Thanks, But No Thanks: Residents Fear HQ2 Negative Impacts
Congested roads. Escalating housing prices. A stressed education system.
People who have lived in Denver for any length of time have witnessed these and other negative impacts on a city that is experiencing rapid growth. And it scares some of them to think it could get worse if Amazon selects the Mile High City for its second headquarters, also referred to as HQ2.
In the last 10 years, residents of the Centennial State have witnessed an influx of more than 800,000 people, which has put pressure on roads and bridges and caused housing prices to skyrocket. Colorado is expected to add another 2.2 million people by 2040.
While folks in other cities are keen on the idea of landing Amazon HQ2, most Denver residents are saying, “Thanks, but no.” Even Colorado Gov. John Hickenlooper is on record saying “there will be a sense of relief” if Amazon does not pick Colorado for its HQ2.
Amazon HQ2 would have a profound effect where it lands. It is expected to bring 50,000 jobs and as much as 8M SF of office development to whatever city it selects, but the actual number of people moving to the winning city will be higher when factoring spouses, children and employees from other companies who follow Amazon's lead and relocate to the chosen region, Urban-Brookings Tax Policy Center Research Associate Megan Randall told Bisnow in October.
Just look at what it did to Seattle, where the median price for a home in King County increased 16.1% between September 2016 and September 2017.
It is not that residents are against Amazon — it certainly makes life easier for people like Sweet Cow Ice Cream co-founder Ross Cohen, who orders everything from heart-rate monitors to sous vide cooking devices from the online mega-retailer. But Cohen, whose business stands to gain from more people coming to the region, said he is conflicted about what Amazon HQ2 would mean for a city that is already experiencing so many issues with rapid growth.
“It would bring all sorts of new people here, but where are they going to live?” Cohen said. “I’d be nervous about our infrastructure. What is it going to do to our taxes? What’s it going to do to our highways?”
With a population of 2.8 million, metro Denver had fewer than 4,000 homes listed for sale at the end January, and those homes are not cheap. The average price of a home sold in January was $449,429, according the Denver Metro Association of Realtors.
Road infrastructure? The Colorado Department of Transportation projects it needs $46B to carry it through 2040 — more than double the amount it expects to collect. The majority of its projects are funded through the gas tax, which has remained the same since 1991.
Then there is the water issue that plagues all Western states. In Colorado, the projected shortage of water is 400,000 acre feet by 2015. The state has created a water plan to help address the gap, which is focused on conservation.
These shortcomings are not lost on most residents of the city.
“I’m generally not anti-growth, but I don’t think Colorado needs another big influx of people,” LoHi Athletic Club owner Dave Kaczmarek said. “Nothing against Amazon, but I don’t want any company coming here bringing thousands and thousands of people. We don’t have the infrastructure to handle it.”
Even commercial real estate professionals who stand to benefit from the sheer number of people HQ2 would bring — Amazon has said it would create 50,000 jobs — are not so sure Denver is the right place for it.
“An economic development generator like that is a 500-pound gorilla that would have a massive effect, some of which would be positive but some of which would fray the Denver metro area,” Zocalo Community Development CEO David Zucker said. “The worst among those would be affordable housing. I think it’s difficult to imagine there would be a soft landing of Amazon.”
Zucker suggests that if the city were to offer Amazon any incentives, it would be prudent to negotiate provisions that would mitigate the negative impacts it would have on the city.
Johnson Nathan Strohe founding partner Jim Johnson said in the nearly 65 years he has lived in Denver, he has not seen the city grow at such a fast pace. While winning Amazon would certainly provide more opportunities for his architecture firm to design buildings, he wonders whether Denver can handle it.
“How big do we really want to make this town?” he said. “We used to say it’s a 15-minute town — you can get anywhere in 15 minutes. Then it was a 30-minute town. Now it’s approaching 45 minutes.
Johnson said he is also on the fence about whether Denver should pursue a bid for the 2030 Winter Olympics, which could cost as much as $2B to host. Denver already has much of the infrastructure needed to host the Winter Games in place with Pepsi Center, Coors Field and Mile High Stadium.
"The committee is saying that if we build a housing village for the athletes, it could later serve as affordable housing if it were done correctly. That could be a plus," Johnson said. "But I'm concerned about the impact on the mountains. I think the Olympics would expose a lot of people to Colorado and they'd infiltrate the mountains, impacting the trail systems and the natural resources."
It would not be the first time the city has rejected the Olympics. After Denver tried to win the Olympics for nearly 20 years, the International Olympic Committee awarded the 1976 Winter Olympics to the city. While politicians were thrilled, Denverites and other Coloradans pushed back. They did not want to pay for it and they were worried about the environment. Ultimately, the Olympics went to Innsbruck, Austria.
Progressive Urban Management Association President Brad Segal acknowledges that Denver’s infrastructure cannot handle the added pressure that comes with more people, but said this could be an opportunity to fix what's broken.
“We should be luring Amazon by demonstrating to them that we’re investing in the civic infrastructure that lets them site here,” Segal said. “To me this is an opportunity for the city to really invest in itself. If we don’t, I’m concerned they would overheat a market that’s already hot. I think Amazon is a great thing. What a coup it would be if we got it. But we need the infrastructure to support the added boost in the economy.”
United for a New Economy Executive Director Felicia Griffin, whose organization advocates for good jobs with decent pay, said the jobs Amazon would bring would be great, but the region would pay a high price for them.
“We’re already in the middle of a housing crisis, and we have a transit system that is not able to handle the population growth that we’ve had in the last few years,” Griffin said. “I’m concerned that our elected officials are excited to bring Amazon in, but we’re not protecting the folks that are here. Low- and middle-income workers are going to shoulder the buden with housing prices and the transit issues.”