Last Updated Sep 9, 2017 5:14 AM EDT
Amazon’s (AMZN) surprise announcement Thursday that it plans to look for a in North America is likely to set off a bidding war among cities and municipalities, eager for a bite at the $38 billion in economic growth potential the company has promised with a second HQ.
The company gave some clues about what it wants for its cheekily named “HQ2” — a location similar to its Seattle campus that is urban or suburban, well-connected to transit and in a metro area with at least 1 million people. But beyond that, the fact that it’s going through a public process and accepting bids suggest it’s open to looking far and wide — and willing to be swayed by generous state and municipal tax breaks whipped up by local governments.
“It’s unusual to go through a [request for proprosal] process, essentially shopping for a new location before any vetting is done on their own for a new location,” said Dennis Donovan, president of WDG Consulting, a location search company.
The U.S. has 55 metro areas with a population over 1 million. Excluding Seattle itself and cities in Puerto Rico (an unlikely choice considering the U.S. territory’s fiscal issues and legal status), that leaves 53.
Though Amazon specified a city larger than 1 million, most experts predict the behemoth will need a much larger metropolitan area.
“Amazon is so large that it itself is a place-maker and a place-changer,” said Susan Wachter, co-director of the Penn Institute for Urban Research at the University of Pennsylvania. “It cannot put itself down in the middle of nowhere because it would overwhelm whatever was there.”
That leaves out college towns like State College, Pennsylvania, or Ann Arbor, Michigan, where more than half of the population is college-educated but which lack proximity to major metro centers, along with their infrastructure.
“Amazon is a prototypical innovation economy company. It relies on a lot of workers with a lot of technical training,” said Joseph Parilla, a fellow in the Metropolitan Policy program at the Brookings Institute. “We’re looking at a combination of factors that might make an attractive labor market, like the quantity and quality of the college-educated force.”
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