If metro Atlanta wins Amazon’s second headquarters and its promise of 50,000 jobs, it likely will be on the strength of its workforce, globally connected airport, ease of doing business and the capacity of Georgia Tech and other research universities to pump out talent.
But the Atlanta area will have to tangle with Boston, Chicago and Los Angeles for brain power, overcome cities like Austin and Denver with their reputations for being cool and weird, and New York and the Washington, D.C., area for their crowns as power centers for business and government elite.
So how does metro Atlanta stack up against its 19 competitors on Amazon's short list? The Atlanta Journal-Constitution crafted ratings based on the tech giant's stated desires, such as workforce, business climate and quality of life. But among the 20-some factors in evaluating the field, the AJC threw in a few of its own, such as the environment and diversity.
On measures of airport connectivity, educated workforce, quality of life, diversity and business climate, metro Atlanta acquits itself quite well, rating near the top in each. Atlanta is middle of the pack for housing affordability and cost of living. Traffic congestion isn’t our strong suit, but nor is it for other top contenders like Boston, Chicago, Los Angeles or Washington.
As Hala Moddelmog, the president and CEO of the Metro Atlanta Chamber scoped the field, she said she felt pretty good about the region’s chances. Some rivals don’t have transit systems as substantial as Atlanta’s – transit access is a priority in Amazon’s request for proposals – while others, she said, can’t match Atlanta’s airport or workforce.
No university, she said, graduates more minority and women engineers than Georgia Tech, a point in Atlanta’s favor in an industry with a demonstrated lack of diversity.
“Once you go up against several of these markets several times, we make sure the companies have not overlooked some positive comparisons for us,” Moddelmog said.
And where cities need an upper hand, they’ll likely turn to lucrative taxpayer-funded incentives, a game Georgia never has been shy about playing. Georgia’s bid is said to include more than $1 billion in tax breaks, grants, transportation upgrades and other perks.
That could just be an opening bid.
Keeping so many contenders on its short list increases the risk of a jobs deal up for auction.
"Competition is a good thing, especially if you're looking for more incentives," said Ben Braley, a senior market analyst in Atlanta with real estate research group CoStar.
Not every city plans to play the incentives game. Boston, for instance, signaled it won’t get into a bidding war it can’t afford.
It might be wise for some contenders to consider joining forces.
Three finalists are in the Washington metro area, while two are in greater New York City. Rather than battling one another, it might be better to share the cost and benefits.
If not, the competition could further fuel regional rivalries.
What Amazon wants
Amazon ignited an economic development competition unlike any seen in years when it announced plans in September for a second headquarters campus that would rival its original in Seattle.
In Seattle, Amazon has more than 40,000 workers across 33 leased or owned buildings largely in the city’s central core. Amazon said it needs enough property for 8 million square feet of office space – the equivalent of six of Atlanta’s Bank of America Plaza towers.
Amazon wants a metropolitan area of at least 1 million that is business friendly and capable of filling 50,000 jobs over the next 10 to 15 years.
» Interactive map: Sizing up Atlanta's competition for Amazon's HQ2
It wants mass transit access and sites near highways, as well as ready access to an international airport. A community that fits the culture of Amazon’s young and highly educated workforce is also a must, the request for proposals said, inquiring about recreation, educational systems and regional quality of life.
Also up high: incentives. Amazon asked communities for detailed information on tax breaks, grants and various fee reductions. Incentives to offset its expected $5 billion investment, Amazon said, “will be significant factors in the decision-making process.”
So far, most of the finalists are playing coy on what they’re offering.
The lack of transparency has galled a number of good government groups.
Greg LeRoy, the executive director of the left-leaning incentive-tracking nonprofit Good Jobs First, warned that states could break the bank on Amazon giveaways, money that could be better spent on transit and education.
“To the elected leaders of the 20 localities, we say: ‘This is not your grandparents’ site location deal,’” LeRoy wrote. “You should cooperate and communicate freely with each other, to avoid overspending and to strengthen your bargaining hand. By Amazon’s choice, this is a public auction, so you should conduct this deal out in the open.”
Some have offered a glimpse of the goodies they’re willing to dangle.
Maryland Gov. Larry Hogan offered a $5 billion package of incentives to bring Amazon to the Washington suburb of Montgomery County.
New Jersey leaders last year offered some $7 billion in perks, should Amazon pick Newark. Mayor Ras Baraka is eager to pitch his city as part of a feel-good renaissance tale.
"It's a story that Amazon could tell about how they were a part of expediting a city's growth, a city that is like a phoenix in the fire, moving forward consistently despite all the obstacles," he said.
Chicago, meanwhile, reportedly is offering $2 billion in various perks.
Among Georgia's arsenal of potential incentives are tax credits for newly created jobs. Those alone could total more than $850 million. The state also has potent "deal-closing funds" that it used to woo the Kia Motors plant and the North American headquarters of Mercedes-Benz. Gov. Nathan Deal has said he could call a special legislative session to discuss additional Amazon-specific incentives.
Local governments can cut substantial property tax breaks. The state also is said to have provided Amazon with information about potential future transportation upgrades in metro Atlanta.
Peter Stathopoulos, partner with accounting firm Bennett Thrasher LLP, who has negotiated incentive packages for major companies, said the value of perks Amazon could get under Georgia law probably total $1 billion to $2 billion, not including grants.
Midwestern states and Texas have deeper “deal-closing funds,” while Georgia weights its incentives in favor of tax breaks.
“Effectively, the company would not be paying taxes for many, many years in Georgia,” Stathopoulos said.
Open for business
First, the good news. In the AJC’s scoring matrix, Atlanta is in the top third of the 20 finalists in measures of ease of business and business climate rankings.
Office space in Atlanta also is cheap compared to most in the shortlist, according to rental data from CoStar. But it’s cheaper in Columbus, Pittsburgh and Raleigh, while about the same in Dallas and Chicago.
Atlanta, with Hartsfield-Jackson International, is connected to almost every corner of the earth. But airports in Chicago, Dallas, Los Angeles, Miami, New York and Washington are just as competitive, and Boston isn’t far behind.
Atlanta rates in the upper third for overall percentage of the workforce with college degrees, but middle of the pack for workers in science, technology, engineering and math (STEM). Austin, Boston, Raleigh and Washington have far more of their workforces in STEM.
The bad news: Atlanta has an abysmal reputation for congestion, and ranks as the fourth most congested metro in the U.S., according to a report by INRIX. Among the finalists, only L.A., New York and Washington were worse.
But Atlanta’s transit system is more robust than Austin’s, and some like Indianapolis and Columbus don’t have rail.
Atlanta will try to counter concerns about traffic with the recent vote by city residents to expand MARTA, and actions by Cobb and Gwinnett counties that could lead to transit expansion. The state, meanwhile, is exploring dedicated state funding for transit for the first time.
Georgia also will surely take note in its pitch that although cities such as Boston and New York have more robust rail systems, Boston had the most breakdowns in 2016, according to federal data, and New York’s transit system is also in dire need of costly improvements.
Livability
In the past few years, the Metro Atlanta Chamber launched a program called ChooseATL to attract young professionals to the Atlanta area by highlighting the jobs market, culture and startup scene. Last year, ChooseATL launched THEA, a streaming video service with original content to showcase Atlanta area artists, creators, entrepreneurs and the region’s cultural touchstones.
The videos include documentary and scripted content. THEA, developed by Atlanta-based, over-the-top video distributor Endavo, is available on Apple iOS and Android devices and will soon stream over Roku and AppleTV.
The program is one way Atlanta is trying to cut through the noise and brand itself as a place appealing to young professionals.
But competition is intense.
Chicago and Austin are about as hot as it gets for attracting young millennial talent, an analysis in Forbes showed. According to census data, they had the highest growth rates in the U.S. of college educated millennials from 2010 to 2015.
Washington, Boston, Pittsburgh, Columbus, and Denver also edged Atlanta – but just barely – in growth among skilled millennials. But Atlanta topped Dallas, L.A., and other contenders, census data show.
The charm of Atlanta is its hip neighborhoods, even if the vibrancy of its downtown can't quite match those of Austin, Chicago, Denver, Nashville or New York.
Atlanta boasts the Beltline, while New York has the Highline. Denver has the Rockies, and Los Angeles and Miami have the beach, though in Florida’s case, the threat of hurricanes comes every year.
Few cities have food, museums and arts that can compare to the cultural treasures of Boston, Chicago, Dallas-Fort Worth, L.A., New York City or Washington, D.C. But Atlanta has emerged as a new hub for film and television production, which could pique Amazon’s interest as it invests in streaming entertainment.
Wild cards
If Amazon is looking ahead to sustainability, that could sway decision-makers to Atlanta’s favor.
Eight of the finalists have been ranked as among the U.S. cities that will be most at risk from climate change. New York City, Boston and Philadelphia, for example, are expected to see more extreme precipitation events, such as heavy snowfalls, and they face threats from rising sea levels, according to an analysis by The Weather Channel. Flooding may eventually make much of Miami unlivable, the analysis says.
Some of the areas are also prone to natural disasters. The Washington Post, analyzing 50 years of government data, deemed Los Angeles the most disaster-prone place in the U.S. Risks there include earthquakes, wildfires and mudslides.
Atlanta, on the other hand, was deemed by the Post as one of the least disaster-prone places nationwide, despite the 2008 tornado that hit downtown.
If the company wants to become a magnet for bright millennials, it might also weigh political climates.
Could Illinois’ political paralysis doom Chicago? For two years, it couldn’t pass a budget, and it faces a mountain of pension debt.
Raleigh’s reputation was hurt by the state’s bathroom bill, aimed at transgender individuals, even though the legislature later revised it. While Texas’ legislature last year didn’t pass the bathroom bill its governor wanted, it adopted his ban on sanctuary cities. Texas, where Amazon CEO Jeff Bezos has deep roots, also has flirted with the idea of secession.
Deal vetoed controversial “religious liberty” legislation in 2016 that critics say could discriminate against the LGBT community. Deal’s veto pen, objections by House Speaker David Ralston and lobbying by the business community and LGBT groups helped Georgia dodge other contentious legislation.
Public education could be a factor. Southern states will have to battle a reputation for inferior public schools. Quality varies widely in many metro areas, though.
Another wild card factor: Cities that could attract a diverse workforce. That’s another of Atlanta’s strong suits and a weakness for Pittsburgh, Columbus, Nashville and Indianapolis, among others, the AJC analysis shows.
Staff writers Johnny Edwards, Bo Emerson, Willoughby Mariano, Jennifer Peebles and Kelly Yamanouchi contributed to this report.
