April 02, 2018

Amazon wants to know: Can Philly bring the talent?

Online retailer diving into ACT and SAT scores of local high school students, report says

Business Amazon
10182017_AmazonCampusAerials Source/www.amazon.com

This aerial photo shows the campus of Amazon headquarters in Seattle. The online retailing giant is looking for a place to building its second headquarters, and Philadelphia hopes to get prime consideration.

Three months ago, Philadelphia officials got word that Amazon had named the city among 20 finalists for the company's second North American headquarters, dubbed HQ2.

Since then, Amazon officials reportedly have been making brief visits to each of those cities, searching for the right spot to build a $5 billion campus capable of housing 50,000 new employees.

Both Amazon and the 20 finalists have kept that process mostly close to the vest, offering very few details.

That holds true in Philly, too. Amazon officials reportedly visited Philly for a day and a half, but city officials have not offered much insight about the visit.

Nevertheless, the national media continues to search for any possible hints as Amazon continues down its highly-publicized, yet somewhat secretive selection process.

Here's a brief roundup of the latest reporting on Amazon's HQ2:

NO FANCY DINNERS, PLEASE

Many cities are forgoing fancy efforts to woo Amazon, ditching trips to swanky hotels and VIP dinners in favor of trendy neighborhood tours and data-driven pitches led by university officials and young professionals, according to The Wall Street Journal:

"Still, people familiar with the visits paint a picture of whirlwind trips with Amazon’s small economic-development team. Led by Holly Sullivan, it dives into data provided by the cities— such as the ACT and SAT scores of local high-school students — and asks a lot of probing questions regarding how much talent Amazon can attract."

Given that Amazon avoids many of the flashier perks associated with tech companies – like free meals – a person involved in a site visit told the newspaper that they were afraid an "over the top" pitch would "push them away."

Amazon seems to favor a more urban site that can handle its growth and an influx of well-paid employees, according to the newspaper.

That assertion runs counter to one by Business Insider, which foresees Amazon potentially opting for Northern Virginia based on the company's burgeoning presence there.

According to The Wall Street Journal, Amazon realizes it may not find a site that provides everything on its wish list:

"Another person said the company expects to have to compromise no matter which location it selects. Amazon has also placed particular emphasis on the tech talent pipeline: how much already exists locally, and how much Amazon can attract from around North America and the rest of the world."

'A RACE TO THE BOTTOM?'

Amazon officials reportedly have visited about half of the 20 finalists, which include Pittsburgh, New York City, Newark and three sites near Washington, D.C.

Most of them have kept quiet about the process and the financial incentives they may be offering. But Chicago hired actor William Shatner, who played Capt. Kirk on "Star Trek," to voice a video pitch to Amazon CEO Jeff Bezos, who is a bit of a Trekkie.

Still, USA Today reported that a group of economists and policymakers have launched a petition urging finalists to sign a pact rejecting egregious tax giveaways and direct monetary incentives.

Such incentives are potentially wasteful and counterproductive, the newspaper reports:

“It’s a race to the bottom,” said William Riggs, a planning strategist and professor at the University of San Francisco. “You don’t want to run your community into the red because you’ve subsidized” Amazon, he said.

Cities seem willing to sell their souls to attract Amazon. But it’s simply creating a long-term relationship fraught with peril.

“When the tax breaks expire, does that mean Amazon is going to just pick up and go to another city?” asked Riggs.

POLITICAL FACTORS AT PLAY

But Amazon also must consider political and cultural factors when making its decision, Joni Balter argued in a column for Bloomberg.

For instance, the Balter notes that No Gay No Way – a group funded by LGBT activists – has urged Amazon to reject sites located in states that do not provide comprehensive legal protections to LGBT people:

But on its face, the idea that self-styled progressive cities in red states – Atlanta or Austin or Raleigh – are at a disadvantage makes sense. No matter how hip the city may be, would Amazon risk setting up shop in a state that might, say, allow cake bakers to turn down gay weddings or ban transgender people from the bathroom of their choice?

The company's young workforce could transform the selected city, bringing with it the urbanist attitude seen in Seattle, according to Balter. That likely will include increased demand for public transit and a spike in housing costs.

Still, New York University marketing professor Scott Galloway told Balter that he views all the speculation as mostly meaningless.

“The cake is baked,” he said, and the winner is one of three D.C.-area sites. After all, D.C. is where Bezos recently acquired a huge house, where he and his family might want to spend time, where the political action is, where decisions will be made about the company’s future."

PHILLY'S PITCH

Amazon plans to build a second campus that will be equivalent to its current headquarters in Seattle.

In October, Philadelphia submitted a proposal that touted the city's talent pool, affordability and strategic location along the Northeast corridor. It suggested three potential host sites: Schuylkill Yards and UCity Square, both in University City, and the Navy Yard in South Philadelphia.

When city officials submitted the proposal, Mayor Jim Kenney heralded Philly as being in the "Goldilocks zone" for Amazon.

"Philadelphia has always been the city of the big shrug," Kenney said. "We're in the shadow of New York and Washington – but we're not. We have our own brand. We have our own identity. We have the ability to put our face out there and to win."

There have been few details about Amazon's visit to the City of Brotherly Love, except that reports indicate that no elected officials, including Kenney, met with representatives of the online shopping site.