Who Will Be Amazon’s Next Cinderella?
The main FedEx office in Tucson, Arizona has an unusual problem these days.
How do you ship a 21-foot-high Saguaro cactus to Seattle, Washington?
Sun Corridor, Inc., the regional economic development body for the area, has ordered the shipment of the prickly state flower to entice Amazon (AMZN) to build its new international headquarter in the Grand Canyon State.
Hundreds of other state, local, and municipal authorities stand in front of them.
Which leads to the biggest US business question of the year. Who will Amazon choose?
Don’t get confused here. Amazon isn’t moving anywhere.
My friends in senior management there love their Seattle life style and the great outdoor life, even though it seems to rain 365 days a year.
Oh, and a volcano explodes once in a while too.
REI is also headquartered there for a reason.
Perhaps that is why no less than 75 high-rises are under construction in Seattle. It has become crane city.
No, the new Amazon headquarters is to accommodate FUTURE growth of the company from here.
The existing Seattle HQ is spread among 17 different buildings, and employees are catching colds running from one building to another. Essentially, Amazon has outgrown the home of the Seahawks.
Any town would die for Amazon’s favor.
The winner would get 50,000 clean, high paying white-collar jobs.
It would instantly become one of the world’s leading technology hubs.
An Amazon presence would create an additional 100,000 ancillary and support jobs, from the local dry cleaner to the nearest car dealer.
Commerce at existing businesses would soar.
Tax revenues would rocket.
Any local politicians in office would claim the credit and get re-elected for life.
There are in fact only a limited number of cities who could handle an expansion of Amazon’s size.
Having worked with Jeff Bezos at Morgan Stanley yonks ago, I have some insight into his thinking.
As the former head of fixed income quantitative research there, Jeff is the ultimate numbers guy.
So any location offering cheap real estate and land prices and minimal regulation already has a huge head start in the sweepstakes.
You would also need to be close to a major international airport and broadband hub.
This narrows the field to just a handful of possibilities.
I happen to have been a party to the last big corporate relocation decision, Tesla’s (TSLA) choice of Sparks, Nevada for a $6 billion investment for its Gigafactory.
The decision was so important that my friend, Texas governor Rick Perry, made three trips to Fremont, California to snare the deal.
Since Sparks was such an outlier, they couldn’t even get an appointment to pitch the company. So, they showed up for a cold call and waited, hoping for the best.
They finally got some sympathy because they had driven through a ferocious High Sierra winter storm to get there. They were given just 15 minutes.
After waxing poetic about the city’s wonderful weather, ski slopes, and lack of a state income tax, the Sparks team were asked only one question: “How long does it take to get a building permit?”
The team leader pulled out a pad a blank building permits as asked, “How many do you want?”
Depressed Stockton, California was the front runner at the time, but even the California governor Jerry Brown couldn’t promise a building permit within the year.
Now THAT is deregulation!
My personal pick for the new Amazon site is Detroit, Michigan.
It meets all the main requirements. Amazon could ask for all the tax holidays it wants and probably get them.
The city has hundreds of blocks of derelict building that could be torn for new office and residential space.
Heaven knows, the city could certainly use the business.
As for the ill-fated Saguaro, I’m afraid its future is not bright.
Plants that flourish in a 12-inch annual rainfall tend to rot when transplanted to a 38 inch one.
I learned this one the hard way.
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