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Site Selection Takes Center Stage in Amazon HQ2 Search

Woody Hydrick
2:05 read

Next week, more than 40 of the world’s most prominent site selectors will gather in Cincinnati, Ohio for the Annual Conference of the Site Selector’s Guild. We will gather to discuss the latest location trends across a broad spectrum of investment profiles, i.e., manufacturing, corporate headquarters, warehouse/distribution, data centers, etc. Hundreds of economic development (ED) professionals will also attend, hoping to glean new insight into attracting and retaining business investment for their communities. Considering that many of the EDs in attendance submitted a bid for Amazon HQ2 or have been tracking it closely, it is certain this will be a hot topic of discussion.

Amazon certainly knows a thing or two about creating buzz.

Site selectors obviously maintain a bit of bias when it comes to Amazon’s decision to conduct an open bid process for siting their second North American headquarters. Some argue that with the monolithic amount of data at Amazon’s disposal, they must surely have had one or two locations in mind for HQ2 all along. So why have cities from every North American state and province jump through hoops to submit a bid? As Joe Parilla, a fellow with the Brookings Institute, noted on Twitter, Amazon’s RFP was clear from the start that the company wanted no more than one bid per region and that only metro regions with populations greater than 1 million would be considered. The RFP also clearly identified Amazon’s strong desire for access to public transportation for their up to 50,000 employee workforce. As we all know now, more than 200 cities submitted bids, the majority of which have far fewer than 1 million residents, many from the same region, and most without substantial public transport systems.  Amazon is not to blame for so many unqualified bids.

Another criticism about Amazon’s public search process is that it’s nothing more than an attempt to secure unprecedented tax incentives from cities and states. From my firm’s experience in conducting site searches for more than 1,000 companies, this criticism doesn’t ring true.  Whether it’s a public or a private search, the capital investment (~$5 billion), job volume (~50,000), and the incredible payroll this could represent in positions such as sales, legal, accounting, administration, etc., is all the information state and local officials need to justify an attractive incentive package offer.  Amazon is making a long-term corporate commitment to a community and their employees will be making a commitment to living, earning, spending, and paying taxes in that community as well. One could even argue that by making the search public incentive offerings could be reduced for fear of public outcry.

Whatever Amazon’s reasons for making its search for HQ2 so visible, I for one am delighted.  Their public search, and the interest paid to it by the general public and press, has created a media frenzy, produced a viral Saturday Night Live skit, and provided great fodder for dinner table conversation in homes across the world.  Their search has helped raised the profile of the site selection industry to unprecedented heights. No longer do I receive quizzical stares when I tell someone I just met that I’m a site selector.  Every person on our team at Global Location Strategies has at least one college friend, neighbor, or relative who has said, “Oh, like with Amazon. Now I get it. So, do you represent Amazon?” The answer to that is, “No. I wish, but I do manufacturing. Like steel mills.”

For manufacturers seeking confidentiality for a site search, Global Location Strategies is well positioned to help you find a community that can support your growth.  And, no, you do not need to create 50,000 jobs to get our attention.  

Follow me on LinkedIn @ www.linkedin.com/in/woody-hydrick and on Twitter @Woody_Hydrick, or email me at woodyhydrick@globallocationstrategies.com.