Ama­zon searches for 2nd HQ site

City, state pre­pare pro­pos­als for firm’s new head­quar­ters

Baltimore Sun - - FRONT PAGE - By Sarah Gantz

Both Bal­ti­more City and County quickly raised their hands af­ter Ama­zon an­nounced Thurs­day it is search­ing North Amer­ica for a sec­ond head­quar­ters site that could even­tu­ally em­ploy 50,000 peo­ple.

The Seat­tle-based e-com­merce gi­ant’s hunt for a sec­ond home sparked in­ter­est from many cities and likely will result in a bid­ding war as gov­ern­ments of­fer sub­si­dies to lure the company.

“This will be the most cov­eted head­quar­ter project in the his­tory of site se­lec­tion,” said John Boyd, a prin­ci­pal at The Boyd Co. Inc., a cor­po­rate site con­sult­ing firm in Prince­ton, N.J.

Ama­zon is­sued a public call for pro­pos­als Thurs­day, say­ing it wants an ini­tial 500,000 square feet of space, prefer­ably in an ur­ban or sub­ur­ban area, with ac­cess to ma­jor high­ways, air­ports, public trans­porta­tion and a ro­bust tech­nol­ogy work­force. The company ex­pects to even­tu­ally in­vest $5 bil­lion in a project it calls HQ2 that could span 100 acres with up to 8 mil­lion square feet of building space.

"We ex­pect HQ2 to be a full equal to our Seat­tle head­quar­ters," Ama­zon CEO Jeff Be­zos said in a news re­lease. "Ama­zon HQ2 will bring bil­lions of dol­lars of up-front and on­go­ing in­vest­ments, and tens of thou­sands of high-pay­ing jobs. We're ex­cited to find a sec­ond home."

With its prox­im­ity to ma­jor in­ter­na­tional air­ports and in­ter­state high­ways, a strong network of uni­ver­si­ties and one of the high­est con­cen­tra­tions of tech­nol­ogy work­ers in the coun­try, the Greater Bal­ti­more area could be a con­tender for Ama­zon’s ex­pan­sion, lo­cal of­fi­cials said.

But the re­gion won’t be alone in clam­or­ing for the re­tail gi­ant’s busi­ness. Within hours of Pugh

Ama­zon’s sur­prise an­nounce­ment, Bos­ton, Chicago, Dal­las, New York and Philadel­phia joined a chorus of cities sud­denly woo­ing the mas­sive project.

Closer to home, Washington, D.C., where Be­zos, who also owns The Washington Post, re­cently pur­chased a $23 mil­lion man­sion; North­ern Vir­ginia, with its newly ex­tended Metro line; and Mont­gomery and Prince Ge­orge’s coun­ties also will likely be con­tenders.

Pro­pos­als are due Oct. 19 and Ama­zon plans to choose a lo­ca­tion next year.

Lo­cal and state of­fi­cials are aware the com­pe­ti­tion will be tough, but said the eco­nomic op­por­tu­nity Ama­zon of­fers is worth the fight.

“It’s go­ing to be a 50-state com­pe­ti­tion for it, but we want to make sure Maryland has its hat in the ring,” said Steve Pennington, man­ag­ing direc­tor of busi­ness and in­dus­try sec­tor de­vel­op­ment at the Maryland Depart­ment of Com­merce. “We think it’s a great op­por­tu­nity and we think we can be well po­si­tioned for it.”

Bal­ti­more Mayor Cather­ine Pugh said the city will “pur­sue this op­por­tu­nity ag­gres­sively to make a com­pelling case for Bal­ti­more City as its sec­ond head­quar­ter lo­ca­tion.”

Gov. Larry Ho­gan pointed to Maryland’s cen­tral Mid-At­lantic lo­ca­tion, with ac­cess to a top port on the East Coast and a ma­jor met­ro­pol­i­tan air­port, and his ef­forts make the state more busi­ness-friendly, by cut­ting taxes, reg­u­la­tions and fees as sell­ing points that could woo Ama­zon.

“Wew­ere­suc­cess­ful with one big, mil­lion­square-foot Ama­zon deal al­ready,” Ho­gan said, “and we’re go­ing to try to con­vince them that we’re still the place to look.”

In 2015, Ama­zon opened a 1 mil­lion­square-foot ful­fill­ment cen­ter on Broen­ing High­way, near the port of Bal­ti­more, with a $43 mil­lion in­cen­tive package from Maryland and Bal­ti­more. At least 3,000 peo­ple work at the ful­fill­ment cen­ter and a nearby sort­ing fa­cil­ity, but that’s one of dozens of such fa­cil­i­ties Ama­zon has around the coun­try.

Ho­gan said he’d wel­come Ama­zon “any­where they want to go,” but said he would pre­fer to see the re­tailer set up shop in a part of the state where jobs are needed most, such as Bal­ti­more.

As the state weighs its op­tions for Ama­zon, “Bal­ti­more County is right in the game,” said County Ex­ec­u­tive Kevin Kamenetz in a state­ment.

Lo­cal of­fi­cials and devel­op­ers al­ready are mak­ing lists of Bal­ti­more-area sites that could be con­tenders.

Kamenetz floated Trade­point At­lantic at Spar­rows Point, Green­leigh at Cross­roads in White Marsh and Spring Grove in Ca­tonsville as pos­si­ble sites.

In the city, Port Cov­ing­ton is at the top of ev­ery­one’s list.

Un­der Ar­mour CEO Kevin Plank’s pri­vate de­vel­op­ment firm Sag­amore De­vel­op­ment Co. largely owns the South Bal­ti­more site and plans a $5.5 bil­lion re­de­vel­op­ment with 14.1 mil­lion square feet of mixed-use de­vel­op­ment to be built over 25 years, an­chored by a new cam­pus for the ath­letic ap­parel company. The project is sup­ported by a $660 mil­lion public fi­nanc­ing package from Bal­ti­more.

Sag­amore Pres­i­dent Marc Weller said the prop­erty has the ca­pac­ity to ac­com­mo­date Ama­zon and the firm will work with state and city of­fi­cials to “ag­gres­sively pur­sue this op­por­tu­nity.”

“More than any other place in the coun­try, Bal­ti­more City and Port Cov­ing­ton would be a per­fect home for Ama­zon’s sec­ond cor­po­rate head­quar­ters,” Weller said in a state­ment. “Along with Un­der Ar­mour, hav­ing another ma­jor in­no­va­tive company’s head­quar­ters at Port Cov­ing­ton would be a huge boon for Bal­ti­more City and its work­force.”

Other pos­si­bil­i­ties in Bal­ti­more could in­clude Sag­amore-owned West­port, State Cen­ter, MetroWest and the Old Town Mall, said Kirby Fowler, pres­i­dent of the Down- town Part­ner­ship of Bal­ti­more.

“The city it­self fits all the char­ac­ter­is­tics they’re look­ing for in terms of ac­ces­si­bil­ity, cost of do­ing busi­ness — ev­ery­thing else they’ve listed in the RFP, we think we’re very com­pet­i­tive,” said Wil­liam H. Cole, Pres­i­dent and CEO of the Bal­ti­more De­vel­op­ment Corp., the city’s eco­nomic de­vel­op­ment agency.

Find­ing the right lo­ca­tion is only part of the bat­tle. If Bal­ti­more wants to win over Ama­zon, the re­gion needs to prove it can pro­duce enough work­ers and of­fer em­ploy­ees a de­sir­able place to live.

“The other part of the pro­posal is sell­ing Bal­ti­more,” said Al Barry, a Bal­ti­more-area real es­tate de­vel­op­ment con­sul­tant. “It’s not just ge­o­graphic — it’s also the ed­u­ca­tion, the work­force, which I sus­pect is go­ing to be al­most equally im­por­tant to the geog­ra­phy and real es­tate.”

The sec­ond head­quar­ters is ex­pected to house some 50,000 en­gi­neers, soft­ware devel­op­ers, ex­ec­u­tives and ad­min­is­tra­tive per­son­nel, with an av­er­age an­nual wage of $100,000.

Ap­pli­cants are re­quired to detail their area’s ed­u­ca­tion sys­tem and tech­nol­ogy work­force ca­pa­bil­i­ties.

State and lo­cal of­fi­cials say Maryland may be uniquely po­si­tioned. Long home to gov­ern­ment agen­cies and con­trac­tors that serve them, pro­fes­sional and tech­ni­cal work­ers ac­count for about 28 per­cent of the state’s work­force, ac­cord­ing to fed­eral la­bor statis­tics. About 40 per­cent of Maryland res­i­dents over age 25 have a bach­e­lor’s de­gree and 18 per­cent have a grad­u­ate or pro­fes­sional de­gree, mak­ing Maryland’s among the most highly ed­u­cated state work­forces.

“We have all the nat­u­ral as­sets that would make this work,” Cole said.

Ama­zon also will con­sider hous­ing op­tions, crime, cost of liv­ing and the qual­ity of life that would be avail­able to prospec­tive em­ploy­ees.

“We want to in­vest in a com­mu­nity where our em­ploy­ees will en­joy liv­ing, recre­ational op­por­tu­ni­ties, ed­u­ca­tional op­por­tu­ni­ties, and an over­all high qual­ity of life,” the re­quest for pro­pos­als reads.

The win­ning suitor will need to not only of­fer up a site that meets Ama­zon’s long wish list of features and an im­pres­sive in­cen­tive package, said the con­sul­tant Boyd, but be able to el­e­vate the company’s brand as a for­ward-think­ing tech­nol­ogy company.

“This isn’t go­ing to be cost driven. Op­er­at­ing costs mat­ter, but for a project of this scale and for a company of Ama­zon’s re­sources,” he said, “it’s more about the brand and the tal­ent and the panache of this new ad­dress.”

News of Ama­zon’s re­quest for pro­pos­als had the en­tire re­gion buzzing about its po­ten­tial to boost eco­nomic de­vel­op­ment here.

Har­ford County Ex­ec­u­tive Barry Glass­man wasn’t sure whether the county had the right spot for Ama­zon but said a deal any­where in the re­gion could ben­e­fit the county and cre­ate op­por­tu­ni­ties for busi­nesses in Har­ford County.

“It puts this area on the map as a place to do busi­ness,” said Julie Mus­sog, pres­i­dent and CEO of Anne Arun­del Eco­nomic De­vel­op­ment Corp. “It would just be a real game changer for Maryland.”

City Coun­cil­man Eric T. Costello, whose district en­com­passes Port Cov­ing­ton, said the rea­son to go af­ter the Ama­zon head­quar­ters was a short one: “50,000 jobs.”

“The prospect of hav­ing 50,000 new jobs here would be in­cred­i­ble,” he said. “It would change the city.”

Costello said he ex­pects al­most ev­ery ma­jor city in the coun­try will be com­pet­ing to get the project and he com­pared Ama­zon’s un­usual ap­proach to the process for ap­ply­ing to host the Olympic Games.

“It would be crazy not to go af­ter that op­por­tu­nity,” he said.

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