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Will Amazon Call Boston it’s New Home?

In September, Amazon announced a new development project for a second headquarters, HQ2. But the retail giant lacks a location for their new, massive venture. Amazon is soliciting proposals from North American cities for the next headquarters—a city other than the current headquarters location, Seattle.

Seattle is home to the current Amazon headquarters, but the company in uncertain Seattle can handle its continued rapid growth. As Seattle’s housing prices rapidly escalate and road congestion intensifies, Amazon has asked that any American cities (which meet Amazon’s HQ2 location criteria) interested in hosting its second home propose their interest to the company.

HQ2 is an extraordinary opportunity for one North American city. Amazon provided the HQ2 project will bring 50K new jobs and cost an approximate $5B to develop. Not only will HQ2 bring high-paying jobs to the host city, but many tax breaks among other incentives will be in-tow.

U.S. cities and states did not hesitate to express interest in hosting the new Amazon headquarters. An aggressive bidding war is expected to ensue among strong contenders. To be a strong contender, the city or state bidding to host HQ2 must meet and exceed Amazon’s meticulous factors for the HQ2 development site.

Amazon’s Factors Considered for the HQ2 Location

Among Amazon’s criteria for the HQ2 development location include population, transportation, technology, and lifestyle factors. The city hosting the second Amazon headquarters must be a metropolitan area with a diverse population of more than 1M people, and the proposal must include a list of the city’s universities and statistics depicting the qualifications of the local workforce.

The HQ2 development site must have direct access to mass transit, be within two miles of an arterial road or major highway, and within a 45-minute commute to an international airport with nonstop flights to Washington D.C., Seattle, San Francisco, and New York City. Candidate cities will also have to hand-over traffic congestion figures.

Bidders must supply evidence of fiber optic internet connection and strong cell phone service at the potential development site.

Additionally, Amazon seeks a city with abundant recreational activities, and a welcoming and business-friendly atmosphere—as a corporate giant, Amazon must consider the cost of conducting business in potential HQ2 host cities.

Amazon’s strict criteria for the new headquarters location eliminates many cities from being in-the-running. Regardless of the cities left behind, there is an abundance of cities eligible and eager to submit their bids and reap the incentives HQ2 would bring to their metropolitan area and beloved residents.

Cities in the Race for HQ2

The same day Amazon announced its selection criteria for the development of HQ2, many cities like Dallas, Chicago, and San Francisco (and the entire state of Michigan) declared their interest in hosting the new headquarters. Amazon made clear that all cities which met the development location criteria would be equally considered to host the HQ2 project.

A business consultancy agency analyzed 35 metropolitan areas which met Amazon’s detailed list of considerations. Among the top contenders listed was Boston—ahead of Washington D.C. and Philadelphia, but New York City ranked number one. Forbes also suggested among the top five candidates to host HQ2 was, at number five, Boston—just behind Pittsburgh at number four.

Boston boasts Boston Logan International Airport, the extensive Massachusetts Bay Transportation authority mass transit system, and smart city technology. Bostonians are a largely technical and highly-skilled workforce, and Boston’s proximity to top universities like Massachusetts Institute of Technology and Harvard is ideal.

Though Boston may meet Amazon’s meticulous criteria for the development location of HQ2, it’s unlikely that all 50k new jobs will be locally sourced, so where will the newcomers live?

Does Boston Have the Space to welcome HQ2 and it’s 50K Person Team?

Boston boasts a top technical workforce and business environment, but it is questionable whether the highway and mass transit systems will be able to handle the influx of people the Amazon headquarters would bring.

For comparison, up to 8M-square-feet of office space will be developed in the Amazon HQ2 project which is a whopping 1.4M-square-feet larger than the Pentagon.

Analysts who have considered Boston as a contender to host the new Amazon headquarters accounted for a myriad of factors related to the new development project including workforce skills, job growth, the university system, tax incentives, and the quality of life and mass transit. Their verdict: Boston doesn’t have the space or real-estate available to host HQ2.

The development of Amazon’s second headquarters will occur in phases, so being selected to host the HQ2 project wouldn’t result in an immediate surge of 50K new Bostonians. But eventually, housing will have to catch up to meet the added demand from Amazon employees. It is very likely that many current Boston residents would be further pressured to relocate to the suburbs due to increased rent prices. It’s been projected that the new Amazon headquarters will cause rent prices to increase by an additional 2-percent—which would add to the current issue of rising rents and maintain Boston's status, if not boost it higher, on the list of U.S. cities with the highest rents.

Despite any heightened housing and congestion issues HQ2 may bring, Boston’s mayor has announced interest in Amazon bringing HQ2 to Boston and provided that Boston is the prime host choice of the Northeast, but he is not interested in joining the HQ2 bidding war Amazon is seeking.

Boston’s Bid for HQ2 is In.

Boston’s mayor provided that he wasn't interested in joining a bidding war, but Boston’s 218-page bid to host HQ2 was submitted—and the verbiage within may indicate otherwise. In Boston’s bid to host Amazon’s next headquarters, the city promoted Bostonians’ talent and education as well as the city’s history—and they threw in two videos and upward of 30 letters supporting Boston’s thriving ecosystem to do so.

The city’s bid was titled “Boston. Yes.” And Massachusetts’ governor was onboard, committing to marshal all that the state had to offer for Amazon’s next headquarters.

The specific location offered to Amazon to develop HQ2 is Suffolk Downs—a 161-acre plot that was a horse-racing venue in its past life. The HYM Investment Group owns the site and already has plans in place for a massive multi-use development project including 10K residential units, 20-percent of which were ear-marked for Amazon employees in the proposal.

The Suffolk Downs site meets the meticulous Amazon HQ2 location criteria, and Boston’s chief of economic development named it the perfect site: suitable enough to compete against any other top proposal.

Though Amazon stated they would consider each proposal equally, Bloomberg reported that Amazon senior executives favor Boston.

The HQ2 bidding period has now ended.

The HQ2 development project will roll out in phases. Boston’s bid declared that the city could complete phase one, a 500K square foot building, by the end of 2019, and all 8M-square-feet of Amazon’s second headquarters by around 2027.

Regardless of whether Amazon brings HQ2 to Boston, Amazon has a business history with the city and will maintain a presence with the new Fort Point Channel Amazon office—the Fort Point Chanel office will open next year and accommodate 900 employees.

Amazon is set to render a decision regarding the location where HQ2 will break ground in 2018, until then, we wait.

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