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Amazon HQ2 Search Starts in Atlanta, Georgia?

Amazon HQ2 Search Starts in Atlanta, Georgia?
18 Dec 2017

Earlier this year, Amazon created a lot of buzz among communities when it announced it was looking for a second home in North America, dubbed HQ2.

With an anticipated investment of over $5 billion in construction and a workforce of around 50,000 people, HQ2 would a huge prize to any community.

The company issued a RFP (Request for Proposal) for communities to apply to the company to consider their city or region for the new HQ2 location. In the RFP Amazon also mentioned details that are important to them in selecting a location for HQ2.

From the outset, there were always a few “obvious” contenders that seemed to tick many of the requirements spelled out by the company. Also, these locations had natural fits for a tech company due to an existing heavy presence by the industry.

In short, the top 5 “most obvious” choices include:

  • Austin
  • San Jose
  • Atlanta
  • Boston
  • Dallas/Ft. Worth

With the end of the RFP in October, the company announced it had received 238 proposals from 54 states, provinces, districts, and territories across North America.

It is important to note, the company did not define the search as being only in the United States and several Canadian cities participated in the RFP as well. Toronto was often cited as the most logical Canadian city, but others have applied.

Since the close of the RFP period there has not been a shortage of rumors, speculation, and news about where Amazon HQ2 could land.

We even reported last week that studies keep emerging that try to predict the most likely location for Amazon HQ2. Many seem to come up with similar results and pretty much include the “Obvious 5” among others.

A popular study often cited in the media is by author and researcher Bert Sperling who compiled studies from 18 sources into one summarized report (Microsoft Excel).

While the “Obvious 5” are not the Top 5, all are present. And if you look at the various rankings from the different studies in the Sperling summation, it is easy to see regional biases.

Local news reporters and politicians have been searching for any clues on Amazon’s thinking, and finally the first real clue may have emerged.

Atlanta Georgia, the Early Favorite?

The Atlanta Journal-Constitution reports that Amazon now has an in-house lobbyist at the State Capitol.

On December 7, lobbyist Jacob Oster registered with the State Ethics Commission. His expertise is in technology and clean energy, and he listed addresses in Washington D.C. and Seattle and stated “retail” as the purpose of his lobbying efforts.

While Amazon operates fulfillment centers in Georgia, it appears a bit unusual for the company to have a lobbyist just for warehouses.

The newspaper reached out to Oster, but he referred the inquiry back to Amazon. And the company was equally uncooperative with their request.

Amazon listed a number of factors in choosing HQ2, which includes a vibrant tech labor force, fiscal health, cost of living, college population, cultural fit and state tax rank.

As with any such business decisions, it will likely come down to tax incentives being a big part of the selection decision. But other factors will sway the company if the businesses end of the deal is similar to other cities and regions.

Georgia and Atlanta are still keeping the bid secret as allowed by state law, and little has emerged what they offered to Amazon. Georgia’s recruiters are mostly holding quiet as they probably see a significant benefit to keep other bidders wondering.

So Let’s Take a Look What Makes Atlanta a Good Fit

Before we start, let’s define that with Atlanta, we actually mean the Greater Atlanta Metropolitan area (MSA) which makes up about 5.7 million residents and ranks number 9 in the country.

The state of Georgia also plays a significant role in the selection process, and Georgia is considered a Pro-Business state that ranks high in workforce training, global access, and infrastructure.

The Atlanta area boasts headquarters from major Fortune 500 companies including, The Home Depot, UPS, Coca-Cola, Delta Airlines, First Data, SunTrust Banks, and others.

It is also home to one of the top public technology focused colleges in the Georgia Institute of Technology (Georgia Tech). Amazon has put a lot of emphasis on education and local talent.

“We are looking for a location with strong local and regional talent—particularly in software development and related fields—as well as a stable and business-friendly environment to continue hiring and innovating on behalf of our customers.”

Amazon Statement on RFP website

With Georgia Tech and the University of Georgia nearby, as well as a number of other public and private universities around Georgia, there is a lot of local young talent available.

And besides headquarters for top companies, many major Fortune 500 companies operate remote offices in Atlanta. This also provides a pool of potential highly educated business professionals that may want to change careers.

Source: MARTA

For a southern city, the area has one of the more functional public transportation systems with MARTA (Metropolitan Atlanta Rapid Transit Authority), and the city seems committed to expanding public transport.

Amazon is high on public transport and energy sustainability. Recently the company opened its largest wind farm in Texas and it stated these two factors are important to them.

While wind may not be the best option for Georgia, solar is part of Georgia Power’s push toward a more environmentally friendly future. Amazon could play a role in bringing more solar to Georgia.

The Atlanta area ticks a lot of the tangibles and intangibles on Amazon’s RFP. Other cities can make similar claims and the competition among the top cities will be fierce.

If all other requirements are equal or similar, there may be one Amazon wish list item that could move Atlanta to gain the top spot.

ATL The Ace in The Hole?

Hartsfield Jackson Atlanta Airport (ATL) may be the Ace in the hole. Amazon in its RFP noted that good connectivity to global destinations is one of the factors in the selection process.

ATL is the busiest airport in the U.S. with over 50 million passengers per year.

Compare ATL to LAX (Los Angeles) which is number 2 in that metric and handles over 10 million fewer passengers. That’s a huge difference.

The Atlanta airport has approximately 169 daily non-stop flights, many serviced by Delta Airlines and ATL is Delta Airlines’ main hub. The airline may be a factor as Seattle’s airport is a secondary hub for the carrier.

Delta Airlines is also a member of the Star Alliance which means code shares with major international carriers such as KLM, Air France, Lufthansa, Air China, and 23 other airlines that service a total of 1,300 destinations.

Only Dallas/Ft. Worth (DFW) with American Airlines as its hub tennant could be a significant competitor in this category. DFW has more non-stop flights, and American Airlines is part of the OneWorld alliance which also includes major international codeshare partners, but “only” serves over 1000 destinations.

Is air travel really that important?

SJC (Norman Y. Mineta San José International Airport), which services San Jose and Silicon Valley and is less than one hour away from San Francisco’s main airport (SFO) has a significant global carrier presence.

It has non-stop international flights from global airlines such as British Airways, Lufthansa, Air China, Hainan Airlines, and Ana Airlines.

Usually, a smaller airport that close to a major airport with many international carriers serving the region already would not attract the same carriers. So the Silicon Valley tech industry is the driving force why these global airlines fly to SCJ.

Therefore, one should not underestimate the importance of global travel to a company of the size of Amazon.

And Amazon with 50,000 anticipated employees would become Atlanta’s largest private employer, dwarfing number 1 employer Delta Airlines, which employs just over 31,000people in the area.

Changing Demographic

Another feather in Atlanta’s hat is the apparent transformation from an old world typical southern city to a modern, millennial-aged and highly educated population.

The Atlanta area boasts a variety of cuisines, sports & entertainment options, and many nearby outdoor activities such as hiking, kayaking, or going to the beach for the weekend.

In other words, the quality of life for Atlanta residents is pretty good, and the weather is mild and reasonable.

The area is home to many professional sports teams and just this year added an MLS (Major League Soccer) team in Atlanta United FC. While soccer is not the top sport in the U.S., the attendance success of the franchise even surprised many followers of the game.

Why is the attendance of soccer games a telling glimpse of the changing demographics of Atlanta?

Soccer is becoming a sport played and followed by many millennialsMillennials are also known as Generation Y, Echo Boomers or Millenniums. They encompass the age group of 18-35 as of 2017. With over 71 million in the US population, they are the largest working group…. It still has a way to go to surpass Football, Basketball, or Baseball in total attendance, but TV ratings and league wide attendance are rising.

Atlanta United FC holds the single game MLS attendance record of 71,874 with an average season attendance of 48,200 per game. That is NFL Football attendance territory!

Source: Atlanta United FC

Now compare Atlanta to Seattle (2017 average attendance 43,666), which up to this year was the leader in attendance in the MLS.

And one can see how Atlanta is changing and attracting a younger “more modern” millennial-aged resident.

And that age group is going to be the workforce for the next 30 years.

Atlanta is Not a Lock

While we have touted some of the benefits of Atlanta, it not a lock by any means. Other cities rank very highly in ticking Amazon’s wish list for HQ2.

But the fact that Amazon has registered a lobbyist with the State of Georgia does seem to indicate the executive level in Seattle also believes Atlanta and Georgia could be a good fit.

Undoubtedly, we will hear from other cities and areas as Amazon news on HQ2 trickles out. And someone will be very happy in 2018 when the company announces the winning bid.

Source: eSeller Cafe

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Marijana