Making a case for Amazon HQ2
Windsor-Detroit joint bid offers unique attractions for online retail giant
With 100 cities across North America poised to enter the sweepstakes to land a new Amazon headquarters, leaders in Detroit and Windsor may have a better chance of discovering the Holy Grail or finding a needle in a haystack.
But don’t tell that to Michigan billionaire businessman Dan Gilbert, who was selected to lead the binational bid to secure a second Amazon headquarters that could bring $5 billion in community investments and 50,000 jobs.
“We are going to win this thing or die trying,” Gilbert was quoted as saying last week in Detroit media reports.
Adding Windsor to the pitch provides a unique advantage. The motto of “two-nation destination” will be utilized to the fullest extent to woo the online retail giant Amazon and its CEO Jeff Bezos.
“The main thing will be our geographic advantage,” said Vincent Georgie, assistant marketing professor in the University of Windsor’s business school.
“Regardless of our economies, Amazon will see the significant geographic advantage we have here.”
A Detroit-Windsor Amazon headquarters would offer access to the best of an educated workforce, affordable real estate, logistics and consumer markets on both sides of the U.S.-Canada border.
“When you have an employer of that size and where skill is valuable, you will attract (qualified) people from other places in the province,” Georgie said. “You also have plenty of real estate available at a low cost.
“When I envision (Amazon), this is something that really has potential and makes sense. The Windsor workforce is use to commuting and there is a great binational relationship already in place.”
A media blackout to discuss specifics of the bid has been agreed to by key business and political leaders involved in the Detroit-Windsor campaign.
But Mayor Drew Dilkens did say he took part in a meeting across the Detroit River with Gilbert and Detroit Mayor Mike Duggan last Friday to help set the stage for the joint bid.
“There are tax advantages and available talent,” Dilkens said. “We have the university and (St. Clair) college here. We have a good (talent) pipeline locally as Amazon will certainly be looking for IT skills in determining where they want to be.”
He cited Windsor’s long history of working together with U.S. businesses. There is evidence in the success of the region’s auto sector — which over decades has created a joint corporate and manufacturing entity that feeds off advantages offered on both sides of the border.
“We have a long history of working together and we understand quite well the advantages in both jurisdictions,” Dilkens said. “That will allow us to put together the best bid to Amazon that will spell out those advantages.”
Crain’s Detroit Business this week studied the possible tax advantages Windsor brings to the two-city bid, citing how the U.S. has the fourth-highest corporate income tax rate in the world at 38.9 per cent of earnings while Canada’s equivalent rate is about 15 per cent.
Ontario also offers a 4.5 per cent to 11.5 per cent corporate income tax rate, according to Crain’s.
The publication also suggested possible sites for Amazon in Detroit that included Gilbert’s upcoming redevelopment of the former Hudson store site, the Renaissance Centre, the soon-to-be vacant Joe Louis Arena site and even the former Michigan Central train station owned by the Moroun family.
Longtime local commercial realtor Jim Williams emphasized there is “no question” the local property values in both Windsor or Detroit will prove attractive to Amazon.
Purchasing vacant land or acquiring existing buildings for redevelopment can be done at “25 per cent or maybe even 20 per cent” of what it would cost in Toronto, he said.
New construction costs may not offer much savings, but he suggested Amazon might be more interested in redevelopment — perhaps at locations close to the airport, border crossings, university or college.
How much is spent to redo or outfit a building would be up to Amazon, but upfront property acquisitions in the two border cities will be enticing, Williams said.
“From a land standpoint, it’s a great location on an international border,” he said. “There are good prices and lots of available land if you go looking for it in close proximity the border (crossings) and Detroit.”
The New York Times this week featured a story on the frenzy by dozens of cities tripping over each other to gain the attention of Bezos and Amazon. The joint DetroitWindsor bid was highlighted with Gilbert focused on the immigration advantage.
The large array of downtown buildings in Detroit he already has in his pocket would also be a big advantage since Amazon will have readily available space without waiting for anything to be constructed, Gilbert told the Times. He indicated he already has a “war room” of 40 people working on the Amazon bid.
Both Georgie and Dilkens believe Gilbert brings instant “credibility” to the campaign and was the perfect choice to lead the Detroit-Windsor effort to win over Amazon.
“He is a smart guy, a passionate guy who has been very successful in business,” Dilkens said. “He is talented and knows what to look for. You could not have chosen a better leader to bring this forward.”