Orange Crush
Why Vancouver could be a strong contender to land Amazon’s second headquarters by Scott Neufeld
With just one click, Amazon.com Inc.'s request for proposals for a new headquarters triggered what may be the biggest corporate relocation lottery in history.
At press time, Vancouver and more than 100 other Canadian and U.S. cities were vying for the coveted prize. The Seattle-based retail giant will announce the lucky winner next year. With its high housing costs and tight land supply, what are Terminal City's chances of playing host to an 8.1-million-square-foot HQ teeming with some 50,000 employees?
Experts point out that homes are expensive in most of the areas favoured by tech companies, including Seattle and Silicon Valley, so this factor doesn't necessarily knock Vancouver out of contention. On the plus side, the city offers work-life balance, with outdoor recreation and a vibrant downtown. “From purely a cultural and cool factor, Vancouver definitely meets the requirements,” says Glenn Gardner, principal at Avison Young Property Management (BC) Inc. “It has everything that a trendy technology company would be looking for.”
Add Canadian selling points like multiculturalism and government-funded health care, and Vancouver could have a significant edge on U.S. rivals. Amazon has 5,000 openings for software developers, according to commercial real estate firm Colliers International. “You're not going to fill that immediately anywhere so being able to source globally is probably a very important issue,” says Craig Hennigar, director of market intelligence, Canada, with Colliers, adding that Vancouver's openness to immigration is attractive.
Although currency exchange differences could reduce the company's costs, one of the biggest savings for businesses in Canada is on health care. “There's huge issues in the United States for health coverage— government health care just isn't there for the masses like it is here,” notes Anthony Ariganello, president and CEO of Chartered Professionals in Human Resources B.C. & Yukon.
Another potential Vancouver advantage: its work culture closely matches Seattle's. Hennigar says this could be a problem if Amazon is trying to make its ranks more diverse, which some speculate may be the reason behind the new HQ. But Ariganello sees it as a positive for Vancouver, citing the disastrous merger of U.S. Chrysler Corp. and Daimler-benz AG. This odd-couple tie-up of a U.S. and a German automaker with two different styles went sour after nine years. It would be a huge culture shock for Amazon to train thousands of new staff in a location that isn't in tune with West Coast culture, Ariganello argues. “If you don't have the right employee culture, and particularly if the culture isn't right, you're doomed to fail.”
Among the obstacles for Vancouver is finding a suitable site. Although there are some in the region (see below), municipal governments would need to allow significant density. The entire downtown core has only about 22 million square feet of office space.
With no other headquarters of comparable size, Amazon could make its mark on Vancouver. “The question is what kind of strain that might put on other tech firms to lose employees,” Hennigar says. “In a city like Vancouver, it almost becomes like a black hole.”