Gilbert: Detroit to make 'strong pitch' to Amazon
Amazon.com Inc. is looking for a North American city to build a massive second headquarters and Detroit’s billionaire investor says he’s primed to convince Amazon that the city should be the company’s next headquarters.
Dubbed “HQ2,” the site will probably cost more than $5 billion, take up to two decades to develop and employ 50,000 people. Whatever city gets chosen will be transformed by Amazon, which has already changed the character of its native Seattle, setting in motion a building boom and rising rents.
“Seattle doesn’t have enough capacity for their growth,” says Lisa Picard, chief executive officer of Equity Office,one of the biggest office landlords in the U.S. “That’s the biggest issue.” HQ2 will be a major economic boon for the city that successfully woos Amazon, and mayors, including Chicago’s Rahm Emanuel and Jim Strickland of Memphis, Tennessee, are already raising their hands.
“I would suspect they go for places with capacity and reasonable costs of living and strong lifestyle,” Picard says. “That’s a game-changer for places that are needing a new industry.”
That’s where Gilbert, founder and chairman of Quicken Loans and Bedrock, the real estate arm of his empire, comes in.
"We have already put together a task force of internal and external people here in Detroit to fully explore the opportunity of Amazon’s HQ2,” Gilbert said in a statement Thursday. “We are very excited and we believe that Detroit will make an extremely strong pitch to Amazon."
Here are some of the options:
Detroit (wild card)
Pros: Low rent, potential for bigger tax breaks for a city and state looking for diversification from manufacturing. Trying to turn around a city is the kind of statement Jeff Bezos might want to make.
Cons: May be a harder sell to move top engineers and other Amazon employees there. Smaller size, limited tech scene.
Pros: Major flight hub and home of UPS, giving Amazon’s ever-growing shipping division a solid pool of expertise and a centralized North American location. Dynamic metropolitan area of nearly 6 million, which already hosts the headquarters of major corporations like Coca Cola, Delta and Home Depot.
Cons: Amazon prides itself on its urban Seattle locations being walkable and bikeable. A more suburban city like Atlanta may contradict that spirit.
Pros: Mayor Emanuel has already had several conversations with Amazon about putting the new HQ in America’s Second City, according to the Chicago Sun-Times. Heavy concentration of operations, marketing, finance and sales employees to poach from other industries.
Cons: One of the few major U.S. cities without a significant tech presence.
Pros: Already home to 800 Amazon employees and features a large pool of high-quality computer science and engineering graduates. Potentially easier to hire people from abroad because of more open tone on immigration from the government. Also offers the benefit of government-funded health care.
Cons: Hiring so many people outside the U.S. might make Amazon an even bigger target for President Donald Trump.
Pros: Home to top AI and robotics university Carnegie Mellon. Has industrial manufacturing background useful for Amazon’s warehousing operations. Close to major distribution hubs.
Cons: Far from other major cities and tech hubs.
Pros: Locating in New York would give Amazon access to the world’s top pool of finance and media talent, proximity to fashion as well as a growing tech scene. Creative center would draw young employees looking for a locale that’s even hipper than Seattle.
Cons: Rent prices are already high, one reason locals in Seattle are resisting the company’s expansion there. Limited space for new construction.
Pros: Close to the distribution and business hub of Dallas. Home to a hip, young population that could be a draw for potential employees. No state income tax for employees. Home to Whole Foods, which Amazon recently acquired.
Cons: Smaller than other U.S. options. Corporate “margin tax” penalizes unprofitable companies.
Pros: Large pool of university talent. Lower wages and rents than in more established tech hubs. State has been focused on attracting new tech companies to the area.
Cons: Lack of a nearby major international airport, smaller size.
Pros: Already home to Amazon’s quickly-growing video business. West coast time zone could increase synergies with the Seattle office.
Cons: Urban sprawl, traffic and high home prices could make it difficult to hire the number of people Amazon requires.
Detroit News staff contributed to this report.