City Won’t Get Amazon Headquarters
Amazon eliminates Milwaukee, 207 other applicants bidding for its second headquarters.
Mobile Amazon billboard. Photo by Jeramey Jannene.
Amazon has eliminated Milwaukee and 207 other applicants from the bidding for its second headquarters, leaving only 20 cities in the running. The Seattle-based company issued a request for proposals in late 2017 asking for bids for a $5 billion corporate campus that could some day employ up to 50,000 people and cities and states rushed to offer massive incentive packages.
Milwaukee submitted a joint bid with neighboring communities through the regional Milwaukee 7 consortium. Multiple undisclosed sites were suggested in the bid.
Milwaukee’s elimination from the bidding war isn’t a surprise. The state recently secured a deal with electronics manufacturer Foxconn that could cost as much as $4.5 billion in state and local incentives, severely straining the ability of Wisconsin to offer a large incentive package. The city’s direct financing options are fairly limited beyond creating a tax-incremental financing district.
Amazon’s RFP indicated they were looking for a number of things Milwaukee’s bid presumably lacked. Chief among them was access to mass transit with the RFP stating “direct access to rail, train, subway/metro, bus routes.” The high-frequency mass transit access that Amazon has at its urban Seattle campus can only be found in downtown Milwaukee where site options are more limited.
This dovetails with the issue of international airport access. Yes, General Mitchell International Airport technically fits the bill, but it offers substantially fewer international flights than airports in larger cities. Amazon cites international airport access alongside transit as one of four site requirements.
Interestingly, a number of cities did make the list that would seem to have similar issues to Milwaukee: Columbus, Pittsburgh and Indianapolis. Details on the incentive packages offered by those cities are scant, but Columbus would offer a $400 million income tax refund, $75 million site reimbursement and 100 percent property tax abatement. Both the refund and abatement are moves Milwaukee itself could not offer. Columbus also promised to used Amazon’s income tax dollars to fund “transit solutions.”
Columbus and Indianapolis were two of the top 25 cities according to a New York Times analysis in September based on job growth and their existing labor pool. The New York Times projection closely mirrors Amazon’s list of finalists.
The other city from the Midwest in the final 20 is far more predictable: Chicago, which is offering over $2 billion in incentives, in addition to other tax breaks.
Similar to Milwaukee, many of the cities are not publicly disclosing their bid package. Newark, NJ, a finalist, did disclose that their package includes up to $7 billion in incentives.
The site does not mention proximity to an Amazon distribution center as a preference. Amazon currently has a 1.5 million-square-foot logistics facility along Interstate 94 in Kenosha.
What’s Next
Milwaukee might have dodged a bullet by missing out on Amazon. The company’s claim of 50,000 jobs seems like a stretch. The company reports they currently have approximately 40,000 employees spread over 33 buildings (8.1 million square feet) in their downtown Seattle campus. They project the 15-to-17-year HQ2 project would maintain that campus and add an additional campus with 50,000 employees. They initially project to build only a 500,000 square-foot building, roughly half the size of the new Northwestern Mutual Tower and Commons.
One of the finalists could still have positive effects on Milwaukee without the hefty price tag. Chicago is pitching a number of sites near The Loop and Union Station, which would allow Milwaukee residents to work at Amazon in Chicago, live in Milwaukee and commute via Amtrak’s Hiawatha Service. The reverse is expected to happen for Foxconn, with Illinois residents commuting to jobs in Racine County subsidized by Wisconsin taxpayers.
Since the bidding began, Amazon founder and CEO Jeff Bezos has claimed the mantle as the world’s richest person, with a net worth of more than $100 billion. He owns 78.9 million shares of Amazon stock, which opened today’s trading session at $1,293.58. Three months ago the stock was trading at just under $1,000 per-share, meaning Bezos has added $23 billion to his net worth since October.
The company has a market cap of $623 billion.
Finalists
- Atlanta
- Austin, Tex.
- Boston
- Chicago
- Columbus, Ohio
- Dallas
- Denver
- Indianapolis
- Los Angeles
- Miami
- Montgomery County, Md.
- Nashville
- Newark
- New York
- Northern Virginia
- Philadelphia
- Pittsburgh
- Raleigh, N.C.
- Toronto, Canada
- Washington, D.C.
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I’m beyond OK with this. The Amazon thing has been such a media ploy to drum up whatever corporate welfare they can get. I’d rather see Milwaukee build its own Amazons of different industries and find ways to support and build local entrepreneurs while creating a city they want to live and grow.
Milwaukee’s best case has always been that they put it in Chicago by union station, and positioning ourselves a laid back alternative at 60% off. If it’s by Union Station, commute times from Milwaukee on the Hiwatha will be better than in from half the suburbs (especially from our south side from the MKE station) . The Hiwatha is a smooth, speedy ride between the cities and fairly cheap – only 19 bucks when buying the 10 pack. With today’s flex work arrangements, the ability to stay connected while on the train, etc, we can sell ourselves as something like, “same lake views, better beer lists.” I hope they win it.
Of the few articles I’ve read on the subject, this article has been the most informative thus far. Notable inclusion is the complete list of twenty cities remaining, and a link to source.
Apple is the next big target now that corporations are paying fairer taxes. Apple Will pay $38 billion in taxes and invest $200 billion in America. Democrats had no part in this great news.
I had no illusion that Milwaukee would be in the mix. That said, based on what I read about the proposal, it appears that Brewtown put its best, regional foot forward in touting the advantages of the region–from Chicago to Madison–and it’s enviable location in the middle.
The Crain’s/Business Journals article todat points out that this list of 20 was carefully crafted, likely including cities like Columbus and Nashville for PR purposes more than anything. The odds-on bet is for the DC area. I think Chicago still has a shot, with Toronto also a possibility, among the other cities more closely aligned to Amazon’s stated needs and wants..
One piece I read weeks ago rightly suggests that the the process of responding to Amazon’s RFP, alone, has likely been an exceedingly beneficial process for most cities. Honest reflection on current circumstances usually does, and can lead to clearer thinking, more impactful action, and to brighter futures.
(Also, this could well be a blessing in disguise.)
Several of the cities on the list (Raleigh, Indianapolis, Columbus, others?) have no light rail, so obviously this was not a critical factor in their decision. Maybe they have plans underway. The business climates and pool of educated tech workers has far more to do with it, and is exactly why cities like Milwaukee are not on their radar. When the governor cuts university spending and throws billions at an assembly factory, then your not exactly creating the right talent pool to attract high tech. Oh, and there’s the gummi bear factory. We’ve got that going for us!
@Troll, it’s too bad the economy is imploded every ten years or so…republican’s have a big part in that reoccuring great news…
I think Chicago wins. If they do, then Milwaukee wins. We’re all the Lake Michigan megalopolis. Tying closer together all the time. Milwaukee will get a piece.
I think Apple comes here too.
For those who subscribe to the Milwaukee Business Journal, there’s an interesting, clear-headed op-ed about this by Blair WIlliams, president of WiRED Properties. In addition to agreeing with some that this may be a blessing in disguise and that Milwaukee can still benefit plenty if Chicago gets HQ2, he has four observations:
Boston; Austin, Texas; Nashville, Tenn.; Raleigh, N.C.; Washington, D.C., and Montgomery County, Md.; Indianapolis; and Columbus are all either state capitals or immediately proximate to the federal government. Government seems to matter.
New York City, Newark, Los Angeles, Chicago, Dallas/Fort Worth, Philadelphia, Washington, D.C., Miami, Atlanta, and Boston are all in the top 10 largest MSAs in the country. If Toronto was in the United States, it would be the seventh largest MSA. Size seems to matter.
Raleigh, Pittsburgh, Nashville, Columbus, Austin, Dallas, and Indianapolis all hit the charts with grades of A- or better as top millennial cities. Denver was close at a “B,” while Milwaukee is a C+. Millennial attractiveness seems to matter.
Los Angeles, Denver, Dallas, Austin, Newark, Chicago, Toronto, Atlanta, Raleigh, Boston, Dallas, Austin, New York City, and Washington, D.C. all show up in the top 20 cities for tech workers. Attractiveness to tech workers seems to matter.
Well duh. Not that I wouldn’t have celebrated it. My money is on Philadelphia – you heard it here first!
MidnightSon, 12 of the 20 finalists are capital areas. Besides the 8 you listed, Denver and Atlanta are also state capitals, Toronto is the capital of Ontario, and “Northern Virginia” is right next to DC.
Also, 19 of the 20 have (or are planning) rail transit. Indianapolis is the only exception, because Indiana forbids light rail (a state law enacted while Mike Pence was governor). But even Indianapolis is expanding their transit thanks to a new 0.25% sales tax dedicated for transit, voted in overwhelmingly (by a 16% margin) in November 2016. That sales tax money will fund several BRT lines and expand overall Indianapolis bus service by 70%.
@TransitRider
Great observations in addition to what Blair Williams had come up with. I suspect that the transit factors play into Millennial and tech worker attractiveness.
Meanwhile, Milwaukee was just ranked #10 among the top “Hygge” (Danish for charm, coziness) cities in the US. Per the Journal Sentinel, “Milwaukee received high points for playing card games, cooking and knitting and needlework.”
Have a brat, der, Stosh!
I doubt that rail transit (or air travel, for that matter) was a major consideration in the selection of these 20 cities/metros/regions. Columbus, Indianapolis, and Raleigh have no rail transit and Austin and Nashville only have single commuter rail lines of very limited utility. (Yes, Nashville and Raleigh have proposals at some stage of planning, but nothing at the construction stage.) I suspect that if rail transit is an important criterion in this selection process that it will be used (among many other criteria) to shrink the 20 down to a final few. Austin is the only one of the little-to-no-rail-transit cities that I suspect *may* make it to a final few – primarily because of its tech industry and pre-existing Amazon connections.
I highly doubt Chicago will get this Amazon location. I do however believe that Nashville is a much stronger contender because of no state income taxes, a robust transit plan in the making (to some estimates, almost 6 billion dollars that will include a subway system and streetcars), an already very busy bus system city-wide, an easy business climate, a very mild weather climate, and of course we are centrally located in the US with a very popular “it” status happening right now. Also, Nashville just does not have the ugly political issues tainting the city and state like that of Milwaukee, and Wisconsin. Current statistics statewide here are showing that nearly 100 people are moving to the Nashville region every day. This brings in a more robust workforce to the city of Nashville that Milwaukee (and Chicago) just cannot compete with…
A 2010 daily beast analysis revealed that Tennessee is the most corrupt state in the nation. A 2012 Harvard study ranked Nashville as one of the most corrupt capitols in the nation. But sure you have no problems at all in the utopia that is Nashville, Tennessee. Right. And sorry but Nashville is not landing Amazon’s new headquarters. Will not happen. Thanks for dropping by to cheerlead though. Must make you feel better.
PMD, Your rhetoric suggests a cynical debate fueled by an inferior attitude – those good ‘Ole Milwaukee values! I am not here for that. If that is your intent, argue elsewhere please. And I certainly hope you aren’t teaching Milwaukee’s youth with that attitude.
I was simply giving an opinion (with personal life perspectives in both Cities) like everyone else on this blog. Furthermore, I can site at least 6 sources that would say the same about Milwaukee (and Wisconsin) – if not much more worse, like say zip code 53206.
But I am not here for that, and this story was not about how corrupt governments are in our State Capitals.
I would be interested in hearing your personal perspective on why you believe Nashville would not get this Amazon location? I didn’t say Nashville WOULD get this Amazon location, I was simply pointing out why I believe Nashville is a better fit at the moment.
I find it odd that people who don’t live here still comment on this site just so they can bash Milwaukee. What’s the point of that exactly? I am well aware of the city’s flaws but I love it anyway, so pardon me for getting defensive when someone like you drops by just to slam it. If that’s all you care to do, might I suggest you do it elsewhere as it contributes nothing productive. And if you are going to say something completely untrue, that there are no political problems in a city and state full of political corruption, don’t act surprised when someone calls you out. It makes you look foolish.
Nashville is a nice city. Good music scene. But Amazon is going with a city on the East Coast.
PMD, as I’ve mentioned before on this blog…I was born and raised on Milwaukee’s South Side (1st generation Polish), and I still occupy my childhood home in the Summers while I am not teaching in Nashville. I just couldn’t sell that house after my parents passed away.
And actually, you likely do not “find it odd people…can bash Milwaukee”. You just sound like someone who wants to argue on points about our hometown that are inferior to the way our hometown actually is right now.
And where I was I “bashing” Milwaukee in my statement(s)? And where in my text did I say Nashville has no political problems? Again, it’s that inferior, hostile, cynical attitude that prevents you from actually reading what I typed.
Get beyond yourself and provide a way to back up your opinions (which you also failed to do in your previous response), and have a decent conversation. I would also encourage you to re-read my original post because it in no way bashes my hometown Milwaukee.
I REALLY hope your behavior like this doesn’t trickle down to your expertise in the classroom as a Teacher.
Now that we’re finished with your foolish banter, care to actually provide an educated response on why you think Nashville won’t get the Amazon location (as opposed to Milwaukee) – even though it is on the list of contenders?
it will be Chicago, we have it all here, we have great schools, an outstanding mass transit system, great shopping, everything that a person could ever want, we have it here in Chicago
it was silly for Milwaukee to even try