As has been widely reported, Thursday’s announcement that Amazon intends to establish a second headquarters (HQ2) outside Seattle has changed the business climate debate in Washington. As the Seattle Times reported yesterday,
The company, still growing quickly in the city where it has been based for 22 years, said Thursday it would seek to place another headquarters somewhere in North America starting in 2019. Amazon says it expects to spend upward of $5 billion on a new corporate campus, and house as many as 50,000 employees there.
The new headquarters will “be a full equal” to Amazon’s Seattle base, chief executive Jeff Bezos said. “We’re excited to find a second home.”
The Times linked to the company’s Request for Proposal, which includes this:
In choosing the location for HQ2, Amazon has a preference for:
Metropolitan areas with more than one million people
A stable and business-friendly environment
Urban or suburban locations with the potential to attract and retain strong technical talent
Communities that think big and creatively when considering locations and real estate options
Bullet two, “stable and business-friendly” attracted some local attention. While some state and Seattle leaders believe the city can be a contender, the Seattle Times points out a more muted response from a prominent business organization.
[Seattle Mayor Ed] Murray called Thursday “an exciting day” for Amazon, which has “helped Seattle become an international technology and business hub.”
“It is telling that Amazon is looking for a city in the model of Seattle for its second home,” the mayor said.
The Seattle Metropolitan Chamber of Commerce struck a different tone, suggesting local politics were responsible for the company’s choice.
“It is my sincere hope that today’s announcement will serve as a wake-up call,” Chamber president Maud Daudon said in a statement.
Geek Wire reports the company is still increasing its Seattle footprint. And the Puget Sound Business Journal reports a Bellevue real estate developer believes Bellevue may have a shot at being the home to HQ2.
The discussion sparked by the announcement is overdue. Seattle Times business columnist Jon Talton writes,
Seriously, this is a potentially ominous development. The mayor’s race finally has a real economic issue, if the candidates can bring themselves to discuss it.
A majority of the City Council has been playing sandbox social democracy in recent years. The higher minimum wage appears doable — thanks to the city’s prosperity, not the diktat of the vanguard of the revolution. Other policies have put added burdens on business, with a whiff in the progressive air that Amazon is somehow to blame for such complex ills as the increase in street people.
His column is worth your time. The close:
The Midwest is littered with headquarters losses. If Seattle lost out in such a scenario, it would make Boeing’s move to Chicago look like a brief squall by comparison.
Many will say it can’t happen. Amazon has too many sunk costs here and Seattle offers too many advantages. Even in the worst-case scenario, other tech giants would rush to fill any void. Maybe it’s nothing more than Amazon deciding it’s outgrown the viable footprint here. And maybe all this is true.
But I wouldn’t bet the city’s future on it. I wonder when was the last time, if ever, the mayor’s office contacted Amazon to ask about its substantive concerns and needs? It might be time to change that tone-deafness and hubris.
Meanwhile, across the country cities are gearing up for an epic competition. The New York Times reports,
“This is the trophy deal of the decade as far as I can tell,” said Greg LeRoy, the executive director of Good Jobs First, a nonpartisan research group that tracks economic development. “What governor or mayor doesn’t want to stand on a stage with Jeff Bezos to announce a deal like this?”
The NYT notes Seattle’s complicated environment.
Amazon itself seemed to suggest that it was looking for a more welcoming atmosphere than in Seattle, emphasizing that it is looking for a “stable and business-friendly environment” for its new headquarters.
“When big corporations say ‘business-friendly’ climate, it’s code for corporate giveaways and vicious policies seeking to make the biggest possible profits on the backs of working people,” Kshama Sawant, a socialist member of the Seattle City Council, said in an email.
Matt McIlwain, a venture capitalist at Madrona Venture Group in Seattle, said he had heard concerns from executives at Amazon about the climate for businesses in Seattle.
“I recognize there are many factors that went in to Amazon’s decision, but the Seattle City Council’s focus on dividing the pie of economic opportunity rather than growing the pie for the city and the region is undoubtedly among them,” he said.
And the speculation abounds, with the Washington Post listing 39 cities it considers contenders. CNBC also has a list, Talton’s column also offers some possibilities as does Geek Wire. We’ll likely see a lot more of this in the months ahead.
The speculation, however, is less interesting than the introspection occurring in Washington. Much of it is the kind of thing we’ve been writing about since Opportunity Washington launched several years ago. What makes a region desirable for investment and job creation? What policies promote shared prosperity? How do we expand opportunity in our state? We’ve offered ideas, framed by our priorities: Achieve (education), Connect (transportation), Employ (regulatory and tax environment).
The fundamentals still matter. Ideally, Amazon’s decision will help focus debate on how Washington can advance opportunity and job creation. Competition sharpens everyone’s game. And Amazon has reminded the state that, with all the advantages Washington and metro Seattle provide, we still must compete.