Amazon HQ2 Skirmishes

 

Let me start by saying that Jeff Bezos has not yet responded to my offer to help with site selection for his new headquarters. My comments are not based on inside information, but reflect only my own observations. On the other hand, they are not influenced by a personal or professional stake in the outcome.

The war of words that broke out this week between the Baltimore Sun and Prince George’s County Executive Rushern Baker, on the other hand, demonstrated yet again that where you stand depends on where you sit. The last daily paper standing in Baltimore accused Baker of stabbing the City in the back by promoting his own proposal for the new Amazon headquarters rather than supporting Baltimore’s Port Covington bid.

The Sun editorial can best be described as snarky and misguided. If the City fails to land the Amazon project, it won’t be because of a competing bid from Prince George’s County. Given that this is a national competition, both these proposals have to be seen as long-shots at best– probably true of most of the bids that will be submitted.

In fact, the Sun’s attack on Baker could well end up backfiring and hurting the Baltimore bid.  It comes across as petty and parochial, hardly the kind of global, inclusive environment that Amazon prides itself on and is undoubtedly seeking.

Rather than whining about Baker’s effort, City advocates should be focused on putting together the best possible package they can. At the end of the day, there will be negotiations between Amazon and, in all likelihood, several bidders. Either Baltimore City or Prince George’s County would, in such an eventuality, be strengthened by being able to point to other assets within Maryland that would benefit an Amazon facility located within the State.

Both contestants have significant obstacles to overcome.  While Baltimore is close to an international airport, its mass transit system is far from outstanding and has been the subject of ongoing disputes between city residents and the State. However, the success of Under Armor, the presence of numerous institutions of higher education and available land in Port Covington are all assets.

On the other hand, its national reputation has taken a real hit in the last couple of years with continuing stories about crime, drugs, poverty and police misconduct.  Unless Amazon views the headquarters decision as an opportunity to “rescue” Baltimore, the odds are very long indeed.

One curiosity of the Port Covington proposal is that it has created an odd mix of bedfellows.  Governor Larry Hogan, Comptroller Peter Franchot and Baltimore County Executive Kevin Kamenetz, with the first two often in loud public disputes with the third, have all come out in favor of the location.  Still, Amazon might be concerned about Hogan’s general antipathy to the City and his tendency to use it as a whipping boy for political gain.  Would Bezos make a calculation on the Governor’s chances of being reelected?

With respect to any Prince George’s site, the threshold question is whether Amazon would be willing to settle in a suburban location.  While Prince George’s is certainly an urbanized county, that’s not the same as being a city. Access to two major airports, DC metro and, eventually, the Purple Line, are all positive features.  Having a close relationship with the University of Maryland at College Park is also a plus, particularly if that campus ended up receiving the $1 billion in added support that State Senator and gubernatorial candidate Rich Madaleno has proposed.

Still, the competition is likely to be fierce and neither Maryland proposal bears much resemblance to Amazon’s Seattle environment.  Does Bezos want a totally different sort of second headquarters or does he want to try to replicate what he already has?

The list of prospective bidders is a long one.  Denver has been seen by some analysts as a leading contender, but that’s as much guesswork as anything I’ve written.  Chicago, Detroit, Boston, New York, Atlanta?

How about Philadelphia, the other location I know a lot about?  At this point, the City is considering three different possible sites, and Wilmington is also in the mix.  Unlike the Maryland skirmish, this one has not yet involved public name-calling, but it’s still early.

One of the Philadelphia locations seems to me to offer a particularly intriguing set of characteristics. The site being discussed is adjacent to the 30th Street train station and to the campuses of both the University of Pennsylvania and Drexel University.  It is 20 minutes from the airport and is served by a subway line, several trolley routes and buses.

There’s no question that this location is urban.  Philadelphia has a vibrant and thriving Center City with lots of cultural attractions, but it also has many of the persistent problems of older metropolitan areas.  The most troubling is the highest rate of residents living in poverty of any major U.S. city.

Does Amazon have an algorithm for factoring in all the calculations needed to select the location for its new headquarters?  It certainly does for making suggestions on what books I should buy next.  Or will this be a highly personal decision made by the Bezos?