Columbus can learn from losing out on Amazon H2Q


By Mark Williams - The Columbus Dispatch (TNS)



COLUMBUS — By all accounts, Amazon seemed sincere when it opened up competition for its massive second headquarters in September 2017 to every city in North America with a population of at least 1 million people.

But when the internet giant settled on the two most powerful cities in the United State — New York and a Washington, D.C., suburb in northern Virginia — to share the $5 billion prize and the 50,000 jobs that come with it, it didn’t take long for Monday-morning quarterbacks to question whether Columbus and the 17 other finalists really had a shot.

For the most part, site selection experts say yes, but that the other finalists just couldn’t measure up to New York and Washington.

“They were open. They wanted creative proposals,” Tom Stringer, managing director of site selection for BDO in New York, said of the Seattle-based company. “If you can deliver to us, tell us, show us. We’re willing to listen.”

While Stringer likes Columbus, he said the city just doesn’t have the capability of handling the enormous influx of workers expected from the project. That was a factor in Amazon’s decision to split the prize between two big cities, recognizing that it would be tough for any region to handle 25,000 jobs or more from a single company.

Also hurting Columbus was the lack of immediate access to federal regulators in Washington.

“To be very honest, you couldn’t handle the volume. Either (the New York or Washington project) would have been a profound challenge for you,” he said.

The same could be said for the other finalists, he said.

“It was nothing unique in Columbus that caused you to lose,” Stringer said.

John Boyd, principal of the Boyd Co., which is based in Princeton, New Jersey, and provides site-selection services to some of the nation’s biggest companies, agreed that Amazon was open to the finalists.

“All these 20 cities had a credible case to make to Amazon. I think they looked at all 20 cities seriously,” he said.

Both winning cities have big labor pools, but even for them it would have been hard to absorb 50,000 new jobs, given how tight labor markets already are, he said.

Kenny McDonald, chief economic officer for Columbus 2020, the region’s economic-development arm that led the region’s bid for the project, disagreed over the metro area’s ability to handle Amazon’s project.

“Can we do this or not? We answered that a year ago, and every day we get more confident,” he said.

McDonald said local economic leaders are in the process of doing their own analysis about the region’s bid and figuring out what it can do better when it comes to things such as workforce, infrastructure and collaboration so that it won’t just compete for the next big project, but win. They also plan to meet with Amazon to learn more.

“What do we have to do better? What do we have to look like? … That’s a great conversation to have,” he said.

While Amazon picked Washington and New York, the process likely gave the company insight it didn’t have about Columbus and “certainly opened their eyes to the possibilities, including Columbus,” McDonald said.

Shortly before Amazon announced New York and Washington as the winners, Jeff Bezos, Amazon’s founder and CEO, said at a conference that his “intuition” would be a factor in deciding which cities would win the coveted prize.

“Translation: Put the thing where I want,” said K.C. Conway, chief economist for the commercial real-estate group CCIM Institute and the director of research at the Alabama Center for Real Estate at the University of Alabama, who has tracked the project closely. “They weren’t true to (the initial proposal). They put municipalities through a lot. They generated a ton of data that will benefit them.”

At one point, Conway said he honestly believed that Amazon was out to do a genuine nationwide search that was about workforce.

Instead, it picked two cities where housing is expensive and the labor markets are tight, both of which went against Amazon’s initial proposal, he said. New York struggles to produce enough skilled workers now, he said.

“Amazon is jumping from the frying pan into the fire in terms of housing affordability and lack of skilled workforce. If they thought housing costs and skilled workforce were a problem in Seattle, there will be a crisis in New York,” he said.

Conway said he wouldn’t be surprised to see some companies move operations from New York out of fear that Amazon will poach their workforce.

He believes the losers actually could turn out to the be the winners over the long term. Those cities now have captured the attention of site-selection consultants, and other projects will be headed their way, Conway said.

“When was the last time Columbus or a Pittsburgh got that kind of stature on site selection?” he asked.

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By Mark Williams

The Columbus Dispatch (TNS)

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