Texans' Love Of Business And Philly's Great Location Could Win Amazon's HQ2
If Amazon uses Moody’s Analytics to determine where it will build its second headquarters, there could eventually be 50,000 Amazon employees swarming Austin's city limits.
Moody's, a financial services company, ranked the top markets vying for HQ2 based on Amazon’s emphasis in its request for proposals on business environment, human capital, cost of living, quality of life and transportation access. While the top 10 includes surprising contenders like Rochester, New York, Austin emerged as the overall winner.
The news that Amazon was willing to build a $5B, 8M SF second headquarters outside of Seattle and fill it with thousands of high-paying jobs sparked a bidding war across North America. Around 50 cities are expected to submit bids to win over the company, and many expect leaders to court the company through financial incentives.
Austin was already viewed as a leading candidate for HQ2 due to its existing tech hub status, but it also trounces other markets in Amazon’s RFP criteria for a stable and business-friendly environment. At $19.1B annually, Texas doles out the most business incentives of any U.S. state. From 2005 to 2012, Amazon received $277M in Texas business incentives for fulfillment centers, making it the largest corporate recipient of state grants.
“A key thing to remember is it often comes down to more than tax incentives,” Urban-Brookings Tax Policy Center research associate Megan Randall said to Bisnow. “Research shows regional factors like infrastructure and workforce and waterways that are beyond a city or state’s control in the short term often make more of an impact.”
Human capital in the form of a skilled workforce is extremely important for HQ2, which is why some view places with a heavy concentration of universities like Boston as extremely competitive in the bidding process. But Moody’s also measured the flow of skilled workers and how easy it will be for Amazon to hire from an abundant supply of relevant labor. Los Angeles, New York and Washington ended up scoring the highest overall for human capital. Dallas and Nashville scored high marks for business environment.
Factors like cost of living and quality of life often presented trade-offs. Areas like Memphis and Oklahoma City got top scores for their lower cost of living, but they did not have the quality-of-life rankings seen by pricier places like New York, Seattle and San Francisco.
Slow and steady might ultimately win out. Consistency pays off in the Moody’s ranking, and, if geography is added to the mix, the cards play in Philadelphia’s favor.
While it never was the leading contender in any of the criteria, Philadelphia was also never the worst. The Pennsylvania city goes from third to first when emphasis is also placed on where in the country HQ2 should be. Amazon would likely want its second headquarters to be far away from its main Seattle campus, and many see the East Coast as the best option. The Northeast corridor offers a presence in one of the country’s most economically important regions as well as easy access to the D.C. political hub where Amazon CEO Jeff Bezos owns both a home and the Washington Post.