Amazon's New HQ?

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Tiller
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Re: Amazon's New HQ?

Postby Tiller » September 10th, 2017, 12:15 pm

According to Google/Bureau of Labor Statistics:
Denver has 2.8M people and 1.6M labor force with an unemployment rate of 2.4% (!)
Austin has 2M people and 1.1M labor force with an unemployment rate of 3.2%
We have 3.5M people and 2M labor force with an unemployment rate of 3.3%.

I think Toronto has an excellent chance of landing this. They have twice our population, 3.5M workers, and an unemployment rate of 6%. They have the amenities Amazon is looking for too, without America's dumb immigration laws.

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Anondson
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Amazon's New HQ?

Postby Anondson » September 10th, 2017, 12:24 pm

Toronto has nearly Bay Area-like housing price problems. I’ve heard Canada has pretty strict immigration laws when it comes to employment long term.

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Re: Amazon's New HQ?

Postby alexschief » September 10th, 2017, 3:38 pm

Obviously one reason for Amazon's approach to this is to get publicity out the wazoo. Mission accomplished on that front.

But it's important to remember that Amazon is fully capable of doing demographic research and weighting the results. While interesting, looking at how US and Canadian cities stack up in terms of the criteria Amazon has listed is ultimately a bit pointless, because we know that Amazon can easily do the same thing, and probably already has. If they're still doing this RFP process, that indicates that those factors alone are far from decisive. I'm sure Amazon has a shortlist, and they're probably not going to give Tucson's bid too close of a look, but I don't see why the top ten to eleven cities would not all have a chance.

What Amazon doesn't know, and what their RFP's specific purpose is to learn, is information about sites and information about incentives. I take them at their word that these are the key factors, because everything else they list (again) is publicly available info, but site information is highly localized and incentives are obviously enhanced by a bidding war of this scale. The RFP lists the site as the primary factor and the incentives as the secondary factor, and I take them at their word on that front as well. This is why it's really tricky to predict, once you've narrowed the list down to those ten or eleven cities. I can only speak to three of them in terms of available sites; I have no idea what, say, Denver, can offer. You can probably make an educated guess that the western candidate cities are more likely to have available land directly in the downtown core. But as to the specifics, I have no idea.

In terms of the three cities I do know, MSP, NYC, and Philadelphia, I think Minneapolis-Saint Paul has a great chance if Amazon highly prizes cheap land that it can completely remake, and with politicians who will support it. Philadelphia will likely pitch three sites: the primary one being the Schuylkill Yards development, and possibly the North Philadelphia Station area or the Navy Yard. These sites are extremely well connected, especially by train and highway to New York and DC, and the first to UPenn and Drexel University, and the second to Temple University. Philadelphia will also likely offer compelling incentives on top of the considerable existing incentives already operating in the city. But any Philadelphia proposal will suffer from the city's terrible politics, strict union work rules, and costly land. New York would likely pitch the already-occurring Hudson Yards development, which is in an unbeatable location in terms of prestige, but will be extremely expensive and wouldn't be ideal for Amazon's workers, who would be priced out even at $100,000/yr. And New York is the only city on the list that really doesn't need Amazon at all, so I can't see them making a significant incentive offer.

There's probably an additional X-factor which the RFP doesn't mention, which is how much Amazon cares about highly specific traits of each city. If they want HQ2 to focus heavily on retail, MSP has a great shot because they will want to be able to battle Target and Best Buy for their talent. But if they want HQ2 to focus a lot on tech, they're more likely to choose Boston or Denver. But it's impossible to estimate how much these things matter, only sufficient to note them. If I'm MSP, I'm definitely pitching Amazon on the potential to make the city become a kind of "Silicon Valley for retail," in which a concentration of talent in one industry has tremendous multiplier effects. But I'd do so knowing that might not be what Amazon wants at all.

Either way, I hope the discussion moves away from demographics a bit and turns towards site availability. I'd be fascinated to hear from other cities which sites are in play.

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Re: Amazon's New HQ?

Postby MNdible » September 10th, 2017, 7:51 pm

I'll just note that in addition to its strengths in retail, MSP is also very strong in logistics, another area that Amazon cares a great deal about.

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Re: Amazon's New HQ?

Postby seanrichardryan » September 10th, 2017, 8:49 pm

Then why do Target's supply chains keep failing? ;)
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Re: Amazon's New HQ?

Postby Anondson » September 10th, 2017, 8:54 pm

I think MNdible’s referring to CH Robinson?

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Tiller
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Re: Amazon's New HQ?

Postby Tiller » September 11th, 2017, 2:01 am

An article with coincidently similar stats about a redevelopment site in Chicago:

https://chicago.curbed.com/2017/5/15/15 ... ed-midwest
Expected to be one of the largest real estate developments in Windy City history, the $5 billion project will include 10 million square feet of residential and commercial space for the sprawling site.
Construction is unlikely to begin before 2019. Related Midwest and design partner Skidmore, Owings & Merrill have yet to release formal plans for the site’s redevelopment and still need to publicly engage the community and city prior to gaining any zoning approvals. According to estimates from some experts, the entire project could take up to 15 years to complete.

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Re: Amazon's New HQ?

Postby VacantLuxuries » September 11th, 2017, 8:44 am

Construction is unlikely to begin before 2019.
That wouldn't work with their timeline, that's when they want to open.

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Re: Amazon's New HQ?

Postby QuietBlue » September 11th, 2017, 9:04 am

Toronto has nearly Bay Area-like housing price problems. I’ve heard Canada has pretty strict immigration laws when it comes to employment long term.
I thought a few cities in Canada were possibilities at first, but having thought about it more, I think it would be an extremely politically risky move right now.

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Re: Amazon's New HQ?

Postby min-chi-cbus » September 11th, 2017, 9:21 am

I had heard that Amazon's focus may shift towards healthcare and biomedical stuff (scary!). That being said, that would obviously benefit MSP as well. IFF that's the focus of HQ2, then I'd think that would highlight the following cities on their list based on this resource alone (in no particular order):

Hartford (home of Aetna and Cigna, near NYC)
Baltimore (John Hopkins Hospital/research univ.)
Indianapolis (home of Anthem and Wellpoint)
Minneapolis (home of Medtronic and other biomedicals, near Mayo Clinic, home of UHG)
Boston (Mass General Hospital, biomedical/tech)
Cleveland (Cleveland Clinic, Case Western research univ.)


If Amazon's focus is also going to shift more towards the foods industries (i.e. Whole Foods), then MSP is interesting considering its abundance of businesses in that niche (General Mills, Cargill, Supervalu, Post/MoM, etc.).

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Tiller
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Re: Amazon's New HQ?

Postby Tiller » September 11th, 2017, 11:05 am

Construction is unlikely to begin before 2019.
That wouldn't work with their timeline, that's when they want to open.
My implication/speculation was maybe Amazon was in talks with the developers at one point, thus the similarities. It's probably safe to say a caveat-ed statement about a development site from back in may isn't binding in any sense, especially given the magnitude of HQ2.

It'd be awesome if Amazon was planning on branching out into healthcare, because that'd give us a better shot at HQ2 being built here. How exactly could/would Amazon get involved in healthcare though? I could see them being involved via computing and logistics, though you'd think they'd be a bit more ambitious than staying in their current lane(s).

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Re: Amazon's New HQ?

Postby xandrex » September 11th, 2017, 11:29 am

If Amazon got involved in health care, it would almost certainly be patient/provider-side care. Probably something like your Prime membership gets you free or cheap wellness checkups and discounts on AmazonHealth procedures. They’ve got enough cash that they could massively drive down the price of some common stuff that happens at the doctor.

Now why they’d want to get involved in such a complex area is another matter.

The sell here is probably going to have to be around our retail presence and maybe our agribusiness.

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Re: Amazon's New HQ?

Postby Didier » September 11th, 2017, 12:08 pm

It's an interesting point. Amazon is already a huge company, so it's hard to believe they'd need to create a second (huge) headquarters in some arbitrary place just so they can sell more stuff on their website.

The New Yorker had an online story this summer about Amazon's business model, and how it already goes way beyond simple retail. Here's a key excerpt:
Ben Thompson, a technology analyst who writes the blog Stratechery, has proposed an extraordinarily useful model for understanding Amazon’s reach. He argues that Amazon works by dividing the world of commerce up into building blocks, which he calls “primitives.” Some “primitives” are business-facing: servers, databases, warehouses, delivery trucks. Others are consumer-facing: books, music, clothing, television shows. Amazon makes money by allowing its customers to combine these primitives in unusually convenient and efficient ways. Using them, it’s possible to run a whole company from within the Amazon ecosystem, with servers running in Amazon’s cloud and products stored in and shipped from its warehouses. Amazon itself launches new businesses using the primitives it has mastered. Many people have seen the Whole Foods acquisition as a way for Amazon to sell fancier groceries online, while using its larger scale and greater efficiency to lower prices. But, in Thompson’s view, the acquisition is best understood as giving Amazon access to new, grocery-based primitives, such as fruit, vegetables, meats, and food-ready warehouses. He suggests that the company will launch “Amazon Grocery Services,” a subsidiary that farmers or small manufacturers might use to sell, warehouse, and ship their products. Restaurants could stock their kitchens with it, too.
Also, while searching for that link above, I found a Wired article called "Does Amazon Really Need a $5 Billion Second HQ? Maybe." But it's still mostly speculation, not really answering this key question of why?

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Re: Amazon's New HQ?

Postby SurlyLHT » September 12th, 2017, 6:52 am

Amazon on the St Paul riverfront would be great, but I think it'll have to be part of a larger plan? I also think they're fooling themselves a bit with regards to the transit options in Downtown St Paul. They're not terrible, but compared to even across the river they're lacking. /http://finance-commerce.com/2017/09/dea ... available/

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Re: Amazon's New HQ?

Postby SurlyLHT » September 12th, 2017, 6:59 am

More news. Hodges doesn't seem super excited and is asking Target and Best Buy what they think.

"Hodges, in her statement, doesn’t say whether or not she wants Minneapolis to be part of the bid for Amazon, or whether the city would offer any kind of incentives. She did, however, say she met with Greater MSP to discuss what Amazon (NASDAQ: AMZN) coming here would mean to Minneapolis. Greater MSP will be working with the Minnesota Department of Employment and Economic Development on the bid, which is due Oct. 19"

[url][/https://www.bizjournals.com/twincities/ ... ut.htmlurl]

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Re: Amazon's New HQ?

Postby MNdible » September 12th, 2017, 8:35 am

Strong leadership from Hodges.

xandrex
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Re: Amazon's New HQ?

Postby xandrex » September 12th, 2017, 9:05 am

I dunno. I took Hodges’ statement as generally positive. If she wanted to come out against subsidies for a big company she could have (she did it for MN United, after all). But she didn’t.

She probably can’t come out with full-throated support during this election. It’s a race to the left, so several of the candidates could take advantage of her stance. Saying she’s talking to Target and Best Buy is just good politics. Look like you’re protecting the incumbent employers and all that. Reading between the lines, I’d say she’s probably mildly supportive of getting Amazon.

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Re: Amazon's New HQ?

Postby MNdible » September 12th, 2017, 9:11 am

No doubt, mild support from the mayor is exactly what Amazon is looking for in a bid.

This gave her an easy opportunity to show her acting mayoral (and show she's not totally beholden to a small group of party activists). Opportunity, punted.

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Re: Amazon's New HQ?

Postby xandrex » September 12th, 2017, 9:21 am

My reply was to SurlyLHT’s comment, though I forgot to quote it.

No doubt the milquetoast support doesn’t do us any favors.

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Re: Amazon's New HQ?

Postby mplsjaromir » September 12th, 2017, 9:50 am

Does the office of Minneapolis mayor have the policy making chops to make a proposal in 72 hours? I would rather have a mayor propose regionally altering decisions with some sort of plan. Maybe Amazon is or isn't a good fit for Minneapolis. To blame the mayor for being cautious is silly.

Being mayoral goes beyond heedlessly offering subsidies to every big rich business man who asks.


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