Amazon's second headquarters: The pros and cons of the finalists

Show Caption Hide Caption Amazon announces 20 locations that could be home to Amazon's HQ2 238 cities across the United States were eager to become the home of HQ2, Amazon’s new headquarters. Amazon has trimmed down its list to just 20 cities.

SAN FRANCISCO — The East Coast bested the West Coast in Amazon's second-headquarters sweepstakes.

The online retailing giant announced the finalists for its so-called HQ2 Thursday, a surprisingly long list of 20 cities and states culled from an unwieldy 238 that began the process.

The nearly two dozen now double down to compete for a $5 billion capital investment and 50,000 new tech-oriented jobs.

But that's not all. By Amazon's own calculations based on the impact its Seattle HQ had on that city between 2010 and 2016, the new headquarters promises to add $38 billion to the local economy, create 53,000 non-Amazon jobs and boost the personal income of non-Amazon employees by $17 billion.

The 20 finalists met Amazon parameters that its HQ2 be in a metropolitan area with more than 1 million people, have a "stable and business-friendly environment," and be in "urban or suburban locations with the potential to attract and retain strong technical talent."

More: Amazon names top 20 finalists in second headquarters race

Analysts forecast the most successful city would need to have at least 4 million residents to reach the scale Amazon sought and draw the required software talent it needs. Some caution that having Amazon plunk itself down in your city can come at a cost.

“In the short term, they’re going to need tech talent and the cultural amenities to attract them, but in the long run they’re going to need room to grow, the infrastructure to move people around the cities and places where they can afford to live," says Jeffrey Shulman, professor of marketing at the University of Washington in Seattle who’s studied Amazon’s impact on the city.

Shulman contends that some of the cities on the list are just too small to be able to comfortably embrace HQ2: "The last thing you want is a city going bankrupt trying to build out the roads and the utilities and the schools Amazon will need."

But that concern didn't stop hundreds of cities here and in Canada and Mexico from sending Amazon highly detailed love letters.

A good number of the passed-over contenders legitimately had a shot (cue the increasingly tech-savvy state of Utah), while others were punching well above their weight (Woonsocket, R.I., is the headquarters for CVS Health but there are only 41,000 citizens in town, according to a 2010 Census).

The successful finalists appeared to sell Amazon on a winning combination of available talent (particularly in the software/IT space), infrastructure (otherwise adding 50,000 new employees could spell gridlock), community vibe (presumably one that jibes with its Pacific Northwest roots) and financial incentives.

Here's a quick look at the strengths and possible weaknesses of the remaining HQ2 contenders:

Atlanta

Affordable housing and other quality of life issues already have lured companies such as Porsche Cars North America to the area, and reports indicate that Atlanta officials are lobbying Amazon hard with financial incentives that could total more than $1 billion. A solid area transportation system adds to the pitch, as does a ready-for-construction, 120-acre downtown plot called The Gulch.

Possible negative: A lack of extensive public transportation will make traffic will be an issue.

Austin

Once known largely for the University of Texas and its fertile music scene, Austin can add tech hub to its resume thanks to playing host to startups as well as the huge annual tech confab, SXSW. Beyond feeling like a hip Texas-version of Seattle, the capital city also boasts fairly affordable housing. And don't forget, Austin is home to Whole Foods, which Amazon just bought.

Possible negative: Reports swirl that Austin could also appeal to Apple for its newly announced hub.

Boston

Boston may well have just pitched: "We have MIT and Harvard.” Certainly access to talent looms large in the city's appeal, what with 300,000 college and university students. The bid did offer up a 160-acre former horse racing track as a potential HQ2 home, but didn't provide big tax breaks or incentives. Instead, the Boston Globe ran a “Dear Jeff Bezos” letter asking Amazon to come help with housing and mass transit issues.

Potential negatives: A distinct lack of boosterism.

Chicago

The City of Big Shoulders comes with a huge talent pool, courtesy of its many universities both in town and nearby, and it offered $2 billion in incentives, according to the Chicago Tribune. The city is major Midwestern hub with a bustling airport, as well as plenty of housing in the greater Chicago area and a robust transit system.

Possible negative: An alarming if declining homicide rate and reputation for political gridlock.

Columbus, Ohio

Four Ohio cities put in bids but only Columbus made the cut. It’s got Ohio State, a major university, and at least 15 other four-year colleges within 40 miles; at least a third of the population holds a bachelor’s degree. The city already supports 20,000-employee JPMorgan Chase, a sign the region can support a large company. Surprising to some, last year Yelp dubbed Columbus one of the country’s “hottest hipster markets.”

Possible negative: Tornados and blizzards.

Dallas-Ft. Worth

The bid from the heart of Texas included more than 30 possible sites in and around Dallas, whose advantages include affordable employee housing, talent-producing universities and the lack of state income tax. Some reports indicated that Amazon might even be offered the spot currently reserved for the Texas Rangers' stadium, since the team is slated to move in the coming years.

Possible negative: Rival and state capital Austin brims with a hip, techy vibe.

Denver

The state’s concise 23-page proposal offered Amazon a few possible incentives that could total $100 million, such as a job growth tax credit, job training grants of up to $1,200 per employee, and in-state tuition benefits for employees. Other pluses include a solid tech talent pool thanks in part to neighboring Boulder and its University of Colorado, great outdoor adventure options and some of the best skiing in North America.

Possible negative: Traffic issues are significant and have drawn offbeat solutions such as Arrivo.

Indianapolis

This Midwestern hub increasingly is known as a tech magnet, with companies ranging from Salesforce and Angie's List calling the state home. Though not much is known about Indy's bid, reports say officials touted the region's existing tech ecosystem, its growing business climate and its many available real estate sites. Another big plus: affordable living when compared to some of the other big finalists.

Possible negative: Difficulty attracting coast-based tech talent.

Los Angeles

Recruiting talent would not be an issue in an area that's home to more than 20 million people, some of whom are graduates of institutions such as Cal-Tech and University of Southern California. Among possible sites for new Amazon offices would be former Boeing space in Huntington Beach and land near the Irvine Spectrum Center and an area in Santa Ana that once housed the Orange County Register.

Possible negative: Soul-crushing traffic, high housing costs.

Miami-Dade

Besides sunny South Florida weather, the proposal highlighted an abundance of office-space-ready land, dozens of universities and affordable housing. And Miami city commissioner Ken Russell issued Amazon a challenge: come for the diversity of talent. "They will recognize how this is really a jumping off point not only for South America but for Europe and the world," Russell told the Miami Herald.

Possible negative: The area's in-progress public transportation system.

Montgomery County, Maryland

If you're wondering why the last three entries aren't consolidated as one contender, you're not alone. This northern suburb of the nation's capital can also cite access to the area's Metro subway line, proximity to great universities and some of the richest homeowners in the nation, such as Bethesda and Rockville.

Possible negative: Traffic, housing and competition from D.C.

Nashville

Tennessee features a strong business environment with no personal income tax and a very reasonable cost of living, along with critical affordable housing options for would be Amazon workers. Nashville itself ranks as the state's magnet city, boasting a growing startup culture, a legendary music scene and a rich cultural history that has earned it the moniker “Athens of the South.”

Possible negative: Public transit woes that even the mayor admits often leave Nashvillians stewing in traffic.

Newark

Not only did Newark offer up $7 billion in tax incentives to Amazon, the New Jersey city's mayor, Ras Baraka, also is giving Bezos the chance to expand his company "in a city that will help them grow and where it would have real social impact." Of course another big lure of Newark — home of Amazon-owned Audible — is it offers less expensive housing for Amazon employees living in New Jersey-New York area.

Possible negative: Beating out its across-the-river rival for HQ2, the Big Apple.

New York City

New York mayor Bill de Blasio took a no-nonsense approach in his letter to Amazon's CEO: "We are the global capital of commerce, culture and innovation." Alrighty then. And what's more, the bid notes that 2.3 million New Yorkers have a bachelor's degree or above, the city has double the tech workers of the Bay Area at 300,000, and it has a lock on top Fortune 500 companies calling the place home.

Possible negative: In the Big Apple, Amazon suddenly becomes just another big company.

Northern Virginia

There are several business-friendly and tech-rich areas in the region that could prove viable for Amazon, including Tysons Corner and Crystal City. The region also is home to some of the most affluent counties in the U.S., including Fairfax and Arlington counties. According to The Washington Post, Virginia Governor Terry McAuliffe backs a plan proposing an HQ2 site near Dulles International Airport.

Possible negative: Competition from nearby Washington, D.C.

Philadelphia

Philadelphia has been a financial powerhouse since before the American Revolution and is home to Wharton, the nation's second-ranked business school. The area boasts dozens of colleges and universities and has a vibrant theater, music and museum scene. Dozens of distinct neighborhoods make it an interesting city to live in and explore, and its relative affordability is drawing young people who can't afford New York City.

Possible negative: Philadelphia is the poorest major city in the U.S. with a poverty rate of 25%. It could find it difficult to come up with incentives to compete with nearby New York City, Newark and Northern Virginia.

Pittsburgh

The Steel City offered multiple building sites to Amazon and what its county executive termed a “very competitive package” of incentives and tax breaks. It even launched a new entity, PGHQ2, designed to facilitate a partnership with the Seattle tech-commerce company. Another plus: Pittsburgh is home to one of the nation’s top-ranked computer engineering schools, Carnegie Mellon University.

Possible negative: With a population of just 300,000, Amazon could swamp the city.

Raleigh, N.C.

The Raleigh bid puts a spotlight on the city's already well known business hub, the Research Triangle Park, responsible for drawing employees to the Raleigh-Durham-Chapel Hill area, which is home to Duke University and the University of North Carolina. While details are scarce, some reports say the area is offering Amazon up to $50 million in incentives over 24 years.

Possible negative: Growing pains at the Triangle may not be able to keep up with an Amazon influx.

Toronto

The Canadian city posted its elaborate bid online for all to see and it broke down into five sections: talent (commitments to graduating more STEM and AI experts), business climate (national health care and lower tax rates mean salary savings), quality of life (urban life mixed with outdoor options), transport and infrastructure (nearly 40% take public transit to work) and sites (10 locations were proposed).

Possible negative: President Trump's Amazon animosity could spike if HQ2 is outside the U.S.

Washington, D.C.

An Amazon headquarters located in the nation's capital would benefit from two perks immediately: proximity to another powerful Bezos-owned institution, The Washington Post, and access to the corridors of political power. The area also has an extensive Metro network that can help workers reach HQ2 without dealing with the notoriously bad Beltway congestion.

Possible negative: High cost of housing.

Contributing: Brett Molina

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