Amazon Plans to Open Second Headquarters, Starts Bidding War Among 100 Cities

Sep 20

In what is being touted as the “Olympics of the corporate world,” Amazon has set off a ferocious bidding war among North American cities to host the online retailer’s second headquarters. While deals of this kind are usually done behind the scenes, Amazon has publicly solicited bids from cities to become the location of its second home, dubbed as “HQ2.” As a result, cities are now trying their best to outdo each other to come up with enough enticing perks to woo the internet firm.

And it’s not hard to understand why cities would be motivated to bag Amazon’s HQ2. Aside from the prestige of having one of the world’s largest firms, the chosen city’s economy would receive a giant boost from the $5 billion Amazon intends to invest in the project.

But that’s not all. The biggest impact would come from the high-paying jobs that Amazon’s second headquarters will create. According to the company’s solicitation, it plans to hire around 50,000 full-time employees for the new location with annual salary projected to be in the $100,000 range.

With a month to go before the October 19, 2017, deadline, the list of cities vying for Amazon’s HQ2 has ballooned to over 100. Currently, the top contenders include Austin, Boston, Chicago, Denver, New York, Toronto, and Ottawa.

Amazon has revealed some requirements for a city to qualify as a possible second headquarter location. For instance, the company prefers a metro area with over a million in population. Accessibility for transportation and communication are also important as the company requires that a city should be close to an international airport, with a mass transit system in place, must be located near a major highway and must have good internet access.

Since every business must have an eye trained on its bottom line, Amazon states that it prefers a “stable and business-friendly environment.”  It is probably the company’s way of saying that an attractive financial incentive–which could include reduced business fees, grants for relocation and some tax cuts–will be a major factor in its final decision, adding that “the initial cost and ongoing cost of doing business are critical decision drivers.”

Understandably, cities are trying to highlight their strengths along the lines of Amazon’s requirements. For instance, Aurora Economic Development Council VP Yuriy Gorlov asserts that “Colorado is perfectly aligned with the company’s culture of collaboration and innovation and focusing on its customers.” Meanwhile, Scott Levitan or North Carolina-based Research Triangle Foundation says “We have sites that are ready, that are transit-oriented. We have tremendous fiber backbone at our site and we have a region that is absolutely focused on being the best possible location for HQ2.”

But not everyone is very optimistic about the prospect of living next door to a global behemoth. One major concern is that the swarm of high-paying Amazon workers will eventually wreak havoc on the local standard of living, driving up the cost of housing and exerting an upward force on wages which is bad for local businesses, according to Globe columnist Evan Horowitz as quoted by Business Insider.

And then there is the company’s approach that had some quarters fuming. According to Los Angeles Times’ Michael Hiltzik, “The company’s approach is arrogant, naive and more than a teensy bit cynical. Rather than be offered bribes to move its headquarters into a community, Amazon should be made to pay for the privilege.”

[Featured Image by Amazon]