By Laura Stevens
Amazon.com Inc.'s search for a second headquarters location has
disappointed a couple hundred small towns and big metros across
North America.
But there is a silver lining, which officials at some losing
cities say they factored into their applications -- the chance to
tout themselves to Amazon as a destination for a smaller
investment, such as one of the data centers and warehouses the
company is rapidly building in the U.S.
Amazon on Thursday announced 20 finalists, selected from 238
North American applicants, to be its so-called HQ2. The company
expects to finalize its choice this year and has said the winner
can expect up to 50,000 high-paying jobs and $5 billion in
investment over nearly two decades.
Amazon added, in a statement, it learned about new communities
that it will consider for future projects.
"There'll be one bride and over 200 bridesmaids," says John
Boyd, principal at the Boyd Co., which helps companies select
sites. "It's still a very valuable process for cities that fall
short."
Amazon has started to reach out to some losers. Small-business
owners who proposed Anchorage, Alaska, for HQ2 knew it was a long
shot. Because of its location, the city -- which boasts flight
times of 9.5 hours or less to 95% of the industrialized world --
already hosts major United Parcel Service Inc. and FedEx Corp. air
hubs and could prove attractive to Amazon as it develops its own
logistics network.
Meghan Stapleton and Carmen Baker, two business owners who
hand-delivered Anchorage's proposal to Amazon headquarters, said
one of the company's economic-development team members called
Thursday to say he appreciated their efforts and planned to contact
the state's economic development team to discuss further
possibilities, although he declined to specify what they might
be.
"We made another pitch on our call on our merits, making sure
that we're on their radar," Ms. Stapleton said. "That was all we
wanted, was to be considered for a place at the table."
Amazon's individual logistics and operations facilities to date
don't compare with the scale of HQ2, but the company is on a
construction tear. According to estimates by supply-chain
consultancy MWPVL International Inc., which tracks Amazon warehouse
growth, the company now has about 320 fulfillment centers, sort
centers, hubs and other logistics facilities in the U.S. That's up
from 239 a year earlier and 77 five years ago.
Amazon also has been opening data centers and offices around the
world. And it held a job fair in August to hire 50,000 mostly
warehouse workers across the country, part of its larger pledge to
create more than 100,000 full-time U.S. jobs through the middle of
this year. Its number of employees topped 540,000 in the third
quarter, up about 77% from the same quarter in 2016, in part due to
its acquisition of Whole Foods.
An Amazon spokesman said the company invested more than $100
billion in the U.S. between 2011 and 2016.
Typically, a new warehouse, such as one Amazon recently
announced for a Baltimore suburb, brings roughly 1,500 full-time
jobs with benefits, as well as millions of dollars in investments
and further advantages, such as additional indirect job
creation.
Still, those blue-collar jobs tend to be hourly, often paying
starting wages between about $12 and $14 based on location. That
compares with the promised average salary at the new headquarters
of $100,000 a year. And those new jobs can be tough, requiring
heavy lifting and standing all day.
Major cities held an edge in Amazon's headquarters competition,
given requirements like population size and transportation options.
But that didn't stop less-prominent locales from trying, including
small, rural towns like Rockdale, Texas, and bigger cities like
Birmingham, Ala., which on Thursday tweeted an Amazon smile logo
underlining "HQ3?"
Officials in some smaller areas said getting on Amazon's radar
for possible investments was a factor in their HQ2 application.
"We feel that there's a future for Amazon here in the state of
Idaho," said Clark Krause, executive director of the Boise Valley
Economic Partnership. He said he hopes Amazon chooses to locate a
future new development there. "I don't know exactly when that would
be, but I think we're well positioned because they don't have a lot
of distribution points in the state," he said.
His group promoted the region's cluster of companies with food
logistics expertise to Amazon, which last year bought Whole Foods
in an expansion into groceries. "We knew they weren't coming" for
HQ2, Mr. Krause said, but "hey, if you're inviting us to talk to
you, we're going to take that opportunity."
Still, many applicants won't be considered for new projects. And
some local governments have drawn criticism for wasting taxpayer
money on long-shot proposals.
Losing out on Amazon could still leave room to use resources
compiled from that process to attract another major company, some
officials said. Long Beach, Calif., proposed a location for Amazon
-- but would also like to woo rival Alibaba Group Holding Ltd. of
China, said John Keisler, Long Beach's director of economic
development. The city is banking on its expertise as a logistics
hub between the companies' two home countries.
Connecticut publicized pieces of its proposals to capitalize on
the enormous attention around Amazon's contest and to try to draw
interest from other companies, says Catherine Smith, commissioner
of the Connecticut Department of Economic and Community
Development.
Connecticut knew "it's a long shot for HQ2," she said. But "I
think the process itself was very valuable for the state."
(END) Dow Jones Newswires
January 19, 2018 11:54 ET (16:54 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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