In case you missed it between Hurricane Harvey and Irma, Amazon announced they are looking to expand beyond Seattle and invest into a second HQ dubbed “HQ2”. Amazon will invest $5B and plans to employ up to 50,000 employees at this new HQ2. To put that in perspective Amazon’s current Seattle HQ currently, employs around 25,000 employees and resides in a little over 8.1M square feet of space. Cities across North America are scrambling to get their pitch teams together and present by the due date of October 19. The details of the Request for Proposal (RFP) define some of the ideal parameters they are seeking in this new HQ2. An MSA population of 1M+, access to quality talent (ie universities, like kind industries), direct flights to major cities (Miami, San Francisco, Washington DC, NYC, Seattle), cost-effective living for employees and a business-friendly environment (aka not California) to help incentive the new campus.
For the sake of time I have taken the liberty to define the top 5 frontrunners and who I believe will win the HQ2 in the end.
Top 5 (Alphabetically Listed)
1) Austin, Texas
2) Dallas, Texas
3) Denver, Colorado
4) Detroit, Michigan
5) Nashville, Tennessee
1 - Austin, Texas:
The most natural fit given the recent acquisition of Whole foods (Whole Foods HQ is in Austin) and Jeff Bezos grew up in Texas and is currently one of the largest landholders in Texas.
Pros: Business-friendly, Talent Pool (Google, Apple, Dell, Whole Foods, and many Universities), Cool city (a warm San Francisco vibe), Potential gateway to Mexico and Latin America.
Cons: Lack of Supply for new campus in Downtown area, Limited Direct Flights
2 - Dallas, Texas:
One of the major business and growth hubs in the entire US. Recently HQ relocations of likes Toyota, State Farm and others are a testament to the overwhelming business-friendly nature of Texas and Dallas.
Pros: Business-friendly, Big talent pool, direct flights, massive incentive capabilities, Potential gateway to Mexico and Latin America.
Cons: Urban/Suburban Sprawl (DFW metroplex is unbelievable HUGE 2X the size of Los Angeles Metroplex and LA is huge (see article)
3 - Denver, Colorado:
Essentially smack dab in the center of the country, with a growing urban core and good access to transportation routes.
Pros: Herb friendly (I didn’t even consider this until meeting with a tech talent recruiter that said that is often a challenge in more strict states like Texas for recruiting talent), blossoming transportation network with direct flights to everywhere and more importantly home to the Denver Broncos.
Cons: Talent pool will need to grow, incentives package would need a lot of State help.
4 - Detroit, Michigan:
Motown aka Dan Gilbert’s real-life monopoly board is one of those great American cities that is experiencing a renaissance that is hard to be paralleled anywhere in the world. I have written about Detroit before and why I believe right now it is probably the best urban investment of anywhere in the US.
Pros: Tons of available buildings and land for cheap, Swagger and Detroit pride, close to East Coast and Canada. Talent pool could tap into massive Midwest university systems on a very cost-effective basis (Michigan, Mich St, Ohio St, etc)
Cons: City and State Incentives would be limited given the recent economic struggles, current talent pool would have to pull from a greater region. Very limited direct flights.
5 - Nashville, Tennessee:
The Sunbelt/East coast version of Austin, Texas. A cool young hip city that has good access to universities and relatively insulated from weather issues like coastal cities.
Pros: vibrant young city vibe, east coast location, and business friendly
Cons: Smallest in comparison to the other top metros, good colleges but talent access would be a challenge, lack of direct flights and transportation.
Of course, no city is perfectly aligned with all the things Amazon is looking for in their RFP but these bests represent the top 5.
And the winner is…
DENVER, COLORADO.
It comes down to a battle between Dallas and Denver. Dallas will put its economic muscle behind their proposal that will represent the best incentive package of any city. But, Denver and the State of Colorado will step up and get close to matching the huge incentives offered by Dallas. Ultimately, they secure the prime victory on the merits of the city. With 300 days of sun, an outdoor adventure mecca that surrounds the city and the tremendous transportation hub that Denver represents will be the deciding factors.
To help define the decision in an image look at the evolution of CEO Jeff Bezos:
1998: Golly gee, I hope I run into Mr. Bill Gates at Starbucks
2017: I free climb the Rockies before breakfast
Of course, Amazon represents such a huge economic win many crazy things could happen behind the scenes that could swing the decision in many other directions. We will do whatever we can to aid the San Antonio city officials in a pitch to try and land Amazon HQ2 in San Antonio. We believe the Hemisfair location of Downtown would represent a huge potential for Amazon HQ2.
Let me know what you think, (IG @harris.bay)
