Unfortunately, this isn’t Willy Wonka’s chocolate factory up for grabs, but Amazon’s proposed Headquarters 2. This new factory would cost about 5 billion to build and employ about 50k highly paid tech workers. Why is the new HQ for Amazon such a big deal? Cities throughout the country are tripping over themselves for this opportunity spending millions of dollars to pitch their location to Amazon.
Why is this so important? Whatever city lands the next Amazon headquarters will be a game changer for the area. Knowledge workers are the most coveted employees that have high earnings and as a result their earnings will filter through the entire area. These employees will buy housing, cars, spend money in restaurants, etc… Furthermore, with this many knowledge workers other companies are likely to follow Amazon’s lead creating a snowball effect.
Enrico Moretti, author of the new geography of jobs, highlighted:
“Attracting a scientist or software engineer to a city triggers a multiplier effect, increase employment and salaries for those who provide local services. For each new high-tech job in a city, five additional jobs are ultimately created out of the high tech sector.”
I’ve seen various reports where the top three cities in the running are (DC, Chicago, NY). My list is radically different. Let’s look at the three in the running. All three are very large cities with good transportation, education, etc… But all of them have a fatal flaw, high cost of living, and areas to build/expense to build.
Here are three to consider
Atlanta: Atlanta is my top pick Why Atlanta? It has a low cost of living, friendly business climate, educated workforce, and world class universities. It also has ample building areas suitable for Amazon’s needs.
Denver: Denver’s culture, feel, etc… is very similar to Amazon’s existing headquarters in Seattle. There is high quality of life. Unfortunately, Denver, like Seattle, is getting expensive. Unemployment is extremely low in the area so finding 50k new workers in Denver metro will be next to impossible.
Austin: Austin is home to Amazon’s recent acquisition, Whole Foods, and also has a young well educated population. One issue. Texas as a whole is considerably more conservative on social issues than Amazon.
Cities throughout the country will continue tripping over themselves until the “candy factory” is awarded. It will be interesting to see who Willy Wonka picks for Headquarters 2. Whomever the winner is will be a life altering experience for the area with thousands of new jobs and capital created.
Resources:
- https://www.cnbc.com/2017/09/07/here-are-the-cities-that-match-amazons-wish-list-for-its-second-headquarters.html
- http://www.businessinsider.com/amazon-headquarters-cities-in-a-bidding-war-2017-9
- https://www.bloomberg.com/news/articles/2017-10-12/amazon-second-hq-bid-ignites-sadistic-frenzy-across-north-america
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, Illinois, and Florida. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all they need is their simple one page application (no upfront fees or other games).