This fall, Amazon announced its search for a second headquarters. The company, whose first headquarters has been based in Seattle ever since world’s richest man, CEO and founder Jeff Bezos, started the company in his garage. Once the project had been announced, over 230 cities and regions gathered and presented bids to Amazon in hopes of securing the site. Amazon promised over 50,000 jobs and $5 billion in construction spending would stem from the project. The impact cities would enjoy for hosting its “HQ2,” what many have grown fond of calling the project, is the reason cities are clamoring over the project; this opportunity is rare. However, this bid might come with hidden burdens as cities attempt to accommodate one of the fastest growing companies on the planet.
Minnesota’s effort to draw in the retail giant recently fell short as Amazon announced a short list of 20 cities still in the running. On that list, only three were in the Midwest, while over half were East Coast cities. It is clear Amazon values the prospect of having a headquarters on both coasts, as Los Angeles was the only pacific urban area to make the top 20. Before narrowing down the competition, Minneapolis was pegged as a long shot despite having the best Fortune 500 companies per capita ratio and a comparatively good cost of living.
The proposal set forth by the state of Minnesota has been kept tightly under wraps. However, we do know what other cities and regions have offered, as well as some of Bezos's and Amazon’s expectations. Other proposal sites, such as Chicago, Philadelphia and Baltimore, offered incentives worth at least $1 billion, and Newark, New Jersey put forth $7 billion incentives in order to further persuade the company to drop anchor in their city. Minnesota’s proposal could not match those incentives. Gov. Mark Dayton called the offer “modest” as the $3 million to $5 million reported incentives offer was dwarfed by the other enormous offers.
Regardless, Amazon eliminating Minneapolis and surrounding areas from contention for the HQ2 may come with hidden blessings. The benefits of hosting the new headquarters are plentiful and undeniable. Thousands of high paying jobs and an initial $5 billion investment is hard to refuse. Yet having to provide incentives as high as $7 billion in order to win the bid is a legislative and political burden; one the state might not have been able to match. Additionally, housing has been a point of contention in the Twin Cities because of rapid growth. Affordable housing and gentrification were a hot button issue in the municipal elections during the fall, and the problems facing the city in this regard would rapidly grow if Amazon touched down in Minnesota.
The city would almost certainly struggle with the new growth, just as Seattle has with Amazon's first headquarters. A plan to draw large companies to the state and the Twin Cities should come with a plan to provide more housing of all classifications. Introducing such a corporate shock can either propel a city forward or create a whole new set of problems. Evidently, Minnesota will not enjoy any of the benefits or challenges created by courting and hosting one of the largest and fastest growing companies this time around.