Dal­las to bid for Ama­zon’s HQ2

On­line gi­ant has cities com­pet­ing for the chance at 50,000 jobs

The Dallas Morning News - - Front Page - By MARIA HALKIAS and JILL COWAN Staff Writers

Ev­ery city in North Amer­ica with at least 1 mil­lion peo­ple was just handed an un­prece­dented as­sign­ment — Ama­zon.com wants pro­pos­als by Oct. 19 on where to house its sec­ond head­quar­ters.

The on­line be­he­moth, which is based in Seat­tle, said Thurs­day that it had com­menced a search for a new city to ac­com­mo­date its fu­ture growth, promis­ing to spend more than $5 bil­lion and bring 50,000 jobs to what founder and CEO Jeff Be­zos said would be “a full equal” new head­quar­ters, which it LAND­ING Ama­zon fa­cil­ity would be deal for the ages, D-FW real es­tate bro­kers say.

has dubbed “HQ2.”

And all early indi­ca­tions are that the com­pe­ti­tion is go­ing to be fierce.

Dal­las, al­ways see­ing it­self as a top con­tender for cor­po­rate re­lo­ca­tions, was among at least a dozen cities, in­clud­ing

Bos­ton, Min­neapo­lis, Pitts­burgh and St. Louis, to pub­licly throw their hats into the ring Thurs­day. Mike Rosa, se­nior vice pres­i­dent for eco­nomic de­vel­op­ment of the Dal­las Re­gional Cham­ber, said the group “com­mu­ni­cated to Ama­zon our in­tent to re­spond.”

Ama­zon re­leased eight pages of de­tailed re­quire­ments for the new site, in­clud­ing:

■ An in­ter­na­tional air­port within a 45-minute drive.

■ Ex­ist­ing build­ings of at least 500,000 square feet or open land of 100 acres.

■ A highly ed­u­cated tech work­force.

■ A strong uni­ver­sity sys­tem. Rosa said he was con­fi­dent that D-FW had lo­ca­tions that fit the bill. “There is no better place than right here for Ama­zon’s HQ2,” Rosa said.

The company also said it was seek­ing eco­nomic in­cen­tives. Ama­zon has added an eco­nomic im­pact sec­tion to the me­dia sec­tion of its web­site. Good Jobs First, a non­profit that pro­motes ac­count­abil­ity in eco­nomic de­vel­op­ment, says Ama­zon has re­ceived sub­si­dies from lo­cal and state gov­ern­ments ex­ceed­ing $1 bil­lion.

Which­ever city wins “will pay quite the pre­mium for an in­stant Sil­i­con Val­ley,” said James Thom­son, a for­mer Ama­zon ex­ec­u­tive who now works with Ama­zon Mar­ket­place sell­ers. Ama­zon will de­mand a “mas­sive tax break,” he said.

Adding to the mix

Dal­las is a cor­po­rate town, but its di­verse econ­omy has pre­vented it from be­com­ing a company town. Ama­zon’s ex­tra­or­di­nary growth has turned Seat­tle into the big­gest company town in Amer­ica, ac­cord­ing to a re­cent re­port in

The Seat­tle Times, whose anal­y­sis showed the company now fills 8.1 mil­lion square feet, or 19 per­cent of the prime of­fice space in the city. That com­pares with AT&T’s 3.4 mil­lion square feet in Dal­las.

In ad­di­tion to AT&T, the largest com­pa­nies based in Dal­lasFort Worth in­clude ExxonMo­bil, Kim­berly-Clark and Amer­i­can Air­lines. The area’s em­ploy­ers are from di­verse in­dus­tries: air­lines, con­sumer goods, re­tail, en­ergy, food, tech­nol­ogy, hos­pi­tal­ity, health care, ed­u­ca­tion, pro­fes­sional and real es­tate ser­vices and, more re­cently, au­tomak­ers.

Dal­las and its suburbs have made cor­po­rate re­cruit­ment a key part of the re­gion’s eco­nomic de­vel­op­ment strat­egy in re­cent years — and lead­ers have touted high­pro­file suc­cesses, such as Toy­ota’s con­sol­i­da­tion of its North Amer­i­can head­quar­ters in Plano.

While the Dal­las-Fort Worth econ­omy is known for job creation, lo­cal com­pa­nies may cringe at the prospect of Ama­zon’s pres­ence. “There’s lots of tal­ent to poach,” said Paul Song, co-founder of Detail Pro­vi­sions, a Dal­las-based company that’s buy­ing up men’s e-com­merce brands. “Ev­ery­one is al­ways happy to get a better job.”

Ama­zon has a rep­u­ta­tion for be­ing a tough place to work. But it pays well.

Ama­zon will raise salaries wher­ever it goes, said Matt Rut­ledge, founder of Car­roll­ton-based Woot Inc., a quirky deal-of-the-day web­site that Ama­zon pur­chased in 2010 and still op­er­ates here. That’s what it did at Woot, he said.

Res­i­dents look­ing for more job op­por­tu­ni­ties would wel­come Ama­zon to North Texas, but other em­ploy­ers might not be so happy, Rut­ledge said.

Dal­las lacks the big num­bers of soft­ware en­gi­neers that Ama­zon would need to hire, Rut­ledge said. “We’re not a hot­bed of that skill set.”

That’s partly be­cause, cul­tur­ally, tech­nol­ogy pro­fes­sion­als pre­fer places like Austin, he said. For a key hire, Rut­ledge said, he doesn’t re­quire the per­son to move to Dal­las. Ama­zon said Thurs­day that with two head­quar­ters lo­ca­tions, its man­agers would be able to de­cide where to base their teams.

Dal­las is used to be­ing one of the top three choices for cor­po­rate re­lo­ca­tions, but be­cause of its but­toned-down rep­u­ta­tion, Rut­ledge puts Dal­las in the top 15.

If Ama­zon picks Dal­las, the com­pe­ti­tion for tal­ent is only go­ing to get fiercer, he said.

“It’s go­ing to be a prob­lem for me as a small company,” said Rut­ledge, who is also co-founder and CEO of a Dal­las-based tech in­cu­ba­tor called Medi­ocre Corp.

Re­tail in­dus­try

While Ama­zon is a gi­ant tech­nol­ogy company, it’s also a re­tailer. And Dal­las has long list of re­tail com­pa­nies head­quar­tered here and com­pa­nies that cater to them.

Ama­zon re­cruits on the cam­pus of the Uni­ver­sity of North Texas in Den­ton, which has the only digital re­tail­ing de­gree in the U.S., said Linda Mi­hal­ick, who leads the pro­gram.

Ma­jor re­tail­ers head­quar­tered here have cre­ated a “strong re­tail and con­sumer ex­pe­ri­ence tal­ent pool, not to men­tion one of the coun­try’s lead­ing hubs for hos­pi­tal­ity and food ser­vice busi­ness launches,” Mi­hal­ick said. “There are nu­mer­ous re­tail­ers and sup­port­ing tech­nol­ogy com­pa­nies that have en­dured the ever-chang­ing re­tail cli­mate brought on by the wel­come digital dis­rup­tion.”

Teams of buy­ers from Ama­zon at­tend the Jan­uary and June ma­jor whole­sale events at the Dal­las Mar­ket Cen­ter, said Cole Daugh­erty, se­nior vice pres­i­dent at the whole­sale mar­ket. Ma­jor U.S. re­tail­ers in­clud­ing Dil­lard’s and Neiman Mar­cus have of­fices in the 5 mil­lion-square-foot mar­ket cen­ter, which at­tracts 200,000 vis­i­tors a year.

Texas ties

Ama­zon al­ready has some big Texas con­nec­tions. The company just pur­chased Austin-based Whole Foods Mar­ket. Texas is where Wal­Mart came to learn the gro­cery busi­ness in the late 1980s. As Ama­zon and Wal-Mart are locked in a ma­jor gro­cery bat­tle, the big­gest state where Wal-Mart op­er­ates may be a challenging place for Ama­zon to grow its gro­cery busi­ness.

While Texas was the first big state a decade ago to con­front Ama­zon over sales taxes, Be­zos hasn’t held a grudge. Ama­zon, which em­ploy­ees 20,000 peo­ple in Texas, is in the process of building its ninth and 10th ful­fill­ment cen­ters in the state.

A year ago, Ama­zon started building its largest wind project to date. It’s ex­pected to be com­pleted this year in Scurry County, west of Abi­lene, and have more than 100 tur­bines. In 2014, Ama­zon Web Ser­vices, its cloud com­put­ing busi­ness, leased five floors in Two Gal­le­ria Tower.

And Be­zos’ Blue Ori­gin sub­or­bital launch fa­cil­ity is in West Texas near the town of Van Horn.

Be­zos also has per­sonal con­nec­tions to the state.

He was born in Al­bu­querque, N.M., but his fam­ily moved to Hous­ton when he was a tod­dler.

Grow­ing up, Be­zos spent 10 hot sum­mers on his grand­fa­ther’s cat­tle ranch in Co­tulla, and his cousin is the coun­try singer Ge­orge Strait.

JEFF BE­ZOS

2015 File Photo/Nathan Hun­singer

Ama­zon.com’s ful­fill­ment cen­ter in Cop­pell is one of the com­pany’s many in­vest­ments in Texas. The Seat­tle be­he­moth is cur­rently build­ing its ninth and 10th ful­fill­ment cen­ters in the state.

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