Dallas to bid for Amazon’s HQ2
Online giant has cities competing for the chance at 50,000 jobs
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.
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.
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.
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.