By Tripp Mickle and Valerie Bauerlein
RALEIGH, N.C. -- The world's two most valuable technology
companies -- Apple Inc. and Amazon.com Inc. -- are shopping for
cities in which to build new corporate campuses. But with one of
them, you would hardly know it.
Apple Chief Executive Tim Cook this month met secretly with
North Carolina Gov. Roy Cooper to discuss possibly putting a major
new customer-service facility in the Raleigh-Durham area, according
to a person familiar with the meeting. The undisclosed meeting was
tucked into a very public agenda that included delivering Duke
University's commencement address, tweeting from Duke's basketball
stadium and taking selfies with shoppers at an Apple Store.
The secrecy of Apple's effort contrasts starkly with Amazon's
approach. While Amazon's effort to find a second headquarters city
has proceeded with the fanfare of an Olympics host-city search,
Apple is hunting for its newest U.S. location with the stealthy
deliberateness it employs in developing a new iPhone.
Since it announced plans in January for the new campus to house
technical support staff, Apple has said little about the effort.
Mr. Cook has limited his public comments, saying during a March TV
interview only that Apple wouldn't be discussing its search because
it doesn't believe in the "beauty contest" approach.
An Amazon-like competition creates "a case where you have one
winner and a bunch of losers," he said, while Apple's process is
designed to avoid "putting people through a ton of work to select
one" city. "The best things we can do in business is find the
win-win," the Apple CEO said.
Apple's approach has advantages, says Jay Biggins, executive
managing director at Biggins Lacy Shapiro & Co., a corporate
location strategy firm. By limiting publicity, companies can exert
more control over the process, avoid being overrun with outreach
from cities and focus negotiations to get more of what they want,
he says.
The confidential search is more conventional. Mr. Biggins
estimates that more than 90% of companies place new campuses or
relocate existing headquarters without saying where they are
looking, and most don't even say they are looking.
Amazon announced in September it was seeking a location for a
second headquarters, dubbed HQ2, that the online giant says could
bring nearly 50,000 jobs and more than $5 billion in investment
over nearly two decades. Its detailed list of criteria drew 238
applicants, which it narrowed to 20 cities in January, including
Raleigh, Atlanta and three in the Washington, D.C., area. Amazon is
expected to announce its selection later this year.
Amazon said it wanted a public process "to find a city that is
excited to work with us and where our customers, employees and the
community can all benefit."
Amazon's approach may "work competitive spirits into a real
lather," Mr. Biggins said, but it can trigger clashes within
communities over incentives or a blame game if a city is
eliminated. "It became a bit of a circus for many communities," he
said.
However, Amazon's approach also allows it to collect data and
cultivate relationships that it can use for future projects such as
fulfillment or data centers, said Didi Caldwell, founding principal
of Global Location Strategies, a Greenville, S.C., firm. Amazon has
also been more transparent with communities than other companies,
providing them with a clear outline of what the company wants,
wrote K.C. Conway, director of research and corporate engagement at
the Alabama Center for Real Estate.
Apple, which also plans to announce its choice this year, hasn't
said how many employees its new facility will host. Nor has it said
where it is looking, except that it won't be California, where its
new space-age headquarters houses some 12,000 workers, or Texas,
where it has its second-biggest campus in Austin, with more than
6,000 employees. Apple also has data centers in Oregon, California,
Nevada, Arizona and North Carolina.
Local governments haven't spoken publicly about discussions with
Apple, although North Carolina legislators on Thursday announced
changes to the state's incentives package targeting technology
companies that pledge to invest at least $1 billion in the state
and create at least 3,000 jobs.
Apple representatives also have spoken with officials in
Virginia about options near Washington, D.C., the Washington Post
reported last week.
Apple and Virginia officials declined to comment.
Planning a new corporate location is essentially a procurement
process where companies try to get cities and states to offer tax
incentives, cash and land, consultants say. Few are better equipped
to manage that than Mr. Cook, Apple's former chief operating
officer, Mr. Biggins said.
Apple was deliberate when it worked with Austin, Texas,
officials on a 2012 plan to double the size of its operation there,
said Matt Curtis, who worked in the mayor's office at the time and
now runs Smart City Policy Group, a government advisory firm. The
company worked with the chamber of commerce and city and state
officials on an agreement. The state committed to invest $21
million over 10 years toward a $304 million campus that would
double Apple's local workforce.
Apple told Austin officials it also was considering Phoenix,
said Brian Gildea, who worked on Austin's economic development
team. But he said Apple always treated Austin as the front-runner
and negotiations were amicable.
Apple has had operations in North Carolina since at least 2009
when it announced plans to build a $1 billion data center in
Maiden, northwest of Charlotte.
Top executives also have strong ties there. Mr. Cook graduated
from Duke's business school, and Chief Operating Officer Jeff
Williams, who grew up in the Raleigh area, and senior vice
president Eddy Cue also attended Duke.
Northern Virginia could be attractive to both Apple and Amazon
given its deep pool of talent, strong fiber network, and proximity
to political leaders, location experts said.
"There are probably regulations on the horizon for tech, and I
think those companies want to be there to influence them, so they
are smart regulations," Ms. Caldwell said.
Write to Tripp Mickle at Tripp.Mickle@wsj.com and Valerie
Bauerlein at valerie.bauerlein@wsj.com
(END) Dow Jones Newswires
May 23, 2018 05:44 ET (09:44 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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