Going gaga over Amazon

Its not every day that a company solicits proposals from metro regions and it isn't every day that an entire continent goes gaga over the chance to assemble the biggest incentive package.

Amazon HQ2 will be a complete headquarters for Amazon – not a satellite office. Amazon expects to hire new teams and executives in HQ2, and will also let existing senior leaders across the company decide whether to locate their teams in HQ1, HQ2 or both. The company expects that employees who are currently working in HQ1 can choose to continue working there, or they could have an opportunity to move if they would prefer to be located in HQ2.

Amazon HQ1 in Seattle's South Lake Union (Photo: Amazon)

Amazon's request for proposals (RFP) from metro regions of a million people or more to place a full scale $5 billion second headquarters has the nation's already turbulent newsrooms and online forums abuzz like another hurricane. Like Irma Amazon's RFP pushes the envelope sitting in the top category of companies looking for a new place (BMW invested $2.2  billion in Greenville NC for its new plant, employing 8,800, Foxxcon plans a $10 billion company location in Wisconsin).

Economic development directors across North America hopped out of bed extra early at the prospect of landing such an investment and as many as 50,000 employees, even if phase one of HQ2 would only entail between 500,000 and a million square feet. In the end the corporate giant may need as much as 8 million square feet of space, almost three times of what will fit on HarborPoint per the latest approved plan.
Cities are scrambling to be the first to through out the welcome mat.  A source close to Chicago Mayor Rahm Emanuel told CNN Tech the mayor has spoken "several times" with Amazon CEO Jeff Bezos about the second headquarters. Toronto's Mayor John Tory said in a statement that the city is a "prime candidate" for Amazon's second headquarters. Other cities in the news on the first day of the announcement include Pittsburgh, Dallas and Boston.

Like in other states, Maryland's entire phalanx of professional representatives and boosters from Councilman Eric Costello, BDC CEO Bill Cole, Mayor Catherine Pugh, County Executive Kevin Kamenetz to Governor Larry Hogan are out to make their pitches known. The private sector is right on their heels: Predictably, Under Armor's Marc Weller recommends his planned Port Covington new town as "the perfect home" for Amazon.

The begging has begun

"More than any other place in the country, Baltimore City and Port Covington would be a perfect home for Amazon’s second corporate headquarters." Marc Weller

Indeed, Port Covington, especially if combined with Westport could accommodate Amazon per their specs without even redrawing much of the proposed development plan (allowing some 9-13 million squarefeet), probably the only site in the state and one of the very few in the country that can say that. Incentives are already approved. Kamenetz talks up his Tradepoint Atlantic site which is certainly large enough to accommodate even the largest corporation plus whatever they need to support it. Other local sites in the discussion are far less convincing, given that Amazon is certainly looking for the type of urbanity they have in Seattle where their 33 downtown buildings are apparently bursting at the seams necessitating a second headquarter, especially after Amazon just bought Whole Foods.

Under Armour's Port Covington proposal (2016 Sagamore rendering)

World's largest online retailer or not, it is truly remarkable that our economic system has reached a point where a corporate giant can  go out and openly solicit hand-outs from municipalities and metro regions without shame.

Identify incentive programs available for the Project at the state/province and local levels. Outline the type of incentive (i.e. land, site preparation, tax credits/exemptions, relocation grants, workforce grants, utility incentives/grants, permitting, and fee reductions) and the amount. The initial cost and ongoing cost of doing business are critical decision drivers.(From the RFP)

When Technical.ly called me asking to comment on possible local sites for Amazon, I suggested that Baltimore turn the quest for incentives around and compile a proposal to Amazon in which it is assumed that Amazon actually needs to give back to Baltimore as a way to give back to the country. (for the full story look here). Already the retail behemoth faces nagging questions about its size, its social commitments and its impact on local retail. This on top of the big questions this nation faces collectively, namely the social and racial bi-forcation and the large amount of people left behind by rapid technological change. Besides that there is little doubt that Amazon is one of the forces behind this development, there is no major corporation in America that can escape these issues and have a sustainable future. Seattle, already home of Microsoft and Boeing had already grown weary of Amazon as the New York Times reports:

Amazon’s reputation in its home city has tarnished over the years. Local activists complain that it is driving gentrification in Seattle, and the retailer’s high-pressure work culture was the subject of a New York Times investigation. It has also been criticized for not being sufficiently involved in the city’s civic life, especially compared to other Seattle-based companies like Boeing, Microsoft and Starbucks. (New York Times)

Even without consideration of societal ills, it is time that these bidding wars over public money incentives to land large private corporations comes to an end. Or as Alan Golombek put it in an article in Real Clear Markets:

As governments compete for glitzy investment projects, taxpayers are being required to take too much of the risk, while private companies hog the reward. It is time to demand that governments stop allowing themselves to be played off against each other.

I am starting to think that picking Baltimore would be a good choice for Amazon, not because we are a top notch city on par with some of the other contenders but precisely because we are not. Instead, because we are emblematic of so many societal issues Amazon needs a city like Baltimore to use its resources to bring this industrial legacy city and many of its forgotten people back on their feet emblematic  for America as a whole. This would boost Amazon's image in the process. The cultural and physical history of former manufacturing cities is a plus even in today's information and innovation age. No doubt, Baltimore has many of the strengths that Amazon is looking for, port, rail and highway access, an educated workforce etc., so it wouldn't be a merely idealistic proposition for the company to settle here at all.

Sparrows Point now Tradepoint Atlantic.: Plenty of space but no urbanity

Baltimore certainly shouldn't be a beggar and not give away the store with whatever incentives are expected up front, so it would take 30 years before the public would break even.

Wth some regained strenght Under Armour may have enough sway to share its own experience with Mr. Bezos, namely that you have to give in order to gain.

Realistically, though, the Mayor and BDC better be prepared to continue the more likely and also more sustainable long and tough haul of planning the future and take small incremental steps of progress that make the people of Baltimore whole again. Nothing advertises a city better than well functioning local government and a content citizenry.

Klaus Philipsen, FAIA

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