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Upstate Bidding on Amazon HQ2

Oct 04, 2017 12:46PM ● Published by Emily Stevenson

Seattle's downtown Amazon HQ

By John McCurry

 

The biggest deadline of the year in economic development circles is arguably Oct. 19. That’s the deadline set by Seattle-based Amazon for its request for proposals (RFP) for its $5 billion vision for its second headquarters, a project that might eventually employ as many as 50,000.

Amazon is breaking economic development norms with its RFP, going public in a large way. That’s prompting cities, regions and states to also go public with their RFPs, breaking from the usual secretive nature of project recruiting. Many are using gimmicks to draw attention, the latest being Stonecrest, a little-known suburb of Atlanta, that has offered to changed the town’s name to Amazon. The town was just incorporated earlier this year, so a name change presumably wouldn’t be a big deal.

With the hundreds, perhaps thousands of RFPs en route to Seattle, does South Carolina have a chance? Amazon currently has three facilities in South Carolina: a 1.25 million-square-foot distribution center in West Columbia, a 120,000-square-foot printing operation for “make-on-demand” books, also in West Columbia, and a 1-million square-foot distribution center in Spartanburg. The printing operation moved from North Charleston early this year.

The Upstate Alliance may have the only South Carolina proposal in the works, or at least the only one that’s been made public. Other economic development agencies in the state have declined to comment. The Upstate Alliance effort involves a regional approach. Its effort is also relying on facts, rather than attention-getting stunts.

                                 Lummus

 “We are in the process of getting the information together to submit, working with our local economic developers and other sources to put together as competitive a project as we can,” says John Lummus, president and CEO of the Upstate Alliance.

Amazon’s workforce requirement may be the most important, and certainly the most challenging puzzle to solve by agencies submitting proposals. Lummus says his organization is taking a broad, multi-state view.

“We are looking at the region, drawing from 1.5 million people, including North Carolina and Georgia,” Lummus says.

Another key Amazon requirement is proximity to a major international gateway airport. On the surface, Greenville-Spartanburg International Airport doesn’t rise to that level, but Lummus believes it has the capacity and could grow to meet Amazons needs.

“If they get into serious discussions with us, there will be airlines that will want to have direct flights from GSP,” Lummus says. “We can also play into the fact that there are other international airports in fairly close proximity. We have a great airport that is expanding, and already has flights to 15 locations. GSP can handle more traffic, and could get additional routes that would serve Amazon’s needs.”

Lummus believes the Upstate has plenty of attractive attributes, including a major research university [Clemson], an excellent quality of life aspect, and great health care systems.  Amazon will require a major piece of land, and Lummus says the Upstate’s bid will include several tracts to consider. 


               Williams

 Mark Williams, who heads Strategic Development Group, a Columbia-based site selection consultancy, knows first-hand about the media frenzy in Seattle regarding Amazon’s RFP. Williams is chairman of The Site Selector’s Guild, an organization of many of the industry’s leading consultants. By coincidence, the Guild held its annual conference in Seattle last week.

“It’s unbelievable,” Williams says. “That’s all people are talking about. I was interviewed four or five times [by newspapers and business publications] about it.”

Williams declines to handicap the Upstate’s chances, but says Amazon will likely opt for a much larger metro area based on its RFP.

“My sense is from a site perspective,” Williams explains. “If someone is going to tap a labor shed for 50,000 highly qualified people, it would have to be a large metro area of at least two to four million. If you need 50,000, you might interview 10 times that number. That’s a lot of people. It’s going to have to be a powerful labor shed. I won’t tell you what their [the Upstate] changes are or aren’t, but the labor shed is a major factor.”

A consolation prize for many in the Amazon sweepstakes may wind up being publicity. Many will land on the radar screens of site selectors for future projects.

“I would love to see the Upstate, Columbia and Charleston, begin competing more competitively for small and medium headquarters,” Williams says. “They have great potential for this.”

John Boyd, a long-time site consultant based in Princeton, N.J., praises South Carolina for its recent successes involving Volvo and Boeing, but says the state is a decided long shot for Amazon.

“South Carolina is a standout destination for corporate investment, especially in manufacturing and distribution, but clearly South Carolina is an outlier for this project,” Boyd says. “But you have to understand that there are certain benefits for making a credible case for this headquarters by the town fathers and economic development foot soldiers in the state.”

Boyd says the Upstate Alliance can benefit from its proposal by having the opportunity to showcase the regional to a national audience. In the course of its proposal, it can solidify its relationships with the academic and industrial community in the region.

“There is an intrinsic internal value to submitting a proposal, even if they fall short,” Boyd says. “That’s what politicians and economic developers are paid to do, and it’s incumbent upon them to put their best foot forward.”

Jay Garner, an Atlanta-based site consultant, is among those speculating on Amazon’s finalists.

“Based on their [Amazon’s] profile, my top four in the U.S. would be Atlanta, Nashville, Austin and Dallas,” Garner says. “The RDU [Raleigh-Durham] region would be a possibility. If it’s in Canada, I would venture Toronto.”

Garner notes that the Upstate has a long list of favorable attributes such as quality of life, corporate presence, a location central to major U.S. markets, a strong state business climate and a legacy of success, but the Upstate is nevertheless a long-shot based on the 50,000 workforce requirement and the specific profile stated by Amazon.

“Remember, in the location business it’s easier to say no than to say yes, and there will be other major markets that more closely meet their requirements, especially with air service.”

Economic Development, Enterprise

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