list. Amazon already has two large warehouses and a small developer office there. The only negative on the list is a less than overwhelming public transport system.
But they've got lots of cheap land, and both an international airport and an international border as well as three world class universities within an hours drive. Not to mention a metro area with a population of 4.5 million.
My impression of Detroit is that it's a bunch of pretty nice suburbs clustered around a sucking chest-wound of a city. Some areas are flat out depopulating. The government pays to demolish abandoned buildings so they don't become firetraps.
It's reasonable to look at their RFP as a wishlist (like all RFPs). My guess is that something like good public transit will have to give among all the attributes that they'd prefer (including cost).
Seattle weather is actually pretty good. You don't need much AC in the summer (these last couple of weeks being an exception), and it hardly ever gets cold enough to snow in the winter. There is rain, but being able to keep your window open year a.round is great for fresh air at least.
For those that don't know Minneapolis like the parent commenter and I do:
- Amazon already has an engineering office in Minneapolis. Check out some of the jobs here.
- Amazon has a fulfillment center in Shakopee, MN -- a third ring suburb ~30 miles away from Minneapolis.
- This is mostly anecdotal on my part, but it's pretty typical for top computer science students at the University of Minnesota to go to Amazon / Microsoft in Seattle. Silicon Valley doesn't seem to bother recruiting in Minnesota, but Seattle-based companies seem to have good luck recruiting out of Minnesota -- where the weather is even worse.
- Minneapolis has the headquarters of some of Amazon's biggest "old retail" competitors -- Target and Best Buy. A large Amazon presence in Minneapolis would go a long way to poaching the top 10% of talent at both companies.
- Minneapolis also has a small but promising tech community. BuzzFeed and a few other tech companies have an engineering office in Minneapolis.
That's a common theme parroted by many, and a lot of ambitious people do indeed move to the coast. However, I think you are underestimating the amount of ambitious people in minneapolis and the surrounding area. We have tons of fortune 500 companies here and lots of world class smart ambitious people.
Not everyone is a 20 something who has no family obligations and is willing to go work anywhere in the country. Furthermore, in minneapolis we have very high salaries relative to cost of living. If you make 120k here you're basically rich and can save an enormous amount per month. This kind of salary to cost of living ratio allows an ambitious person to save tons of money each month and invest it how they please.
Anyhow, I don't think minneapolis is a long shot. We have a very good economy and infrastructure and lots of people doing smart/ambitious things.
It's interesting, because they really need to pick a city that won't have trouble attracting software developers. Some large companies (like Epic) have trouble recruiting and have to pay people way more because they're so far away from normal tech hubs.
I think Epic also has trouble recruiting because they work on an outdated stack using an arcane (and often counterintuitive) programming language for an industry that is itself probably a few decades late to any tech (probably for good reason, but the point stands).
Epic doesn't pay very well even for the area. Their problem isn't just location, it's reputation: terrible technology, terrible working conditions, and a possibly dated reputation for a proclivity to hire junior devs and chew them up in a way that would make a AAA game studio envious.
They continue along because, like most other places that aren't major tech hubs like SF, Seattle, NY, or Chicago, software developers who decide to settle there simply don't have many alternatives.
I think Toronto came first in their final list for a reason. It's a way to hedge against US immigration policies and also for Jeff Bezos to thumb his nose at Trump.
City proper - outside of the lakefront - is not prohibitively expensive either.
But I'm just weirded out by how the article discounts Chicago based on assumptions about, what, tax policy? Where is this coming from? The Rahm is lobbying hard, and he's very pro-bigcorp, as McDonald's new 500,000 sqft world headquarters in West Loop can attest to.
Regardless of where Amazon lands (and I don't really have a horse in that race), Bloomberg's weird hang-up about Chicago are no more than a distraction. It's bad enough that Michael Bloomberg is personally spending $millions on TV ads to support the Cook Cty soda tax in a state where he doesn't even reside. Ugh.
While Salt Lake technically meets the requirements, they do so just barely. The metro area barely cracks a million people, and the airport maybe has 1 or 2 international flights a day. Plus Amazon and the Utah state government still have a lot animosity towards each other from the whole online tax thing.
Plus it's really tough to attract out of state talent in Utah.
I think Salt Lake would be a very hard sell compared to what Amazon could easily get with Denver.
I did my undergrad at UW and my grad at UU, I would say the cultures between SLC and Seattle aren't far off, in fact, SLC is the only city I ever knew to have 24 hour coffee shops. Not to mention mountains, hiking, and skiing.
SLC has terrible pollution that is directly correlated with population within the valley. Adding 50K more to the mix in a short amount of time is not a helpful addition
Most of the internal talk I've seen favors Vancouver. It's geographically close (with excellent transportation), is big but still has room to grow. Canada in general is a good choice because they have more lax limmigration policies.
The cities are geographically close, but there is an international border between them. Canada has more open immigration laws opening up Amazon to a much wider talent pool. Considering that major difference, there could be a strong case made for having these major offices close by for in person collaboration.
While we are friendly to immigration, Canadian citizens will need to work there too (in order for government incentives to be doled out)... Otherwise, the public will eventually demand those benefits rescinded.
As a ballpark number, if Amazon wants to hire 50k people, I'd imagine they'd need at least 20k Canadians. So I suspect they'll need to convince Canadian programmers to move there.
I can't pretend to speak for all Canadian citizens, but given the choice:
1. Move to the most expensive real estate market in the country, where the raise in wages wouldn't account for the price difference in housing costs. To work for an employer with Amazon's reputation towards employees... (that's the most polite way I could put that)
2. Immigrate to SV under a TN visa, with the chance of working on interesting valley projects.
Despite both options having a crazy housing market, #2 is much more attractive. The value proposition can be changed though. I'd move in a heartbeat if the same wages were available in Montreal. Same for any Canadian city other than Vancouver and Toronto.
A second tier Midwestern(ish) city could be a good option. Cleveland and Pittsburgh would be good choices, assuming the relocation induces more flight availability from CLE and PIT. Case and CMU produce a lot of tech grads, and Cleveland has been successful attracting medical professionals to relocate with its excellent hospital system. The housing stock, CoL, and cultural amenities are excellent. Pittsburgh already has a few bigtech connections and satellite offices. Columbus and Minneapolis would also fit the bill.
I'd think the massive calamity known as Atlanta traffic would be more off-putting than "living in the South". I know I'd love to find someplace warmer to live.
You might change your mind after spending a couple of summers here. ACs run 24/7. But 1" of snow sends everyone home - to clean grocery stores out of milk and bread.
If you know where you're going to work, it's not difficult to plan where to live to avoid traffic. Not to mention the breakneck pace we're adding midrise housing next to anything that looks mildly interesting.
You don't even have to be in the Deep South to need A/C. I live in North Carolina, which is "South but not Deep South" and I can't imagine living here without A/C.
Have you ever been to RTP? We have a TON of techies here and this is one of the fastest growing areas in the country. Which is both good and bad, because right now one of the nice things about living in this area is the relatively cheap cost of living. But an influx of newcomers will eventually drive that up. But more jobs are good as well. Anyway, the point was just to say that lots of techies are already quite happy in this particular corner of the South.
What might kill Atlanta for AMZN - besides certain problems with traffic and sociopolitical climate (we have probably the largest Confederate memorial in the US called Stone Mountain) - is WHERE Atlanta (itself not an especially large political jurisdiction) would probably like AMZN to build - south of I-20 which is not where most people would want to work or live right now.
Obtaining the land would probably be the easy part, issues such as gentrification might prove harder to solve.
The various counties comprising the ATL metro might themselves spark a bidding war to lure AMZN but I have no idea how that would take shape.
But I think it could be a good pick since its still under development. The only major tenant I've read about is Serta moving their HQ there.
The only downside I can think of is this is not in the city center, but that is on their nice to have list on the RFP.
There are three other areas I could see if Atlanta was to be considered. (There are likely more but to me these stand out).
First, the Downtown area. I think development there could get the most tax credits and their is a surprising amount of vacant or under utilized land. I don't know enough detail but I would assume that "The Gulch" area and/or "Underground Atlanta" area could be potential sites since they are both up for redevelopment currently.
Second, Midtown could be a good contender. There seems to be potential for redevelopment around North Ave and Civic Center stations. I think the Civic Center is vacant currently and could be a large enough site, but doesn't have direct access to the rail station.
Third, Sandy Springs/Dunwoody. Looking at the area around the Dunwoody Marta station specifically. I know I've seen some master plans for that area online and they could fit the bill. The new State Farms HQ there was able to get direct access to the Marta station (I think). The site where AJC is or the shopping centers with Best Buy would work. It seems that Mercedes Benz was able to get a good deal for moving to this area. There are already a lot of large companies with HQs in this area and its close to desirable areas for executives. (similar to Assembly Yards its not in the city center)
My personal pick would be for Midtown, since I think that the most desirable area and employees would like it better, but the more I think about it, I think Downtown makes more sense for what Amazon is looking for and COA would likely be willing to make a better deal for a major development there.
I went through Alpharetta with a friend once and saw all the expensive cars and jerk drivers. I thought it must be what living in Silicon Valley is like.
My experience has not been as bad, but since moving to the north side, I don't use the interstates as much to get around. The psychos all seemed to use the interstates.
Vegas. Land is cheap, the weather is less miserable than Boston although it is indeed miserable in the summer. A couple of hours from LA and a major airport.
Amazon seem to be looking for a well-functioning city with a lot to offer in the way of workforce and amenities, but they also really don't want to pay the top dollar it takes to locate and hire in places like SF and NYC. That means they need a second-tier center of some sort.
Cost of living and unwillingness to bend over backwards for tax breaks take NYC out of the running. I think their list -- Toronto, Boston, Washington, Atlanta, Dallas or Denver -- is pretty decent though Washington and Toronto seem less likely than the others (COLA and ex-US respectively).
Except for being unwilling/unable to offer very high tax breaks, Chicago would be right up there too. But I have to imagine that's going to be a very significant factor.
Other long shot, but still plausible, cities are: Las Vegas, Charlotte, Detroit, and Minneapolis.
New York has both state and city income tax, it's expensive, and it doesn't need Amazon the way some other areas do. I doubt the NYC government would make it worthwhile.
I would bet on Canada, so either Toronto or Montreal. The whole continuity reason for the second HQ needs to address possible political and regulatory disruptions as well. They need the option to flip jurisdiction as a leverage.
Amazon's announcement came right on the heels of Seattle enacting an income tax on higher income people. The city government has done a number of other anti-business initiatives and rhetoric.
Seattle has been taking Amazon for granted, suddenly the Mayor is taking an interest in Amazon:
'“My office will immediately begin conversations with Amazon around their needs with today’s announcement and the company’s long-term plans for Seattle,” Seattle Mayor Ed Murray said in statement Thursday.'
Amazon should consider the Triangle (Raleigh/Durham/Chapel Hill) area of NC. There's definitely a strong university presence here, as well as an existing workforce of highly skilled / educated folks working at companies like Red Hat, IBM, Cisco, Credit Suisse, Deutsche Bank, Glaxo-Smith-Kline, Microsoft, and the like. The Raleigh metro area population was 2.16 million in 2011 and this is one of the fastest growing areas in the country (or was as of 2015)[1].
The Triangle is also in a sweet spot between beaches to the east, within about a 1.5 hour to 2.5 hour drive, and mountains to the west, within about 4-5 hours. And locally we have lots of outdoor green spaces with plenty of trails for running, hiking, mountain biking, etc.
We have major league sports (the NHL Carolina Hurricanes) and minor league baseball (Durham Bulls) and soccer (NC Football Club, formerly the Carolina Railhawks).
The local airport has direct flights to Seattle, San Francisco, Los Angeles, London, Paris, New York, Chicago, Atlanta, DC, and Toronto among others.
There's a nice nightlife scene here with each of the three "points" of the Triangle being a "college town" (Duke, UNC Chapel Hill, and North Carolina State being the major universities). And if you like music, you can get everything from jazz at Beyu Cafe, to the NC Symphony Orchestra at Meymandi Hall in Raleigh, to black metal / death metal / metalcore / etc. at The Maywood in Raleigh, and all sorts of eclectic shit at the Cat's Cradle in Carrboro. And Trans-Siberian Orchestra always has a stop here at PNC Arena on their winter tour. And that's not even mentioning Motorco and the Durham Performing Arts Center in Durham, or Lincoln Theater or Walnut Creek Ampitheatre in Raleigh.
There's plenty of good food to be had here, although admittedly not quite the variety found in Seattle, Chicago, New York or San Francisco, etc. But still you can find a very nice range of options here. Lots of good Thai food in particular.
All in all, despite the embarrassing fuckups by our state government over the past couple of years that have made the national news, this really is a nice place to live and work. And the Triangle metro area is really a different world from the rural parts of NC. Yeah, if you go looking, you can find some pretty backwards, uneducated, ignorant people in NC, but the area here is very diverse, educated, cultured, etc.
