Texas Seems Primed to Land Amazon’s Second Headquarters
But the competition is tough.
Amazon is headquartered in Seattle, but it may be heading to Texas as fast as it can. The online commerce giant announced last week that it is searching for a city to build a second corporate base, according to the Wall Street Journal. Every single big city in Texas has pounced on the opportunity and joined a fierce nationwide bidding war.
The company laid out a pretty detailed wish list for its “HQ2” project, including a metropolitan area with more than one million people, on-site access to mass transit, a commute of 45 minutes or less to an international airport, easy access to a major highway or arterial road, and close proximity to good universities, plus fiber optic internet connections and strong cell phone service. “We want to invest in a community where our employees will enjoy living, recreational opportunities, educational opportunities, and an overall high quality of life,” Amazon’s announcement said, adding that the company is also looking for “communities that think big.”
Based on that list, it sounds as though most of the cities in the Lone Star State would fit the bill. So would a lot of cities in other states, too, but Texas cities have brisket and breakfast tacos, which gives us an inherent advantage, at least in the “overall high quality of life” category. And, of course, no one thinks bigger than we do in Texas. John Wittman, a spokesman for Governor Greg Abbott, said in a statement to the Austin American-Statesman that the state will “aggressively court Amazon in the hopes that it expands its footprint in Texas and establishes its new headquarters here.” Austin, Dallas, Fort Worth, Houston, and San Antonio have all expressed interest in landing HQ2.
Mike Rollins, president and CEO of the Greater Austin Chamber of Commerce, told the Statesman that the city would put forward a bid. “Definitely we want to compete, and compete hard and would like to win,” Rollins said. “We feel like we have a great case to make, if we’re fortunate enough to be selected to make our case.” Austin is on many short lists right now to win the bidding war. It already hosts offices for major companies like Apple, Google, Facebook, Microsoft, and Samsung, and it checks off a lot of other things on Amazon’s wish list. It has a major university in the University of Texas at Austin. It also has a booming population and a high quality of life. Bezos is no stranger to making deals in Austin, either, as Amazon recently bought Austin-based grocery chain Whole Foods. Rollins told the Statesman that he thinks Austin has an “excellent” chance of earning a bid.
Dallas jumped in almost as soon as Amazon made its announcement. “We will aggressively demonstrate that Dallas and our surrounding area would be the perfect spot for their expansive business needs,” Mayor Mike Rawlings said in a statement last week, according to the New York Times, adding that city representatives were already talking with Amazon about the next steps. “There is no better place than right here for Amazon’s HQ2,” Mike Rosa, senior vice president for economic development of the Dallas Regional Chamber, told the Dallas Morning News. Like Austin, Dallas is also among the early favorites to land the headquarters. Dallas has a booming population, and is one of the top talent hotbeds in the country for tech workers, according to a recent report by real estate company Commercial Real Estate Services. The region is already home to the headquarters for major corporations ExxonMobil and AT&T. Dallas has another unique advantage: according to the Morning News, Amazon recruits heavily at the University of North Texas in nearby Denton, which offers the nation’s only digital retailing degree.
Dallas’s neighbor, Fort Worth, wants in on the bidding war, too. According to the Fort Worth Star-Telegram, city leaders said last week that they are working on an economic development package. “We’re looking at all the different options on the table,” Brandom Gengelbach, executive vice president of economic development at the Fort Worth Chamber of Commerce, told the Telegram, adding that the chamber staff is “thoroughly reviewing and understanding the [request for proposal] and developing a response to represent Fort Worth in the best light.” As the Telegram notes, Fort Worth has pretty strong connections to Amazon, which has fulfillment centers in the northern part of the city and in nearby Haslet. The city’s Alliance Airport has a newly expanded runway that can transport fully-loaded cargo planes to Asia, which is also a big plus. Amazon CEO Jeff Bezos has personal ties to Fort Worth, too—his sister lived in the area in the late 1990s, and during his visits to her he’d always stop at the same restaurant to buy salsa, Bezos once told the Telegram in an interview. Would Bezos give Fort Worth HQ2 just so he’d have an excuse to make pitstops for great salsa? It’s not totally out of the realm of possibility. At least for us.
Houston’s also in the mix for HQ2. “The city is very interested,” Alan Bernstein, a spokesman for mayor Sylvester Turner, told the Houston Chronicle. “The city is checking on the procedures for officially being considered, and the city is excited and feels like it’s well positioned for a number of reasons.” As the Chronicle notes, Houston is a pretty appealing destination. It’s the fourth-largest city in the country, and it has plenty of open office space downtown thanks to the recent downturn in the energy industry. It has several major college campuses, including the main branch of the University of Houston and Rice University. But it lacks a strong tech scene.
Last but not least, San Antonio will throw its ten gallon hat in the ring, too. “A local team comprised of the San Antonio Economic Development Foundation, the city, county, and private-sector partners is engaged and ready to pursue the opportunity,” Erica Hurtak, spokeswoman for the San Antonio Economic Development Foundation, said in a statement, according to KSAT. “San Antonio is primed for an initiative of this size, and while competition for the site will be aggressive, we are confident in the assets our community has to offer.” The Alamo City shares some of the same advantages as its Texas brethren, like a high quality of life and a booming population, and it has a pretty low cost of living. But, as the San Antonio Express-News notes, it falls short in a few important areas—notably that it doesn’t have a ton of space for HQ2 downtown and doesn’t offer much in the airport department. “The shortcoming we have, and everyone knows about it, is the airport,” Bexar County Judge Nelson Wolff told the Express-News. “That would be a very big challenge for us to overcome for a corporate headquarters that big. Other than that, I think we would be in the ballgame.”
Competition is steep, with cities like New York, Chicago, Boston, and Toronto also in the running for HQ2, which is expected to create up to 50,000 jobs. But Texas may have a leg up thanks to its business-friendly reputation and its strong history with Amazon and Bezos. In addition to the recent Whole Foods purchase, Bezos chose the Sierra Diablo Mountains in West Texas to build his “10,000 year clock.” The launch facility for his aerospace manufacturing company, Blue Origin, is located in Van Horn. Amazon has a giant wind farm project planned for Scurry County, between Abilene and Lubbock. And the company has order fulfillment centers all across the state, including Houston, San Antonio, Dallas, Haslet, Coppell, Fort Worth, Irving, Schertz, and San Marcos. According to the Morning News, Amazon already employs 20,000 Texans.
Bezos’s personal roots in the Lone Star State run deep. When he was younger, he’d spend summers on his grandparents’s ranch in Cotulla, where he’d help out with branding, vaccinating, and castrating cattle. “You definitely don’t want to be outside in Cotulla, Texas, in the summer from 1 to 4 in the afternoon,” Bezos told the Morning News in a 1999 profile. “I spent 10 summers there. But 10 summers in 107-degree heat count double.” Bezos moved from his native New Mexico to Houston as a toddler, and he spent his early schooling years in the Bayou city, attending River Oaks Elementary School and graduating in 1976 before moving to Florida as a sixth grader. He’s even cousins with George Strait.
Although Bloomberg reported on Wednesday that several senior executives in Amazon are pushing hard for Boston to win the bid for HQ2, apparently lower-rung employees (they go by “associates” in Amazon corporate-speak) would prefer to live in Texas instead. From Bloomberg:
Picking Boston would disappoint many Amazon employees with families hoping for a more suburban location like Austin, Texas, that offers affordable housing options beyond apartments and condominiums, said Brittain Ladd, a supply chain consultant who used to work for the company and still knows a lot of people there. What’s more, Austin is home to Whole Foods, recently acquired by Amazon for $13.7 billion. “Texas is absolutely the best choice from the perspective of associates,” Ladd said. “Amazon associates are sick and tired of living in cities with high rents and congestion.”
Also, Texas has way better barbecue than Boston.
Proposals are due by October 19, so Texas cities have to act pretty fast if they want to be considered. Amazon will make a final selection and announce the new location sometime in 2018.