Don Cunningham was in a meeting in his Bethlehem, Pennsylvania, office when a colleague texted: “Amazon is looking for a new location. Let’s get it.” This wasn’t just any new location, but a second headquarters. As CEO of the Lehigh Valley Economic Development Corp., a state-funded agency that lures businesses to the region, Cunningham huddled with his staff to read Amazon’s criteria.
They recognized they had shortcomings. Their region is smaller than Amazon wants, it doesn’t have a major airport, and while it does have colleges, they aren’t major research institutions. But Cunningham felt the Lehigh Valley could sell its affordable cost of living and proximity to major cities like New York and Philadelphia, both about an hour away. “We’re a little shy on some of these things, but we’ve got some things going for us so let’s give it a shot,” Cunningham said.
When Amazon announced it was inviting proposals for a second HQ – a corporate investment of $5 billion and 50,000 jobs – it set off a frenzy among governors, mayors and bureaucrats around the country. As with Powerball, the large stakes lead to less rational behavior – all that matters is the jackpot. High paying tech jobs can permanently transform a region and raise the political prospects of the leader who helped seal the deal.
Amazon’s come-one-come-all approach plays into the boosterish politics of economic development, where officials must balance their public enthusiasm with a more private reality: There’s a limit to how much time, money and hope they should spend on a long-shot bid. They have to play Amazon’s game, but worry they’re getting played.
“It is a little bit sadistic,” said Alex Pearlstein, a vice president at Market Street Services, which helps regions develop strategies to be competitive in bids like these. But he understands political pressure on officials to apply. “You never want to say never,” he said. “Maybe a city that isn’t on their radar will just blow them away.”
Pearlstein points to his hometown, Birmingham, which created a hashtag, #BringAtoB with its own website, and erected a massive Amazon shipping box in front a new hip food hall to announce the city’s bid. “They are spending some serious resources on this,” Pearlstein said. “If Birmingham gets it, I mean, I think that would be the shock of the century.”
In addition to giant boxes at multiple locations, Birmingham has installed giant versions of Amazon’s own dash buttons. But instead of re-ordering products from Amazon.com when pushed, the buttons send tweets with the #BringAtoB hashtag and trumpet another cool fact about the Magic City.
It’s not possible to tally how much officials nationwide are spending on PR stunts, strategy advice and glossy proposal packages because many economic development groups are nonprofit organizations not subject to public record laws, but the total will climb well into the millions.
Initial bids are due Oct. 19, and many places have hired big names. To get help with its effort, Virginia is paying consultant McKinsey & Co. $1 million, according to the Virginian-Pilot. Pittsburgh hired Boston Consulting Group to help. Their fee maxes out at $248,000. And the Kansas City Area Development Council, a nonprofit economic development group, is working with suburban demographer Joel Kotkin and urbanist Richard Florida, even though Florida didn’t list Kansas City in his earlier tweets of his “top three” picks (Toronto, Chicago, D.C.), his “second tier” (Dallas, Atlanta, Twin Cities, Denver, Boston, Philadelphia), his “sleepers” (Detroit, Pittsburgh, Austin, Nashville), or places that “deserve more attention” (New York City, Los Angeles) for the headquarters.