Amazon CEO Jeff Bezos didn’t ask us to the prom. Our dreams of waking up as a new tech oasis in the middle of the country won’t magically come true.
But don’t take it personally, St. Louis. The retail behemoth passed over 200 cities’ proposals in what became a frenzied race to woo the growing company with tax breaks that reached into the billions.
One small Georgia city even offered to rename itself to win over the e-commerce giant.
In its proposal, the St. Louis region pitched a sky tram between downtown St. Louis and East St. Louis, connecting an Amazon campus that would have spanned the Mississippi River, and a dedicated Amazon welcome center at St. Louis Lambert International Airport.
Tax breaks and other incentives would have reached $5.4 billion between local governments and the credits offered by the states of Missouri and Illinois. The empty 44-story former AT&T skyscraper downtown would have been available immediately for $20 million, according to the region’s proposal.
That wasn’t even as fantastic as the Hyperloop — a futuristic, largely theoretical, super-fast human transporter — between St. Louis and Kansas City that Missouri officials offered up in a measured attempt to avoid hurting the feelings of either city. Kansas City didn’t make the short list either. Chicago did.
The public auction to build a second headquarters, launched by the company in September, garnered 238 proposals from around the country. Despite the fact that Amazon for years avoided collecting the sales taxes many jurisdictions depend on and is blamed for devastating brick-and-mortar retailers nationwide, almost no local government wanted to pass up the chance for a promised 50,000 jobs and $5 billion investment.
On Thursday, Amazon narrowed its search to 20 cities that skew largely to the East Coast with a sprinkling of the Midwest and South. Los Angeles was the only West Coast city on the list. That shouldn’t come as a surprise from a company headquartered in Seattle, said Josh Olson, an Edward Jones analyst who follows the company.
Olson said he is not surprised St. Louis wasn’t picked, and he thinks cities smaller than St. Louis on the final list — Indianapolis; Nashville, Tenn.; Columbus, Ohio; and Pittsburgh — have a high bar to clear. The final decision will likely hinge on recruitment and accessing a vast domestic and international labor pool.
“I think it’s going to be a challenge for those cities to really win the bid here,” Olson said. “At the end of the day, do they really have, call it the international appeal?”
But St. Louis Economic Development Partnership CEO Sheila Sweeney said the effort put forth by the region “was not in vain.”
The proposal was submitted by the St. Louis Economic Development Partnership and co-signed by the city, St. Louis County, St. Clair County, Express Scripts Chairman George Paz, World Wide Technology Chairman David Steward and Washington University Chancellor Mark Wrighton. Sweeney said the region needs to keep that kind of collaboration going.
“For the first time ever a real estate development was proposed for both sides of the river … that’s never happened before,” she said. “We realize the new way forward is to be regional for St. Louis.”
Leaders have used statistics and testimonials that were developed to craft the pitch to Amazon on other projects, Sweeney said. Going forward, economic development officials need to analyze what other cities had going for them and why Amazon included them on the short list.
“It may have been something that we just weren’t able to produce,” she said.
Interestingly, the final list includes three locations in the Washington, D.C. area: Northern Virginia, Montgomery County, Md., and the District itself.
“Obviously Amazon is going to be under greater regulatory scrutiny,” Olson, the Edward Jones analyst said. “The political and regulatory drumbeat grows louder. Whether you want to have an antitrust discussion, and I’m not saying the likelihood of this is high, but the attention from that regard is growing greater from Washington... That would be part of the strategy there to have some greater influence in Washington.”
Others agree. Doug Rasmussen, a St. Louis-based site selection consultant with Duff & Phelps and a former official at the St. Louis Partnership, said there’s likely a desire to have “some access to the regulatory side and to the federal government.”
St. Louis also was likely burdened by its lack of growth, Rasmussen said.
Indeed, recent federal employment data suggest that while employment in St. Louis is still rising, the region’s labor force is flat or even slightly shrinking. An aging population means people are leaving the workforce, and without attracting more people, that could limit future employment growth, said Howard Wall, a professor of economics at Lindenwood University.
“It could have been that Amazon goes to a place like St. Louis and everything follows,” he said. But, he added, “the places they did choose are already growing.”
Denny Coleman, the former longtime head of the St. Louis Economic Development Partnership, said he thinks people will likely flock to whichever city Amazon picks to take advantage of the jobs and economic boost. But he and others pointed to the inclusion of Toronto — a city rich in immigrants and under a far more liberal immigration regime in Canada — as a possible indication Amazon is worried about the current direction of U.S. immigration policy.
He pointed to the efforts of the Mosaic Project at the St. Louis Economic Development Partnership to attract more immigrants to St. Louis and convince those attending local universities to stay as an important area to focus on in the future.
“Growing that immigrant population is very important for St. Louis,” he said. “It’s very important that we do that. And immigrants tend to be schooled in the areas that Amazon is looking for.”
That, and maybe a Hyperloop would help, too.