Amazon’s HQ2: An Upside Down Take on Site Selection

By September 14, 2017Blog

By William Mellor

Vice President, AE


Bravo, Amazon. Well played. Nothing gets people talking like announcing a $5 billion HQ investment that will create 50,000 jobs in whichever community comes out on top.

Their approach was genius: state the requirements of the site, outline some general expectations, drop a few not-so-subtle hints that incentives will be factored into the decision, then sit back and watch as more than 100 communities across the U.S. and Canada stumble over themselves to pitch their community.

Their approach is also counter to the traditional site selection process, which typically relies on strict anonymity and confidentiality until the company has a short list of only 2-3 communities. And even then, the company’s identity is not publicly announced until the winner has been decided.

As we all know, Amazon plays by different rules.

Of course, everyone from the New York Times to the local picayune is speculating on which community will be declared the victor. The prize purse is $5 billion in direct investment, 50,000 new jobs, and another $6 billion in annual indirect impacts. Oh, and your trophy could look something like this.

Here’s the good news:

This project is going to bring communities and regions together in a way that few projects can. It will take nothing short of each community’s very best proposal to land this project. That means working with all of your community partners to put together a package that will stand out from the rest.

Creating a best-in-class proposal will require a razor sharp focus from all involved. But let’s be honest, getting everyone on the same page is probably one of the most difficult aspects of any Economic Development Director’s job. Projects like HQ2 have a funny way of aligning interests within a field that brings to the table a spectrum of ideas and perspectives.

The benefit? Even the communities that don’t win HQ2 will have the experience of collaborating in a meaningful way that will improve their prospects for future opportunities.  

Here’s the bad news:

Many communities will over-extend themselves in an effort to win. They will make promises they can’t keep and/or offer more incentives than they can afford. They will do this to compensate for other shortcomings in their proposal. Actually, using incentives to overcome areas of weakness is a great strategy. However, you have to already be a great fit for the company.

Here’s the problem: incentives can never turn a bad location into a good location – they can only offer temporary refuge. In an effort to win HQ2, many communities will undoubtedly make offers that do more than just level the playing field, they will make offers that will attempt to mask underlying problems.

The Takeaway:

Amazon is turning the traditional site selection process on its head. In doing so, there will be varying outcomes for communities across the nation, some good and some bad. As for who the winner will be? Only time will tell.

In the meantime, you can find me catching up on my favorite shows on Amazon Prime. 

Leave a Reply