So where will Amazon go?
The retailing behemoth has basically grown out of its Seattle birthplace and has scrambled the schedules of city planners and developers alike as it very publicly seeks a second corporate home — “HQ2” — to house its growth plans. Deadline is Oct. 19!
Let me put the company’s request into perspective.
Amazon needs — in a relatively short timespan — to acquire 8 million square feet of office space to replicate its corporate home. That’s loosely equal to what an entire nation of landlords rented out in the first quarter. And we’re talking about a state-of-the-art, modern campus.
Ballpark price tag? $5 billion.
The lure to cities who choose to enter this fray is what goes into those cubicles. Amazon plans to place maybe 50,000 new hires, “with an average annual total compensation exceeding $100,000 over the next 10 to fifteen years,” the request for proposals states.
Adding to the drama is Amazon’s site-selection manifesto that strongly suggests a low-cost bid will not win. The company’s wish list certainly seeks to help Amazon’s bottom line, but it also outlines a search for a diverse, worker-friendly, tech-savvy locale. Oh, and regions under 1 million people … sorry … there will be no new corporate campus in the woods of some small, remote state.
If I correctly translate Amazon’s wishes to big and brash, Southern California has got a serious shot in what feels like a “what city is best” reality TV show.
So, let me share eight key factors I see determining the winning bid, and how the chances of Los Angeles, Orange County, and the Inland Empire stack up.
1. Pro-business
Southern California added 125,000 employers in the last five years, 21 percent growth that tops 17 percent growth in the rest of the state.
This local flock of new business operators apparently doesn’t agree with the usual critics of the region’s business climate.
If Amazon really just wants a pile of tax breaks and a cheap place to live and do business, Southern California is off the list. But the wish list certainly suggests they want a great place for highly compensated employees, too … a huge local strength.
L.A.’s chances? Any city that is HQ to the world’s entertainment business and can corral often-warring local powers into a winning Olympic bid must be taken seriously.
O.C.? Its collection of small cities is rarely unified, so it’s likely Amazon will get several competing bids. (Is that a minus?) It’s hard to argue against Irvine, which has publicly stated it will bid for the project. The city gets high livability scores and is home to the nation’s wealthiest developer — who could easily pay for HQ2!
Inland Empire? Here’s another region that might do almost anything to win, but is that what Amazon wants? Note: Amazon already likes the region enough to have several huge warehouses in the Inland Empire
2. Seattle-like
Amazon’s wish list discusses how the winning bidder will be a place where current employees would feel comfortable.
So put your Pacific Northwest thinking cap on. I’m guessing the ideal candidate is quirky and hip, with a cosmopolitan air and a waterfront vibe.
L.A.’s chances? The western, beach-close communities should have a winning level of buzz. And Downtown L.A. could be quirky enough, too.
O.C.? Since the proposal says the suburbs are chill, the mix of family-friendly lifestyle and killer beaches may look appealing. And don’t rule out a working-class city like Fullerton, either. Apparently, train stations matter.
Inland Empire? If being close to the cultural amenities Amazon desires matters, then the Inland Empire can sell its near-L.A.-O.C. location plus affordable real estate, commercial and residential. Imagine Amazon in Downtown Riverside!
3. Talent
Southern California isn’t Silicon Valley, but if you want to innovate with style, we’ve got the goods.
Attention, Amazon: Los Angeles and Orange counties produced 45,968 college graduates with technology-related degrees between 2010 and 2015. Only New York and Washington D.C. produced more.
L.A.’s chances? Hollywood. Enough said. We’re talking tons of tech talent doing everything from rockets to radio signals. And tons of college graduates from USC and UCLA to the Claremont colleges.
O.C.? Deep bench here, especially with experts in communication technologies and cybersecurity. And lots of managerial and legal smarts, too.
Inland Empire? Logistics experts galore. And there’s a rich supply of UC Riverside and Cal State San Bernardino graduates. And the commute of talent coming from coastal communities toward the new inland Amazon headquarters wouldn’t be horrible.
4. Transportation
Since traffic-jams-r-us, is Southern California cooked?
We hope Amazon’s site selectors don’t find out that the eastbound 91 is the hardest commute in the nation! (Or perhaps someone should tell them overall average commutes are WORSE in New York and D.C.)
Amazon’s wish lists seek information on everything from commute times to mass transit options to bike lanes. So let’s hope congestion isn’t an instant deal-killer.
L.A.’s chances? Can the city’s newish and growing urban rail system finally be the sparkle in somebody’s eye … such as the Amazon CEO’s?
O.C.? Live-work-play. Great urban planning notion. Ready for a workable test near, say, the Anaheim train station? Elsewhere?
Inland Empire? If Amazon dreams of a splashy suburban corporate campus near new, more affordable housing … commutation fears abate. Possible?
5. Ready
Vacancies have become the new real estate gold.
And Seattle has been tapped out. Amazon’s proposal is on the fast track, so the winning region will have ample supply of empty office space now with significant willingness to build more.
Industry stats show Seattle’s office market is roughly the size of Orange County’s … with the nation’s second-lowest vacancy rate. Wonder why they’re looking for HQ2?
L.A.’s chances? Its total office space is roughly double Seattle’s size, and L.A. vacancies plus new construction would hold about four of Amazon’s proposed HQ2.
O.C.? Irvine Co. owner Donald Bren has built four office towers since the recession. And he’s ready to do anything to help bring Amazon to Irvine.
Inland Empire? Can one of the nation’s hottest industrial markets (ahem, warehouses … like several with Amazon inside) snare a major corporate headquarters?
6. Housing
I know what you’re thinking. We’re unaffordable, so we lose automatically.
But if Amazon is honestly thinking of bringing to a region significant numbers of executive-level jobs with six-figure paychecks, Southern California has got lots to offer.
I have to say it, too: Weather counts.
L.A.’s chances? Mansions? Check. Coastal living? Check. Urban options? Check. Classic suburbia? Check. And don’t forget: Aliso Viejo-based FivePoint Communities has plenty of ready-to-build land in Valencia.
O.C.? Home to four of the nation’s top-selling master-planned housing communities. Need I say more?
Inland Empire? Relatively affordable and plenty of ready-to-build lots. This could help satisfy concerns by Amazon about housing for its less-than-executive staff.
7. Game-changer
Amazon’s proposal goes to great length to describe its impact on Seattle.
Sure, part of this is marketing to amp up competing cities that need to justify the cash sweeteners they’ll toss into the bid package.
But I think part of it is Amazon’s desire to help change the fortunes of a region in the process — a true win-win, so to speak.
L.A.’s chances? Could Amazon HQ2 be the spark for a truly revitalized Downtown L.A.? What about redefining South Central?
O.C.? Irvine? Just another “win” for the county’s “company town.” But what about Santa Ana? I hear there’s an empty newspaper headquarters that needs a tenant!
Inland Empire? The region has all the goods to host California’s next great city. An Amazon headquarters could be the needed nudge.
8. Wild card
Look. The Amazon boss bought the Washington Post and Whole Foods.
So he’s (1) unpredictable and (2) willing to pay up for quality. Out-of-the-box thinking is required!
It’s not hard to envision Amazon selecting a giant metro where the company can cherry pick from a region’s best, brightest … and most affordable.
L.A.’s surprise? Imagine if Long Beach won.
O.C.? A partnership with Disneyland.
Inland Empire? At Ontario Airport, Amazon makes the region finally pop.
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