USA TODAY International Edition
Amazon HQ2 search has become a cultural meme
Expensive public hunt is unlike any other project
SAN FRANCISCO – It’s an anniversary that hundreds of mayors and city managers are likely to remember: One year ago Friday, Amazon blew apart everything they knew about economic development when it announced it was looking for a second home that would bring with it 50,000 high-paying jobs and $5 billion in investment.
The search, unusual because Amazon has conducted it largely in public, has become a cultural meme, showing up in “Saturday Night Live” skits and architectural graduation projects. It shook up the 238 cities that initially applied and has the 20 finalists on edge as they await word of whether they will reap the windfall – and have to cope with the potential downsides.
The prospect of investment and bragging rights from securing what’s now the world’s most valuable company pitted tiny cities against metropolises, each striving to convince the Seattle company it had the right workers, transportation, culture and tax breaks. It was an effort built for the age of social media, when everything takes place in public and there is constant jockeying for top billing.
“Most corporations would never take an announcement like HQ2 and announce it as a public free-for-all,” said Barry Broome, CEO of the Greater Sacramento Economic Council, a public-private partnership that unsuccessfully bid in the first round.
In his experience, companies usually contract quietly with a go-between like consultancies Deloitte or McKinsey. The proposed project is shopped around under an alias and a shortlist of perhaps 10 communities is chosen. The go-between then takes each through a secretive set of competitive exercises. Not until a final decision is anything made public.
Cities may think they win based on soft things such as their weather, culture and quality of life. But in actuality it’s usually down to the financial package, Broome said.
“Even companies that negotiated a $1 billion incentive package, the next day they’re saying they chose the city because of its amenities. But Amazon was brash enough to say straight out it was looking for talent, a cool place and an aggressive set of incentives that will actually impact its bottom line in a significant way,” he said.
Amazon has said it will make its selection by the end of the year.
Architect Cody Seipp spent almost 1,000 hours imagining one Amazonian future. He expanded on the idea of Detroit as Amazon’s headquarters for his final thesis project at Rensselaer Polytechnic Institute. He created a 138-page booklet that is a whimsical imagining of Detroit in 2051, 33 years after the city gives Amazon full control over policies and redevelopment operations.
The “race to the bottom,” as it’s been dubbed by detractors, has seen cities offering up enormous tax credits and other incentives to entice Amazon to bring its high-paying jobs to town.
Almost none of them have told the public – or even their local city councils – the dollar amounts. This is legal because most of the deals were put together by local development agencies.
Even if cities hadn’t offered incentives (all but Toronto are believed to have), the cost would still be impressive. Delaware Online reports that Philadelphia had spent at least $545,000 simply to put together its bid for HQ2.