Amazon And Its Real Estate Effect

Is Amazon so big that it can change the real estate game in a way that might suit Amazon?

Consider that the eCommerce giant has had some pull with major cities — the ones who didn’t make the cut for being a finalist in the competition on offer by the company as it seeks a site for its second headquarters.

The Wall Street Journal reported on Wednesday (May 2) that Amazon told the also-ran cities, via conference call, that a “key issue” was toed to regional transportation — or, more specifically, the lack of a network facilitating that transportation.

The WSJ noted the company made about 200 phone calls, and the message, or messages, were taken to heart.

There are 20 finalists remaining from the 238 cities that threw their hat in the ring to be considered for the second Amazon headquarters, which may cost as much as $5 billion and create 50,000 new jobs. But the company had a few stipulations, among them a metropolitan landscape with a population of at least 1 million, a pool of tech professionals from which to draw upon and airport access, with flights to Seattle.

The financial publication illustrated that the efforts made by individual cities varied.  Among those initiatives: Cincinnati, Ohio, and Sacramento, California, are changing workforce development programs to develop talent in the technology realm.

Beyond that, Orlando, Florida, is mulling a community fund, one that the WSJ said will invest in tech companies that are locally based. Detroit seemingly has made a direct overture to transportation issues as cited by Amazon, with that city having introduced a ballot initiative that would spawn a transportation network geared toward connecting counties and the city itself.

Some calls were relatively light on details. The WSJ stated Sacramento’s postmortem call was somewhat complimentary. But Barry Broome, who serves as president and CEO of the Greater Sacramento Economic Council said his city is “now restructuring all of our workforce programs in the area,” with an eye on tech training.

Said Gerry Anderson, who serves as chief executive of DTE Energy, supported the aforementioned Detroit transportation plan: “Amazon was a wake-up call. What becomes undeniable for people is that here’s an outsider that would have been a very attractive investor who looked at our transit system and did not like what they saw.”

The WSJ noted that Amazon’s “highly visible” competition for the company’s next HQ is making cities rethink job creation, and, as noted, transport hubs.

But the bake-off, such as it is, has its critics. As noted by Professor Richard Florida of the University of Toronto, “I don’t think communities should be rushing to please Amazon.  They should be looking to build their own regional economies … not trying to let any large company tell them what to do.”