It’s a huge prize that Amazon is dangling – a second North American headquarters that comes with 50,000 six-figure jobs and lots of prestige.
So you can’t blame Sacramento region officials for putting on their best face to launch their bid for HQ2 – part sales pitch and part pep rally in front of Golden 1 Center on Wednesday morning.
Yet based on Amazon’s criteria, Sacramento faces long odds to snag Amazon. The Kings may have a better chance of making the NBA playoffs.
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However, half-court heaves do go in sometimes, and local officials pray this is one of them.
The bid submitted Wednesday includes an 80-page proposal that outlines 12 potential sites across the region, including the downtown railyard, Sleep Train Arena in Natomas and the Bridge District in West Sacramento. It highlights the tech workforce, quality of life and 15 daily nonstop flights to Seattle, Amazon’s home. And it includes 100 pages of analysis that tries to capitalize on Sacramento’s proximity to Silicon Valley and the Bay Area.
They’re all good reasons for a family to move here, but are they enough to lure one of the world’s biggest corporations?
Kings principal owner Vivek Ranadive and Mayor Darrell Steinberg argued that Sacramento and Amazon are a perfect fit. “No matter how impossible the odds may seem, we make it happen,” Ranadive told the crowd of business leaders and city officials before ending the event by leading an “Amazon rocks!” cheer.
Sacramento may have one ace to play.
When Steinberg was state Senate leader in 2011, there was a big fight over California’s attempts to force Amazon and other internet retailers to collect sales taxes. Amazon threatened a referendum to overturn the law. Steinberg helped broker a deal that delayed the tax and led to Amazon warehouses being built in California, including one near Sacramento International Airport. Wednesday, he reminded Amazon that it is saving boatloads of cash.
Does Amazon owe him? I asked. “Yes. We’re using it,” Steinberg replied.
Even that likely won’t be enough to outweigh what some other suitors are apparently willing to spend on incentives, though Sacramento should avoid a bidding war. Most notably, New Jersey Gov. Chris Christie has gone all in, backing as much as $7 billion in tax breaks to get Amazon to pick beleaguered Newark.
To boost the bids of California cities, Gov. Jerry Brown says the state is willing to offer as much as $200 million in tax credits over five years, plus $100 million for workforce training over 10 years. In a letter he sent to Amazon CEO Jeff Bezos that was published by the Orange County Register, Brown also pledges to create a “strike team” to streamline permits (similar to what sped up construction of Golden 1 Center) and to help cities meet any housing and transportation requirements.
Greater Sacramento Economic Council CEO Barry Broome said its bid includes some incentives, but nothing close to what other cities may be putting on the table, much less New Jersey’s offer. “I don’t think anyone should give Amazon seven billion dollars,” he told me.
Indeed, some officials went to absurd lengths to catch Amazon’s eye before Thursday’s deadline for offers. The Georgia town of Stonecrest promised to hand over 345 acres so the online retail giant can create the new city of Amazon. It’s already become a cliché for local officials to post videos showing them asking Amazon’s Alexa app where HQ2 should go so her soothing voice can answer with their city.
Whatever local officials do, however, Amazon executives are going to have the upper hand in negotiations. There’s a reason Amazon recorded $136 billion in sales last year and may become the first corporation with a market value of $1 trillion.
If anything, this entire competition is a brilliant marketing move by Amazon, which plans to announce its decision next year. Instead of the story being how it is hurting small businesses, the focus is on the great jobs it could bring to a moribund city. It’s possible Amazon will end up exactly where it planned in the first place, but with more money in its overflowing accounts.
But cities that make the list of finalists will get positive publicity as well. Just maybe that will put them on the map for smaller companies looking to relocate or expand. Being realistic, that’s the best Sacramento can expect – but it isn’t too bad.
And it’s still worth the effort, if only as practice for when Sacramento has a real shot to land a big company. If this process focuses more attention on how to shore up weaknesses and build on strengths, even better.
Broome said the five weeks that representatives from 19 cities worked on the bid has already lessened parochial divisions in the region. “We’re one community, one team, one vision,” he said. “That’s going to pay off.”
But probably not this time.