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Which City Will Amazon HQ2 Call Home Sweet Home?

Which City Will Amazon HQ2 Call Home Sweet Home?
22 May 2018

Early this year, Amazon.com, Inc. (NASDAQ:AMZN) announced that it had cut down its list of potential hosts for its second headquarters to 20 cities. Known colloquially as Amazon HQ2, 238 cities eagerly bid for hosting privileges. The reason is patently obvious: Amazon.com is a game changer.

With a proposed budget of at least $5 billion, the new Amazon headquarters will create up to 50,000 jobs. And I’m not talking about the package-handling, fork-lifting, mundane labor. The vaunted e-commerce giant stated clearly that these will be high-paying employment opportunities. For individual states and cities facing budget crises, this was music to their ears.

Best of all, Amazon HQ2 will enjoy equal status to the original Amazon headquarters, located in Seattle, Washington. According to the company’s estimates, AMZN generated $38 billion for the city’s economy between 2010 and 2016. To put that into perspective, in 2016, Seattle’s GDP was slightly over $330 billion.

According to a CNNMoney report, the finalists are: Atlanta, Austin, Boston, Chicago, Columbus (Ohio), Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County, Maryland, Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto and Washington, D.C.

But what exactly is AMZN looking for in terms of the ideal candidate for Amazon HQ2? While certain attributes are important, I think we can agree on one thing: Los Angeles is out. The City of Angels is the only West Coast finalist, and it’s too close to Seattle.

I think CEO Jeff Bezos wants a true change of scenery, and I can’t blame him.

That leaves 19 cities with a realistic chance of hosting the second Amazon headquarters. But which one will ultimately emerge victorious?

Will Personal Familiarity Make Washington, D.C. Home to Amazon HQ2?

The smart money indicates that our nation’s capital is the frontrunner for the Amazon headquarters bid. Why? Bezos is very familiar with the area, owning a home there, along with the Washington Post.

Not only that, three of the finalists are located in the Washington, D.C. area. Just like we can surely cross off Los Angeles due to lack of attention, we can also surmise that D.C. has generated significant debate behind closed doors.

In addition, the area scores high on factors that management seeks in a host city for Amazon HQ2. These include “transportation, education, business, lifestyle, culture and connectivity.”

On an intriguing note, Jeff Bezos is a politically-minded person. More to the point, his political views often clash with President Trump’s policies. Trump has recently singled out Bezos and Amazon, so the fact that D.C. is a top finalist probably isn’t coincidence.

Could Washington, D.C. become the second Amazon headquarters out of political spite? Although I don’t view Bezos as being petty, it does make for good speculation.

Could Fairfax Offer a Stunner?

According to real estate appraiser Pro Teck, Amazon HQ2 will touch down on a largely unexpected and overlooked city: Fairfax, Virginia. Why Fairfax, you ask? According to HousingWire.com:

Pro Teck’s analysis shows this community may be well-positioned to receive the 50,000 new jobs expected with HQ2. Not only does the area have a promising housing market and well-educated workforce, but it is also near the Washington D.C. home of Amazon Founder and CEO Jeff Bezos.

One thing we know about Amazon is that it likes to keep its cards close to its chest. The company’s surprising Whole Foods Market buyout proves that you can never predict its strategies and tactics.

But Fairfax? If you drill a little deeper, it’s actually a fairly strong candidate. The entire county has a little over 1.1 million people, which compares favorably to the small towns on the list. More importantly, 60% of working-age adults have a bachelor’s degree.

Fairfax doesn’t have the population size of a New York City, but it makes up for it in quality.

My Personal Speculation About the New Amazon Headquarters

Seemingly everyone has their opinion about which city should host the next Amazon headquarters. In that spirit, I’ll offer my totally speculative idea: Denver, Colorado.

Logistically, Denver makes a lot of sense. It’s home to a major international airport, yet getting to it isn’t a nightmare like in LA or New York. Denver has a robust housing market and a fairly educated population. Furthermore, it’s getting an influx of people who enjoy its big-small town vibes.

In a way, Denver is like Seattle minus the Pacific Ocean.

Now here’s where the speculation comes in. As I stated earlier, Jeff Bezos is politically-minded. The state of Colorado is located roughly in the middle of America. It’s the bridge between the liberal west and the conservative Bible belt.

Should Bezos make Denver great again, he could influence the conservative states neighboring Colorado. Nothing motivates more than the almighty dollar. Plus, he’d probably have more impact in Denver positively affecting people’s (voters’) lives than sucking up to the political elite.

Will Denver be home to Amazon HQ2? No, that honor will go to Austin, Texas. But if Bezos does pick Denver, you heard it here first!

Source: Investor Place

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