After pitching aggressively and offering up millions of dollars in tax incentives, Denver landed a coveted economic development deal earlier this summer.
No, the Colorado capital didn’t win Amazon’s second headquarters, though it is still in the running. But VF Corp., the retail parent of brands like The North Face, JanSport, and Timberland, selected Denver as its future home. Starting next summer, the company will move from Greensboro, N.C. Although there are a number of reasons VF Corporation selected Denver, the city’s status as a finalist for Amazon HQ2 — one of the most visible and competitive economic development contests in history — didn’t hurt.
The process of vying for Amazon’s HQ2 has helped the city and state better compete for companies like VF Corp., said Sam Bailey vice president of economic development for the organization that handled Denver’s Amazon HQ2 bid.
“It was a great process for our community to compete with one voice, one proposal for the entire state, submitted by the private sector, to tell our story and not just use it to attract this investment from Amazon, but change perception of other companies,” he said.
It’s been a year, to the day, since Amazon announced plans to open a second headquarters in another North American city. The surprise announcement set off a frenzy of news coverage and speculation. More than 200 cities applied for the $5 billion campus and in January, Amazon narrowed the field to just 20 cities.
Only one will win the coveted prize, a headquarters equal to Amazon’s first in Seattle, with room for up to 50,000 tech workers. But the competition has raised the profile of all 20 cities, and the 19 that don’t land Amazon HQ2 won’t walk away empty-handed.
Nearly 3,000 news articles have been written about Denver and Amazon HQ2 since the project was announced last September, with 94 percent coming from national media publications, according to Bailey.
In the Washington, D.C. metro area, the pursuit of Amazon HQ2 fostered collaboration between three neighboring regions. D.C. proper, Northern Virginia, and Montgomery County are all in the running for Amazon’s second headquarters.
The two states and the district were deadlocked over a new funding plan for the Washington Metropolitan Area Transit Authority. To push a deal through, officials cited the competition.
“Amazon is watching,” Virginia lawmaker Vivian Watts told the state legislature. Mobility and public transit are key considerations for Amazon as it weighs the HQ2 decision. Ultimately, the three jurisdictions reached a deal.
The HQ2 bid “really gave us something to shoot for,” said Brian Kenner, Washington D.C.’s deputy mayor for economic development, via phone this week. “It gave us a reason to need to really come together and talk about some of these things.” Though Kenner said he couldn’t directly link the deal to the Amazon competition, he said “HQ2 might have accelerated that a little bit.”
Publicity from the contest also helped a delegation of D.C. officials on a visit to Silicon Valley earlier this year, he said.
“The conversations that we had out there were much easier, frankly, because people knew us from the HQ2 worldwide press that we were getting,” he said. “Washington, D.C., and the Washington region wasn’t as much of a surprise to them. Plus I feel like our pitch was a little bit easier to make because we put a lot of time and energy into how we were organizing ourselves around HQ2.”
The smaller cities included in the top 20, like Columbus, Indianapolis, and Pittsburgh, are also leveraging the increased exposure the competition brings.
“We’re not a community that comes to top of mind for a lot of folks so I think it’s going to be a huge ability for us to build awareness as to what’s going on in Columbus,” said Steve Schoeny, Columbus’s director of development.
But in many cases, the costs that go along with these benefits aren’t yet clear. Many cities haven’t released details of the tax breaks and other economic incentives that they’ve offered as part of their bids for Amazon HQ2.
“There’s one part of Amazon’s HQ2 competition that is deeply disturbing — pitting city against city in a wasteful and economically unproductive bidding war for tax and other incentives,” wrote Richard Florida, an urbanist with the University of Toronto and editor for CityLab, in a CNN article. “As one of the world’s most valuable companies, Amazon does not need — and should not be going after — taxpayer dollars that could be better used on schools, parks, transit, housing or other much needed public goods.”
Florida claims that by selecting three jurisdictions in the D.C. region and two in the New York region for the shortlist, Amazon is pressuring cities to compete with tax incentives. He says selecting multiple communities in a region is a “textbook way to extract maximum tax incentives and giveaways.”
In a report today, Axios cites another benefit for Amazon from this process: “The information effectively provided Amazon with a database chock full of granular details about the economic development prospects of every major metropolitan area in the United States (and some in Canada),” writes Erica Pandey of Axios. “For a rapidly-expanding tech behemoth like Amazon, that database could help it make expansion decisions that go way beyond the new headquarters.”
Kenner says he views the inclusion of D.C., Montgomery County, and Northern Virginia as a win for the region, even if only one city can land Amazon HQ2.
“We think that there are strengths and weaknesses with each one of those sites,” he said. “As a region, we put forward our individual strengths that we saw, not really knowing what Amazon wanted.” He added, “all of us were very happy that when they came back with the short list.”
Earlier this year, Amazon sent officials to each of the 20 cities contending for HQ2 to do recon. The company has also been collecting additional information from the cities beyond their original bids. Amazon plans to announce the winning city by the end of 2018.