Amazon Chooses 20 Finalists for Second Headquarters

Amazon Chooses 20 Finalists for Second Headquarters

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According to people briefed on the process who would speak only anonymously because the deliberations were private, the process was conducted by a team of about a dozen people within Amazon, including economists, human resources managers and executives who oversee real estate. Jeff Bezos, Amazon’s chief executive who was the mastermind behind turning the search into a public process and coined the term “HQ2,” was also involved, the people said. (Our recent look at Mr. Bezos’s growing public profile.)

Amazon said in its initial announcement that it needed a second headquarters because it would soon outgrow its hometown, Seattle. Mr. Bezos founded the company there in 1994, and it has since transformed Seattle, employing more than 40,000 in the city. That expansion has also contributed to the city’s soaring cost of living and traffic woes.

To lure applicants, Amazon showered local politicians with its own data about the impact the company has had on the Seattle economy and some of the immediate economic benefits related to its new home, including plans to spend $5 billion for construction of its second headquarters.

It asked candidates to include in their bids a variety of detailed information about the area, including potential building sites, crime and traffic stats and nearby recreational opportunities. And it asked cities and states to describe the tax incentives available to offset Amazon’s costs for building and operating its second headquarters.

The response prompted a wave of publicity stunts by cities that surprised even Amazon (We detailed some of the lengths that local leaders were going to in their quest for what one called “the Holy Grail.”)

The MaRS Discovery District innovation hub in Toronto, the one Canadian city that made the Amazon list.

Credit
Aaron Vincent Elkaim for The New York Times

A business group in Tucson trucked a giant cactus to Amazon in Seattle, and the mayor of Washington buttered up Amazon in a promotional video in which she called it the “most interesting company in the world.” An economic development group in Calgary, Alberta, took out an advertisement in The Seattle Times in which it offered to fight a bear for Amazon and spray-painted Seattle sidewalks with a humorous promise to change the city’s name to Calmazon or Amagary.

There were also more serious offers, including a commitment of up to $7 billion in tax incentives by New Jersey to bring Amazon to Newark. (We gave the bid by New Jersey’s largest city a close look.) Officials in Chicago offered Amazon tax credits that would allow it to keep about $1.32 billion in income taxes that employees would ordinarily pay to the state, according to a report by The Chicago Reader.

(In September, our colleagues at The Upshot, after assessing Amazon’s needs, predicted that Denver would ultimately emerge as the winner.)

The process has also attracted critics. Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a nonprofit organization that serves as an advocate for local businesses, said that local politicians were enhancing Amazon’s image just as the company’s market power was under growing scrutiny from groups like her own.

“As these cities woo and grovel, they are basically communicating this idea that we should want Amazon to be bigger and more powerful in our economy,” Ms. Mitchell said.

In an interview before Amazon announced its list of finalists, Ras Baraka, the mayor of Newark, said Amazon, long criticized in Seattle for its role in a booming economy that has displaced lower-income residents and minorities, had an opportunity to make a statement by selecting a less fortunate city for its new headquarters.

“There’s an opportunity to turn the page here and create a new narrative for the company,” he said.

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