Why a Regional Bid May Land HQ2

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Proposals to capture one of the most coveted economic development deals in history — Amazon’s second headquarters, or HQ2 — are due. While some cities (here and here) have not been swayed to join the hunt, there are no doubt hundreds of submissions, and nearly the same amount of speculation about which one of these will be successful.

Analysts have combed through Amazon’s requirements to predict which city will win out. Strictly based on things like site specifications, available talent and operating costs, the list of places starts to shrink in a rational way.

However, most bids may be thrown out even before they are opened.  Consider this line from the first page of Amazon’s request:

 “We encourage states, provinces and metro areas to coordinate with relevant jurisdictions to submit one (1) RFP for your MSA.”

Why is this “coordination” important? Well, Amazon knows that it is highly unlikely that one jurisdiction will have all of the assets needed to support 50,000 new jobs. Take the Washington, D.C. region for example. If Amazon landed in the city, without a doubt, employees would be living throughout the region to find affordable housing. To get all of these workers to HQ2, the Metro transit system would require substantial additional improvements, and traffic congestion would have to be dealt with in a meaningful way.

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These are enormous challenges that have plagued the D.C. region — as well as many others — for years. However, if cities and states can’t come together to claim the huge carrot that is 50,000 new jobs, Amazon may be less likely to trust that they could get the job done when it comes time to resolving large scale regional issues that will directly affect their bottom-line.

This is not to say that there aren’t good reasons why collaboration doesn’t happen more naturally, especially in the D.C. metro. Realistically, this unique region with two states, a city-state, the Federal government and several local jurisdictions would need longer than six weeks to map out a meaningful strategy.

That aside, Amazon may be using the RFP process as a test case for the extent to which places have a functioning governance system and supportive business environment. This may jump bids like that of Metro Detroit-Windsor, Ontario to the short list. The effort, with Dan Gilbert, Chairman of Quicken Loans Inc. at the helm, takes collaboration to the next level and brings together a bi-national team of nearly sixty city and county executives, university presidents, state and federal policymakers, economic development groups and business leaders.

No matter what Amazon decides, the fight for HQ2 has been a defining moment for economic development. And not because it may fortify the perceived necessity of at least some tax incentives, or because it may fuel the trend of asset-rich places gaining success over those that need it more. In the end, the most significant way that Amazon may transform economic development is by putting a stake in the ground for regional collaboration.

About the author: Christiana K. McFarland is NLC’s research director. Follow Christy on Twitter at @ckmcfarland.

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