It has been a little over a year since Amazon announced its search for a location for its second headquarters. The huge announcement came on September 7th, 2017. The project – known as HQ2 – is predicted to bring 50,000 high-paying jobs to the chosen area and over $5 billion in investment.
After receiving 238 bids for the headquarters, Amazon whittled the list down to 20 cities in January 2018. Company execs toured each city earlier this year. Since then, there has been a marked hush on the proceedings, mainly because of non-disclosure agreements which bidding development agencies had to sign.
Within the coming weeks, Amazon is expected to release a shortlist of U.S. cities that are still in the running for its new $5 billion, 50,000-person second headquarters. Experts are predicting that these cities will be large and in the Eastern United States.
Competing cities currently include:
- Los Angeles
- New York City
- Washington DC
- Montgomery County
- Northern Virginia
No clues have been divulged by Amazon executives as to who leads the ranking, though surveys show that Atlanta, Austin, Dallas, and Washington DC are top favorites to win. The metric Amazon is using to assess each city is unknown, though the company says it is taking into account features such as housing affordability, tech talent, and incentives offered by cities, states, and organizations.
How Did We Get Here?
Amazon officially opened for business as a bookseller on July 16, 1995, by founder Jeff Bezos. Within the first four weeks, Amazon had shipped books to all 50 U.S. states and 45 other countries. By the close of 1996, the company had accrued over $15 million in revenues, and the following year, Bezos made the company public and raised another $54 million.
In 1998, Amazon expanded its product range to include CDs. The following year it added more products, including tools, toys, and electronics. By the next year, Amazon had delivered 20 million items to 150 countries around the globe and Bezos became Time magazine’s man of the year.
In 2000, Amazon invited individual sellers and outsider merchants to advertise their products on the Amazon website. Seven years later, the Kindle e-reader made its debut, and within just a few more years, Amazon was selling more e-books than print books. 2011 saw the launch of Amazon’s tablet, the Kindle Fire. Over the past ten years, Amazon has also launched a TV and movie studio, cloud computing, and an online art marketplace. The company has also acquired other companies, including Kiva Systems, Twitch.tv, and Zappos shoes.
What to Expect from Amazon HQ2
Even in a prosperous city, the arrival of such a sizable HQ2 will be transformative. This has already been proven by the effects HQ1 has had on Seattle. And while bidders wait with bated breath for Amazon’s decision, debates on public policies are raging, with topics ranging from tax incentives to support for struggling communities.
If Amazon’s past influences in Seattle are a reflection of what is to come, the impact of HQ2 should lead to:
- A major increase in employment
- An explosion of tech jobs
- The growth of new entertainment, dining venues, and outdoor spaces
- Higher quality of life
- New housing
Is it All Just Hype?
Perhaps it’s too much to expect a complete repeat of the boom that Seattle experienced. However, it is reasonable for the winning city to expect major changes in its economy with the $5 billion to be spent on campus and the predicted 50,000 jobs and an average salary of around $100,000. But Seattle has also seen a downside to the Amazon impact. For example, the influx of tech specialists has driven up average house prices by 69 percent since 2012. It has also increased income inequality, which is reflected in the comparison between the average tech salary, which in 2017 was $98,215, while more than 50 percent of Seattle’s residents earned an income below $50,000. Another downside for Seattle is the traffic congestion, now the fourth worst city in the country.
Were Bezos to build HQ2 in a less popular city, say Detroit, these negative factors would be greatly outweighed by the benefits.
According to company officials, that is probably not going to happen, and Bezos has stated that he wants an environment like Seattle. Disadvantages aside, the home to HQ2 would benefit from more tax revenue for schools and services.
Although Bezos has not offered any hints as to which city will be the winner, he has announced that the nomination will be made by the end of the year, so progress is definitely being made.