Amazon’s Second Corporate Headquarters Worcester Proposal
In September, Amazon expressed its interest in investing more than $5 billion in the construction of its second headquarters. It invited proposals from cities and metropolitan areas where the buildings would be erected. The proposals span across 54 provinces, states, and districts in North America. Major metro areas such as New York, Washington D.C., and Boston have been mentioned as well as midsized cities such as Austin, Raleigh, Worcester, and Pittsburgh. Amazon predicts that the corporate headquarters would create up to 50,000 high paying jobs. A breakdown of proposals submitted for the bid shows Worcester is an ideal city for the construction of the project. However, Amazon declared it would make the final decision next year.
With nearly 19 percent of Seattle's housing and office space prices skyrocketing and increased competition for tech talent and traffic congestion, Amazon is looking for a province, city, or state that can handle its growth prospects, hence the plan to build a second corporate headquarter.
Amazon's second headquarters now dubbed HQ2 will resemble its Seattle campus. In its request for proposal (RFP), this leading online retail store highlights that it is looking to erect the structure in a metropolitan area that has more than one million people and has a stable, business-friendly environment. The city should also have suburban or urban locations that can attract and retain prospective technical talent and creative communities when it comes to real estate options and locations. Note that HQ2 does not have to be:
- Similar to its Seattle campus
- A downtown or urban campus
- A development-oriented site; Amazon aims at encouraging states to think creatively about potential real estate opportunities
Amazon will also consider areas with existing buildings, infill sites, greenfields, or a combination for the project. If the current buildings can be retrofitted within an acceptable schedule and budget, it may consider the option. However, since Amazon may not find existing buildings that can meet these requirements, the proposal indicates that it will prioritize certified greenfields and infill opportunities. The company has outlined the requirements for the different categories:
- Existing buildings should occupy over 500,000 square feet
- The greenfield site should occupy 100 acres with a utility infrastructure
- Infill sites meeting logistics and proximity requirements of the project also qualify for the plan
Other Site Requirements
- The site should be within thirty miles to the population center
- It should be close to the international airport (a forty-five-minute drive)
- One to two miles to arterial roads and major highways
- Direct access to mass transit channels- bus routes, trains, rails or subways
Investment of Capital
The project is estimated to cost over $5 billion within the 15-17 years. It will be conducted in three phases with varying budget approximations. The fourth phase is projected to grow organically with the capital investment escalating to more than $ 5 billion. Where an existing building is selected for the project, the amount of capital required to purchase and retrofit it will depend on its condition. Additionally, since Amazon will continue to invest in the facilities to provide state-of-the-art working areas for employees, states, cities, and metros should consider such factors as they suggest potential construction sites.
As earlier highlighted, the project is expected to create up to 50,000 full-time jobs with every employee earning an annual pay of $ 100,000. Amazon plans to begin looking for strong talent after the selection of the final site. The actual rate may differ from the projected wage rate based on the existing rates of the selected location. Employment benefits feature a Leave Share and Ramp Back program that offers a health insurance, retirement plan, and a maternity leave.
Amazon's Seattle Headquarters
Amazon's current headquarters-Seattle Washington features an urban campus that has employed more than ten thousand employees. The company has fostered the development of downtown Seattle with an abundance of coffee shops and restaurants along with the redevelopment of Denny Triangle and the South Lake Union. The year 2017 saw Amazon receive an award as the City Maker by Seattle's Downtown Association.
Amazon estimates to have made an investment worth $ 38 billion in Seattle from 2010-2016 with every dollar generating an additional $ 1.4 for the city's economy.
To begin with, Worcester is the state's second-largest city. Home to the mnemonic smiley face, the city offers a large piece of land and various monetary incentives in a bid to woo Amazon to award it with the bid. In its proposal, the city offers a 98-acre site split into a 53.9-acre parcel, 22.2-acre parcel and 21.9-acre parcel along Worcester's east side, currently owned by several private developers. Two of these parcels are located along the MBTA Commuter rail line and are divided by Route 20.
In its bid, Worcester has also included Auburn's three sites as potential development areas for Amazon; an 8.85-acre parcel in 317 Washington St, a 16.74-acre parcel at Southbridge's 614, and a 56-acre parcel at 190 Washington St.
Apart from the development sites, Worcester's bid to Amazon features a lucrative tax saving plan of up to $500 million in local property tax and 100% exemption on personal property taxes over a twenty-year period if Amazon agrees to build the HQ2 in the city. Worcester is also going to provide a HUD Section 108 loan worth $1 million that would be later waived if Amazon managed to create 100 permanent full-time jobs to low-income residents of the city within three years of operation.
The city also fits Amazon's criteria for access to a highly educated workforce as it is home to nine colleges and universities and more than 35,000 college students; the College of Holy Cross, Worcester Polytechnic Institute, University of Massachusetts Medical School, and companies like Table Talk Pies, Hanover Insurance Group, and Polar Beverage. Worcester also boasts a high population of millennials who hold Bachelors and advanced degrees.
Proximity to the Airport
Worcester's growing innovation, location, and proximity to Boston Logan International Airport, Worcester Regional Airport, Manchester Regional Airport, Bradley International Airport, and Green Airport in Rhode Island and rail terminals connecting New York and New England makes the city a good fit for Amazon's project.
Low Cost of Living
While Seattle is a little advanced when it comes to innovation, population, and general development, the cost of living is higher compared to that of Worcester. For example, a resident earning a salary of $50,000 in Seattle can survive with an income of $30,255 in Worcester. However, Worcester does not meet all the qualification criteria highlighted on Amazon's proposal. For example, the international airport takes more than the required forty-five-minute ride, and the metropolitan area does not have more than one million people.
Other Prospective Cities
Amazon's announcement to set up their second corporate headquarter in one of the metropolitan states in North America attracted up to 238 proposals. Apart from Worcester's bid, there are other applications from different cities and states.
While the state's officials remain reluctant in sharing the contents of their proposal, Atlanta meets most of the qualifying criteria that Amazon is looking for. The city has been ranked second, primarily due to the high scores in human capital. Atlanta also boasts a population of six million residents and makes an excellent supply-chain hub with an escalating tech workforce. It also hosts Hartsfield Jackson International Airport, which is a global port of entry.
The state also unveiled its interest to house Amazon's HQ2 along Suffolk Downs that is located on the Eastern side of Boston. Suffolk Downs is in proximity to the airport and the highway and is accessible to public transportation. Their proposal offers 161 acres of land, featuring five hotels, Amazon office space, and street front retail in Suffolk Downs' neighborhood. Unlike Worcester, Boston's plan does not include any financial incentives. However, Boston presents an exceptional talent pool for any city vying for HQ2 as it provides access to popular schools like MIT and Harvard University.
The city has a strong talent pool, provides different transportation options and an affordable cost of living for most residents. During a promotional campaign, Philadelphia's officials hyped the city's strong talent pool, quality of life and open layout as the primary elements of its bid. Additionally, Philadelphia's proximity to other East Coast business hubs makes it a good fit for Amazon's project.
Apart from its status, the city flaunts multiple ties to Bezos, Amazon's CEO. Bezos owns the Washington Post, and he recently bought a property near the town, providing a convenient location for the company's operations if the city is selected. The city also offers easy access to rail hubs, airports, and boasts a large talent pool given its proximity to the best colleges. Brookings D.C. officials stated they were ready to pitch four potential building sites for the bid.
The state provides a business-friendly environment and has a low cost of living. Based on business environment criteria, Austin ranks highest as it features a dynamic tech-savvy economy, rapid job growth and the effective incentives it offers to businesses. Unlike other states, Texas has taken a low-key approach to Amazon's invitation to bid for the multi-billion project.