Bird's eye view of Chicago at Sunset

How An Amazon HQ Could Change a City

The search is on for where to build a second Amazon headquarters. It’s being hailed by some as “the deal of the decade” for North American cities, but how would successfully becoming the home of this huge headquarters change a city, for the better and the worse?

Amazon is looking to bring up to 50,000 jobs to a new second headquarters, and they are opening up their search to any city across North America that meets their requirements. From an economic standpoint, luring Amazon to your city could gain you the title of the next Silicon Valley/Beach/Mountains/etc. The urban economics principal of agglomeration argues that if you land the Amazon bid, other technology and distribution firms will benefit from locating near them, and cluster in your city. Becoming home to Amazon is a major influx of guaranteed development and tax revenue from one of the most profitable tech companies in the world.

Even with hyper-specific demands and requests for tax credits, mayors and regional leaders from across the US and Canada are publicly announcing their intent to lure the tech giant to their municipalities. One of these demands is that the city have a population of over 1 million people, narrowing down the search to just over 50 metropolitan areas, according to a report by Brookings. Digging further into Amazon’s demands, the list of qualifying cities quickly shrinks. But the prospects are seen as so high that every potential contender who could make the case for their city is throwing their name in the ring. Even some from Seattle, the home of their current headquarters, are making the argument that Seattle should also be home to their second headquarters! Why not have -both- to capitalize on all the benefits the expanded company headquarters will bring?

The rose-coloured glasses of 50,000 jobs and $5 billion dollars of development is perhaps too alluring for most cities to question at what cost such development may come. In an article titled “Amazon’s red herring” Richard Shearer looks at the downsides to bidding on this project:

“Amazon has set the table in a way that ensures that just about every community that plays this game will lose, and not just because all but one place will come away without the grand prize. Many elected officials and economic development professionals will work tirelessly over the upcoming weeks and months to put together the most competitive bids their public coffers will permit. They will do this at a time when the country and many of these places face very real economic and social challenges that will not change that much from Amazon’s expansion, all on the hope for growth that is destined to happen somewhere, but probably not there. Meanwhile, one very unlucky place that ultimately ties the knot with Amazon will pay dearly for something it probably could have gotten for free.”

Much like bidding for the Olympic games or the World Cup, this cost of entry into the race comes at a huge cost. What cities will be willing to take on this risk? CNBC has ranked cities based on the qualifications that Amazon is looking for, and determining that New York, Atlanta, Chicago, San Francisco and Boston are the front runners for the distribution giant. On the other hand, the New York Times concludes that the only city which meets Amazon’s qualifications is Denver. Whether or not these cities put together a proposal in the end is yet to be seen, but wherever Amazon chooses is certain to see a huge change to their urban life from the decision.

 

 

Photo by Ferdinand Stöhr on Unsplash

 

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