For Amazon’s HQ2, here’s how Denver stacks up against few other city finalists
January 19, 2018
DENVER — Not many were shocked to learn Thursday, Jan. 18, that Denver was among 20 finalists for the next phase of Amazon's hunt for a second headquarters, or HQ2.
After all, within days of Amazon's request, Denver was picked by The New York Times as the best city for HQ2. But there were multiple lists that did not include Denver as a top choice. The city didn't make the top five in a Wall Street Journal analysis.
But the city's biggest knock — not being in an Eastern time zone, which 14 finalists are — may not be as big of an issue as speculated, said Sam Bailey, vice president of economic development at the Metro Denver Economic Development Corporation, which oversaw Colorado's bid.
"If you look at the maps, we fall in the middle and a little left," Bailey said. "If they were only looking for an East Coast city, they wouldn't have included Los Angeles, Chicago and Denver."
While the 20 finalists skewed eastward, each of the U.S. four time zones is represented, as were blue and red states, and the north and south. Many finalists didn't release their bids publicly — Colorado eventually did but redacted incentives and locations. The company plans to announce a winner this year, but that could mean several more short lists before that point. There are obviously a lot of unanswered questions.
"What we don't know is what does it mean to be one of the 20? Or what is the time frame?" said J.B. Holston, Dean of the Daniel Felix Ritchie School of Engineering and Computer Science | University of Denver, who feels Denver still has a great shot. "Do I think Jeff Bezos (Amazon's founder) has 20 different options in mind? No way! I think he pretty much knows what he wants to do."
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During the six-week process that began Sept. 7, Amazon offered up specific criteria: A city with room for 8.1 million square feet of offices, within 45 minutes of an international airport, commuting options and the ability to attract 50,000 employees with salaries of an average $100,000 a year. Colorado itself eliminated every city outside the Denver-metro region in its single bid. Approximately 238 proposals were submitted.
Here's a sampling of what Denver is up against:
Indianapolis seemed a little surprised to be named one of the 20, after earlier stories called Indianapolis "a long shot" and not "ready for Amazon." Even Indianapolis Mayor Joe Hogsett's official statement lacked conviction.
"Today's short list from Amazon makes clear that no matter what the final decision may be, Indianapolis is already a big winner," Hogsett said in a statement.
The city kept its bid a secret but Hogsett told the IndyStar in October that officials submitted a "six-page 'microsite' that provides a three-dimensional, interactive experience for those viewing the details." He also called the city's chances a "long shot but one worth pursuing with the collaboration of other local leaders."
The IndyStar offered up its own suggestion of sites, including the former General Motors stamping plant on 103-acres in the western part of the city.
If there was a big surprise on the list it was likely Columbus, Ohio, arguably the third-best known city in its own state despite being the capital.
The city, home to roughly 860,000 souls and Ohio State University, submitted a detailed proposal that not only offered up direct cash support — 100 percent property tax abatement for 15 years, cash incentives for new jobs created — but also vowed to create programs to benefit Amazon and the city as the two grow together.
The proposal outlines the creation of a transit and mobility fund that would be built up by dedicating 25 percent of all the income tax withheld from Amazon employees at HQ2 for 15 years. That money would then be channeled into initiatives like creating new transit solutions (Columbus has a bus system but no commuter or light rail) and investing in an autonomous shuttle network, the proposal says.
Columbus has a recent record of winning coveted investments in surprising fashion. As noted in a letter to Amazon from Mayor Andrew Ginther, the city beat out 77 U.S. municipalities in 2016 to win the U.S. Department of Transportation Smart City Challenge. That honor netted the city $50 million to dedicate to improving quality of life, driving economic growth and improving access to jobs among other things.
Once the sun sets on the 15-year new jobs incentive package — good for up to $400 million over that time — Columbus will offer Amazon a 15-year window for land acquisition and property improvement reimbursements. That could mean another $75 million for Amazon.
The lone West Coast city really stands out because it's in the same time zone as Amazon's headquarters in Seattle, which got eliminated.
According to the Los Angeles County Economic Develop Corp.'s proposal, the region offered nine potential locations. The agency, however, kept the process a secret and didn't name the sites or mention a whiff about financial incentives.
The Los Angeles Times reported in October that Gov. Jerry Brown pledged a "multi-agency 'strike team' that can help expedite permits and approvals" plus up to $300 million in tax credits and subsidies from the California Competes Tax Credit program and workforce training funds.
The city ranked second nationwide in an analysis by Anderson Economic Group of where Amazon should go (Denver was 16th). But the report only considered access to quality labor and services, ease of transportation and cost of doing business. It didn't touch on the quality of life or financial incentives, which Amazon did say would be considered.
"My big point to them is, anything you want, in any shape or form, we can do," Chicago Mayor Rahm Emanuel told The Chicago Tribune.
Hailing from a no-income tax state like Amazon's native Washington (as well as competitors Austin, Dallas and Nashville, Tenn.) the Miami area made that cut after offering up a proposal covering eight sites spread across three South Florida counties.
Among the benefits Miami-area officials are touting, according to a Sun Sentinel report, is a three-million person labor pool that is more than 50 percent bilingual cand roughly 375,000 college students hailing from area schools like Florida International University and Florida Atlantic University.
Talent recruitment shouldn't be a problem, those officials say, but — echoing a concern many Denver Amazon opponents have voiced in recent months — overcrowding issues that arise from a booming population could be. Overloaded transportation and infrastructure networks might be enough to convince Jeff Bezos to look elsewhere, they fear.
The Miami pitch didn't disclose the financial incentives package Amazon could qualify for.
The city, which shared its Amazon bid online, compared itself to Seattle by touting its 18 percent lower housing costs and larger mass-transit system that is "nearly four times the 116-mile rail system that Seattle will have completed by 2041." It also offered three sites.
While financial incentives were not shared, the City Council passed a bill to benefit "New Megabusiness" that locate to Philadelphia by reducing the business net income tax rate to zero, according to Technical.ly Philly.
A report by the Atlanta Journal Constitution on Thursday said that Georgia's incentives could top $1 billion and include tax breaks, grants and potential transportation improvements. An AJC poll on whether the public would support giving incentives worth $1 billion to Amazon found favor.
The smallest metro area by population, according to U.S. Census figures, Raleigh was another surprise pick, especially since nearby Charlotte thought it had it in the bag. The Charlotte Observer's editorial board reluctantly admitted defeat but wished for the best: "It might be hard for some Charlotteans – perhaps many Charlotteans – to say this about our neighbor to the east, so we're going to go first. *deep breath* Go Raleigh."
Raleigh is part of the Research Triangle, which counts several schools including Duke University as top research centers. According to local TV channel WRAL, the regional proposal was mostly confidential but included seven sites.
The only city on the list outside of the U.S., Toronto is still in the Eastern Time Zone. It's big brag when submitting its proposal to Amazon? Software programmers there are paid 34 to 38 percent less than those in Boston or New York and the company would save $1.5 billion in annual salaries if it located in Toronto.