Yesterday morning, Amazon announced that it would seek proposals from communities for a second headquarters, roughly equal in size to its South Lake Union campus, to be developed somewhere in North America. The e-commerce giant, which recently completed its purchase of natural grocer Whole Foods Market, intends to spend as much as $5 billion to develop a 50,000-employee campus outside of its Seattle base. In an unusual move, instead of searching privately for a suitable location, the company has opened a formal Request for Proposals from interested communities.
Naturally, communities from Los Angeles to Baltimore have already started throwing their hats into the ring for the massive investment. As is typical, this got us thinking. Could Spokane launch a credible bid?
First, let’s look at Amazon’s high-level requirements.
The firm is looking for collaborative bids from metro areas, and has a preference for areas with more than one million people, a stable business environment, strong talent attraction, and big thinking. While Spokane does not meet the first criteria (the Spokane-Coeur d’Alene Combined Statistical Area has a population of about 700,000, and that stretches “metro area” to breaking point), arguments can be made that the other requirements can be met. The Spokane area certainly has a history of big thinking, having boldly pushed for and hosted a World’s Fair in 1974, against all odds. Its beautiful natural environment, strong quality of life and recreational opportunities, and low cost of living are certainly attractive assets. And observers say Spokane’s economy stays relatively stable even during recessions. Area leaders from Coeur d’Alene to Spokane cite business satisfaction as a major priority.
Next, let’s dig deeper. Amazon cites a number of priorities and key decision drivers in selecting a site location.
- Site and Building Location. Amazon keeps it relatively vague, looking only for “the best buildings available”––whether redevelopment site, public-private partnership, or a greenfield area. In Spokane, while a decade ago Kendall Yards would have been a stellar choice, today we could focus on the South University District. With a new pedestrian bridge under construction, abundant vacant and redevelopable property, and a new Avista project in development, this area has the makings of a great urban neighborhood. If the property acquisition and consolidation can be properly managed, it has the potential and space––Amazon or not––to become our South Lake Union.
- Capital and Operating Costs. Spokane has a leg up on the larger communities: comparatively, it’s quite cheap. Our energy costs are below the national average, and building costs are low compared to coastal cities. Washington State is generally more expensive than other states, so any bid would require a state-level partnership.
- Incentives. Spokane has a basket of limited incentives it can offer, but localities are generally constrained in Washington State, and without a port district we have very few powerful options. Meanwhile, any successful bid would have to win out over incentive-rich states like Texas and Georgia. So for Spokane to have a competitive application, it would have to leverage state-level partnerships and potentially even legislative action.
- Labor Force. 50,000 employees is a lot––especially somewhere like Spokane. Is our labor force workable for a high-tech firm like Amazon? At present, probably not, although our education system has strong points between WSU, EWU, Whitworth, Gonzaga, and UI. To balance out this broadly negative point, combined with Spokane’s relatively small size, Spokane could latch onto a statewide proposal in cooperation with cities like Seattle, Bellevue, and Tacoma and instantly gain access to a wider talent pool which craves Spokane’s lower cost of living and strong quality of life.
- Logistics. Spokane has all the basics––easy access via I-90, a major rail hub, and abundant direct flights across the West Coast to Seattle, the Bay Area, and other locales. We’d lose points on lacking nonstop flights to the East Coast, including New York and Washington, D.C.
- Time to Operations. Revamping the Avista Development proposal for the South Landing of the pedestrian bridge could be a way to expedite construction. Given that Amazon wants at least 500,000 square feet for Phase I, additional property would need to be assembled and entitled, which would take additional time.
- Community Cultural Fit. We’d gain points on our universities and commitment to education, as well as our history of big thinking. We’d lose points on workforce and cultural diversity, and we’d probably lose a few points on business climate among elected officials. While most would be nominally on-board, some fringe elements (see: Matt Shea, Spokane Valley City Council) could raise questions.
- Quality of Life. We’ve touched this already. It’s great!
So would Spokane be able to put together a competitive proposal on its own, with cities like San Jose, Los Angeles, Chicago, and Baltimore in the running? Probably not.
But a statewide proposal focused on expanding and retaining Amazon, potentially leveraging sites in Seattle, Bellevue, Tacoma, Vancouver (WA), and Spokane, could be difficult to beat. This would allow the Washington State government to assist in incentives and by utilizing tools not available to localities. It would also distribute the benefits of any such development across the state rather than concentrating them in already-prosperous areas, like Seattle. Anchored by strong transportation infrastructure, such as the expanded Seattle transit system, an expanded I-90, and potentially even statewide high speed rail, even residents outside of Amazon employees or Amazon-adjacent employees could see considerable benefits.
In Spokane, this could mean a smaller campus of 10,000 – 25,000 people in the South University District, with the remaining employees split among localities across the state. Bellevue (which recently received a major Amazon expansion), Everett, Tacoma, Vancouver (WA), and Seattle are all credible choices.
Is it bold? No doubt. It throws out the rules of the Amazon RFP process, creating a campus structure for Amazon more like a state university system (for example, WSU has locations in Pullman, Spokane, Everett, the Tri-Cities, and Vancouver) than a tech company. But it’s sufficiently creative and interesting that it wouldn’t be tossed out of hand.
Is it unthinkable? No, it isn’t.
If our area economic development officials are watching the hoopla over Amazon HQ #2 with envy, looking on as communities with more than a million people excitedly launch bids, they should hop on the phone with communities like Seattle, Bellevue, and Tacoma. They should call up the Washington Department of Commerce and our state legislators. Amazon is an important firm to our state, no matter how you feel about it, and the HQ #2 process puts all of that at risk. What better way to double down than to collaborate with communities across the state?
SHARE YOUR THOUGHTS: What do you think? Should Spokane launch a bid for the new Amazon headquarters, either on its own or with partners from across the state? How important is Amazon to the statewide economy? Do you see it on the level of Boeing or Microsoft? In Spokane, where would you put a new Amazon campus? Share your thoughts on Facebook, on Twitter, in the comments below, or in person. We love to hear from you!