Salivating municipalities across North America are touting their ability to fulfill the criteria specified in Amazon’s RFP for selection as its HQ2. And with good reason: Amazon promises $3.7 Billion in capital investment, projecting 33 new buildings consisting of over 8 Million square feet, 40,000 new high-tech jobs earning $25.7 Billion, and untold civic benefits.
Like a kid spending her birthday gift card on Amazon.com, each city clicks through the various RFP criteria: Stable and friendly business environment? Check. Access to strong technical talent? Absolutely; if we build it, they will come. Existing buildings and development potential? Erm, okay, we’ll figure that out. Connectivity and sustainability? Sure, sure. Just buzzwords, we’ll be fine. Each city promises expedited real estate development, tax incentives, transportation and infrastructure improvements and local university interface. Why not?
But something is missing from their proposals. And it’s the one distinguishing factor that is likely to tip the scales when negotiating with Jeff Bezos and his warp speed sense of timing:
In order to be selected for HQ2, your city must legally function as a nimble, top-down private partner.
In other words, the selected city must demonstrate that it has the legal authority and mandate to carry out a public-private partnership with Amazon. This means having in place a legislatively-approved Redevelopment Authority or similar body that will deliver on the city’s commitments to Amazon. Amazon must be able to verify that the selected city can provide a one-stop point of interface for matters such as land use approvals, tax incentives, community development grants and transportation funding.
As shocking as it sounds, Seattle itself cannot provide this crucial ingredient, and that’s the unspoken reason why Amazon is looking elsewhere.
“Hang on,” you say. “If Seattle didn’t have this working in its favor, what explains the cluster of Amazon buildings, the massive capital investment and the throngs of employees walking around the South Lake Union neighborhood just outside your office window?”
It would be a huge mistake to think your city could back step into Seattle’s shoes and replicate Amazon’s HQ1 without a top down authority with eminent domain power. Seattle’s Amazon campus is different because HQ1 is the result of phased planning, and the following happy accidents:
- Paul Allen, through Vulcan, had aggregated huge, contiguous parcels of land, primarily with the goal of contributing it to a grand, Central Park-like project.
- That project fell apart, making possible what is now the fairly narrowly distributed Amazon campus in Seattle.
- Amazon snuck up on Seattle, like it snuck up on the rest of the known universe. It grew relatively slowly over time, and it slowly drove, rather than competed with, the competitive tech hub that Seattle has now become.
Today’s Seattle probably couldn’t compete for HQ2. The only way for Seattle to say “I’m sorry” would be to replicate something like Sound Transit, which is the public agency funded through a public vote with jurisdiction to carry out transportation improvements over Snohomish, King and Pierce County.
You can’t bluff Jeff Bezos. If you want to negotiate with him to emulate the glory of its existing urban campus in Seattle, you need a Redevelopment Authority, or its functional equivalent.
Governors, call your state legislature into session now!
Photo Credit: William Carleton