Officials say city's selection as Amazon HQ2 finalist already a victory

January 18, 2018

Local government officials and economic development experts expressed excitement Thursday about the selection of Indianapolis as a finalist for Amazon’s second headquarters, while acknowledging there’s a long way to go in the process.

And many called the selection a victory whether or not central Indiana ultimately lands the grand prize.

Seattle-based Amazon announced the top 20 finalists Thursday morning after whittling down a list of 238 proposals from cities and regions in more than 40 states. A bid by Gary and northwest Indiana did not make the top-20 list.

The HQ2 project is expected to cost more than $5 billion and create 50,000 high-paying jobs over the next 10 to 15 years.

The Indianapolis area’s bid effort came from a small group of business and private stakeholders. It was coordinated and funded by the Indy Chamber and led by Fishers Mayor Scott Fadness.

“For us to be in the top 20, it just reaffirms what I think many of us already believed, that the Indianapolis metro is an amazing place with tremendous potential,” Fadness said Thursday morning.

Fadness said the team has not received any formal communication from Amazon since submitting the proposal last year. A team member received a call Thursday morning to inform the team that Indianapolis made the list of finalists, but that notification came only minutes before the news broke.

As for what’s next, that’s still unknown, Fadness said.  The city could be asked to submit more information or a site visit could be arranged, but no specifics have been shared yet.

“I would assume that as we clear the fog of all the exciting announcements today that there would be follow up from Amazon,” Fadness said. “We’ll wait for orders, so to speak.”

Some state and local governments have made public the details of the financial incentives they are dangling in front of Amazon. New Jersey's pitch contains $7 billion in tax breaks. Boston's offer includes $75 million for affordable housing. Chicago also raised eyebrows with a $2.25 billion incentive package, the Chicago Sun-Times reported.

More than 15 states and cities, including Chicago, turned down requests from The Associated Press to detail the promises they've made.

Several say they don't want their competitors to know what they're offering, a stance that open-government advocates criticized.

Those involved in the local bid process are keeping details close to the vest.

Fadness declined to provide details of what went into the proposal from Indianapolis, saying the team had to sign a non-disclosure agreement with Amazon. He said that’s not uncommon in economic development deals when an agreement is still being negotiated.

“It’s a once in a lifetime venture to be a part of —that I can tell you,” Fadness said.

A spokeswoman for the Indiana Economic Development Corp. said the “negotiations are confidential. We look forward to working with the central region and Amazon on next steps, but don’t have anything further to add at this point.”

Fadness said just being involved in the process and chosen as a finalist puts Indianapolis on the map for other companies looking to expand or relocate.

“It gives us legitimacy,” Fadness said. “I think it’s a huge win for us to even be on the list.”

Katie Culp, president of KSM Location Advisors, said she was “pleasantly surprised” to see that the list of finalists included some relatively smaller metro areas such as Indianapolis; Columbus, Ohio; Nashville, Tennessee; Raleigh, North Carolina; and Pittsburgh.

In the request for proposals that Amazon issued last fall, the company said it had “a preference for” metro areas of more than a million people.

Marion County has fewer than a million people, but the population jumps to about 2 million when including surrounding counties.

“It sounds like they haven’t closed the door on this next (smaller) size of city,” Culp said. “The fact that they’re still keeping an open mind here says a lot.”

Population is important, Culp said, because Amazon has said it intends to create up to 50,000 jobs at the new corporate site it’s calling HQ2. A city needs to be of a certain size in order to deliver those kind of numbers.

Ball State economist Michael Hicks said Indianapolis’ smaller size might actually be an advantage. From his perspective, central Indiana, Columbus and Raleigh lead the pack of contenders. Pittsburgh, Dallas, Nashville, Northern Virginia, Atlanta, Denver and Austin, Texas are also on his short list.

“This is where people are moving, and this short list has developable space, minimal congestion problems and large availability of residential development to house 30,000 college educated workers and their families,” Hicks said in written comments.

Hicks said the strongest locations aren’t necessarily the ones with huge incentive packages, but the places that have been doing “robust quality-of-place work for decades.”

In addition to keeping financial details about the bid hush-hush, local officials aren’t willing to talk about possible locations.

The old GM stamping plant site near White River State Park in downtown Indianapolis is widely speculated as an attractive option.

Bill Stephan, vice president for engagement for Indiana University, who has been involved with the Amazon effort, said the region will have to complete an “amplified effort from what took place late last year” in terms of trying to “distinguish Indianapolis as the ideal location.”

“There will be site visits and other due diligence Amazon will conduct in the coming months,” Stephan said. “It’s going to be all hands on deck to try to close the deal.”

Stephan said the university is willing to leverage its existing connections with Amazon—such as internship programs it has with various academic departments—or possibly create new programmatic offerings in order to “be responsive to market needs."

Former Lt. Gov. John Mutz, a retired IEDC board member who was heavily involved in the state’s economic development efforts for years, said “the fact that we’re even on the list is a great thing, and it’s attributed to the people who have been involved in this over the years.”

Mutz said it’s time for the city and state to put its best foot forward and possibly up the ante on the deal.

“You do need to have something in your hip pocket to close,” Mutz said.

Amazon plans to maintain its sprawling Seattle headquarters, but the second home base will be "a full equal" to it, founder and CEO Jeff Bezos said.

The extra HQ will help the rapidly growing company, which had nearly 542,000 employees at the end of September (a 77 percent jump from the year before). Some of that growth came from Amazon's nearly $14 billion acquisition last year of natural foods grocer Whole Foods and its 89,000 employees.

On a web site devoted to its HQ2 project Amazon says, “in the coming months, Amazon will work with each of the candidate locations to dive deeper into their proposals, request additional information as necessary, and evaluate the feasibility of a future partnership that can accommodate our hiring plans as well as benefit our employees and the local community.”

The site does not say whether Amazon will release a shorter list of finalists before announcing its final decision.

Mike Langellier, CEO of state tech advocacy group TechPoint, said the next big step for the Indianapolis is to get Amazon officials here for a visit.

“The recurring theme among visitors, is they say, ‘I had no idea. Once I visited Indy, I loved Indy,’” he said. “Get them to experience what makes Indy and the tech community special.”

For TechPoint, it will assist in the process by continuing to focus on what it does best: helping to build the talent pipeline to support the jobs Amazon will need to fill, Langellier said.

He compared the city’s efforts to lure Amazon akin to what it took to land the Super Bowl in 2012.

“Indy is always in the ‘surprise category,’” Langellier said. “We’re being seen much more prominently now.”


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