Amazon triggered more than a bidding war when it publicly aired its search for a second headquarters. It set off a once-in-a-generation competition.
Atlanta is smack in the middle of an international sweepstakes with just about every other major city in North America, each pitting its own civic touchstones and cultural treasures against one another for the crown jewel in the tech giant’s treasury: a $5 billion bonanza offering 50,000 high-paying jobs.
It’s ignited the same feverish spirit that helped win the Olympics two decades ago. Not since that hunt for the 1996 Summer Olympic Games has the city’s political and corporate class been swept up in such a fervor.
“Atlanta is a city that likes to promote itself. It’s in our DNA,” said Charlie Battle, an attorney who was in the thick of Atlanta’s Olympic pitch. “We were saying we were the world’s next great city long before we dreamed of the Olympics.”
In quiet boardrooms and exuberant press conferences, leaders chart out ways to lure the biggest economic development deal the city may have ever seen. Economic recruiters have worked furiously the past month ahead of Thursday’s deadline for bids to meet Amazon’s demands.
Monstrous tax credits seem a given. Metro Atlanta ranks near the top among cities in the number of Fortune 500 companies, and there will be much talk of synergy with other Atlanta-based behemoths. The Beltline, the busy airport, the booming film industry — all will get starring roles in the city’s pitch.
Religious conservatives who once championed hard-line legislation talk of wrapping their views in more moderate packaging. Candidates for higher office dream up ways to impress Amazon, while incumbents dream of sealing the deal before their terms expire. A new suburb would even deprive itself of its very soul — its name — if Amazon moves there.
Other prominent voices caution that Georgia shouldn’t break the bank with its pursuit. Some worry the state may go too far; one chief executive points warily to Amazon’s mixed legacy in its hometown. The words “prosperity bomb,” a nod to Seattle’s wide inequality gap, invariably creep into the conversation.
Still, others say the exuberance of the chase can be forgiven. If Amazon’s development crackles with the possibilities of lasting jobs with six-figure salaries, they reckon, then bring on the explosion.
‘The Olympics of bidding’
For Georgia’s most prominent leaders, Gov. Nathan Deal and Atlanta Mayor Kasim Reed, the chase comes at a precarious time. The term-limited mayor will leave office in January, though he has his eye on a statewide bid down the road. The term-limited governor will leave office — and public life — the January after that.
Over the next months, they and their successors will wrestle with public policy debates with Amazon’s search factored in. The latest contentious debate over “religious liberty” proposals can’t help but be viewed with the tech giant in mind. A massive tax break, an effort to fast-track transit funding — could they help seduce the Seattle bean counters?
And leaders are mindful of one of the state’s last big hunts for a game-changing development. Georgia lost that bid for a Volvo plant, and the thousands of jobs that came with it, to a much higher proposal from South Carolina. Amazon’s treasure makes that project seem like peanuts.
“Governor Deal is going to compete fiercely for this,” Reed said in an interview. “We’re certainly in lockstep and fully supporting the state’s effort. You know how competitive he is and how competitive we are. And the package we put together is a formidable package.”
This prize won't come cheap. New Jersey lawmakers plan to offer $5 billion in economic development incentives — a staggering sum equal to Amazon's planned investment. Chicago's mayor has already personally appealed to Amazon CEO Jeff Bezos. Kansas City's top politician is urging residents to flood Amazon with five-star reviews of the town. Toronto's leader — who assured reporters his city is all-in — dubbed the sweepstakes "the Olympics of bidding."
And there’s more than a hint of the chase for the 1996 Games in Atlanta’s bid for Amazon. Just as the Olympics did, Amazon demands substantial transit and infrastructure, a massive civic commitment, determined political leadership and a world-class airport.
Of course, Battle cautioned, this competition will have a bit more permanence: While the Olympics needed a city to invade for a few weeks, Amazon needs a place that will serve its army of skilled coders, engineers and other workers for decades.
Amazon’s must-haves
Amazon’s public wish list is broad: It wants mass transit access and sites near highways. Room to expand its campus to 8 million square feet, or something the size of six Bank of America Plaza towers. Proximity to a bustling international airport.
And it needs it fast.
Amazon demands a huge chunk of office space ready for the first phase by 2019.
The company’s other desires are shrouded in secrecy. It inked airtight nondisclosure agreements with top state recruiters and several prominent real estate developers weeks ago.
Deal’s office and the Georgia Department of Economic Development will lead the recruiting effort, leaning on business recruitment teams from utilities, local agencies and major corporations. The Metro Atlanta Chamber will put a high gloss on the pitch, handling much of the marketing effort.
There are a few certainties. Job tax credits alone for Amazon could top $850 million, but Georgia’s pitch will likely climb into the billions with help from “deal-closing funds” the state used to nab prospects such as Caterpillar and Kia. Atlanta, too, has a deal-closing fund of its own.
New transportation funding sources will surely be touted, such as the sales tax increase that will raise $2.5 billion to expand MARTA and the 2015 package of taxes and fees that pumps nearly $1 billion more a year into state coffers for infrastructure improvements.
And Georgia seems poised to offer a range of sites, from the downtown area’s Gulch — that unsightly but potential-packed warren of sunken parking lots — to prime locales along the Beltline. Or in Midtown. Or in the suburbs.
Each has its strengths. The Gulch has a built-in incentive for revitalization for a mega-project that involves capturing sales taxes on-site to fund infrastructure.
In Midtown, state recruiters are exploring whether the AT&T Midtown Center and surrounding developable land might be available. The telecom giant sold the property years ago and is a tenant in the complex that’s about half-empty. The campus and surrounding land touches an Opportunity Zone that could supersize tax credits for new jobs.
Land near Georgia State Stadium (the former Turner Field), the High Street site near Perimeter Mall in Dunwoody and the former General Motors plant in Doraville also are said to be among potential high-profile sites.
At every turn, the state will trumpet metro Atlanta’s affordability and workforce. Georgia Tech and the legions of graduates with engineering degrees it pumps out every year will be at the center of the pitch. So will Atlanta’s cultural trademarks.
A.D. Frazier, the ex-CEO of Invesco who was chief operating officer of the Atlanta Committee for the Olympic Games, learned from a state committee tasked with overhauling the tax code that the most important factors for expanding businesses often have nothing to do with taxes.
Workforce, infrastructure, quality of life and quality schools, he said, “are 90 percent of what matters to a company where they’re locating.”
Voices of caution
The most vocal critics worry that Georgia is primed to fork over billions in incentives to lure a company that doesn't need the money, while ignoring systemic problems — traffic gridlock, crime, housing inequality — on the home front.
State Sen. Michael Williams, a Republican candidate for governor, has questioned the wisdom of sending special tax breaks that he said could far exceed the $5 billion price tag of the project to a “large corporation.”
From across the aisle there are similar concerns. Greg LeRoy, the executive director of the left-leaning incentive-tracking nonprofit Good Jobs First, warns that overeager states might offer Bezos a negative tax rate to win the deal. Georgia, he said, would be better off to tailor its incentives around projects such as transit and expanding education that serve the public good — and not just one business.
“It’s wonderful to have a talent pool,” he said, “but if you can’t access it, it does companies no good.”
There have been voices of disgust from the city’s corporate upper crust, too.
Ex-Home Depot Chief Executive Frank Blake called Amazon the ominous "dark star" in the retail industry. His successor, Craig Menear, might as well have said the Atlanta-based home improvement store won't roll out the welcome mat for Amazon after a recent meeting of Atlanta executives.
"I don't have any comment," Menear told business journalist Maria Saporta, adding: "Has Amazon been good for Seattle?"
Managing an ‘explosion’
Amazon's jungle of developments has strained the fabric of the city as it blossomed into Seattle's biggest private employer. Mom-and-pop stores made way for swanky developments. Traffic congestion clogged nearby streets, creeping gentrification has overwhelmed the city's housing market.
But Amazon’s presence has also turned Seattle into a global tech hub, luring a generation of prized developers — along with their prized wages — to set up shop in the city. Housing prices have soared. Spinoffs and startups have followed. The company has pumped $40 billion into the city’s economy since 2010.
No wonder the state’s leaders seem so willing to take the plunge.
A conservative Republican state lawmaker, Jason Spencer, nodded to Amazon when he outlined a compromise proposal that could lead to the removal of some Civil War monuments. Lt. Gov. Casey Cagle circulated an online petition for Georgians to use their wiles on Amazon. Georgia recruiters created a webpage for property owners to pitch their sites.
And perhaps no one is in deeper than Stonecrest, the young DeKalb County city that voted this month to rechristen itself in Amazon’s name if it’s selected as the new headquarters site. Its City Council’s 4-2 vote also paved the way to set aside about 345 acres of real estate that Mayor Jason Lary said Amazon could use to form it’s own private city.
“Think about this: If you created your own city of Amazon, look at the things you can do. Your own ZIP code. Your own post office. They’re in the shipping business — this is what they do,” he said, bubbling with excitement.
A long shot it might be — the newly-formed city lacks in amenities that Amazon so desires — but Lary may as well have echoed a wave of other Atlanta strivers sprinting toward the big prize.
“It sure feels like the Olympics bid,” said Lary, who was a salesman in Atlanta during the 1996 Games. “But it’s worth it. I’m more than happy to manage the explosion.”
Where in metro Atlanta might Amazon fit?
The most buzzed about question in Atlanta real estate circles is where Amazon might go. The state set up a webpage to crowdsource sites, and many communities pitched the state’s top recruiters on their most prized locations. People who handicap site selection have said these are some of the more promising locations for Amazon in the Atlanta area:
The Gulch
The tangle of rail lines and parking lots in downtown between Five Points and Philips Arena has an incentive structure for redevelopment that makes the site appealing, along with its direct MARTA ties. But other than some vacant office space at CNN Center, does the area have enough existing office space to satisfy Amazon’s needs for at least 500,000 square feet of space for the first phase in 2019?
Midtown
Vacant space in existing buildings is largely scarce, except for Bank of America Plaza and AT&T Midtown Center. State recruiters have inquired about the potential of pitching the AT&T campus, which the telecom giant leases, to Amazon along with a number of nearby parcels that are underdeveloped and available for purchase. An AT&T spokeswoman did not return a message seeking comment. The AT&T campus, at the North Avenue MARTA station, is a few blocks south of Georgia Tech’s Technology Square, one of the hottest areas for corporate expansion in the country.
Beltline
The Eastside trail is one of the city’s hottest areas for redevelopment, including Ponce City Market. The area is not served by transit yet, but plans call for a light rail around the 22-mile loop. Might Amazon be interested in various sites on the loop linked by the trail and future rail network. It wouldn’t be a typical corporate campus, but Amazon is anything but a typical company.
Fort McPherson
The former Army post is 10 minutes from Hartsfield-Jackson International Airport, has two nearby MARTA stations and plans once called for the site to be a bioscience hub. Most of the post was sold a few years ago to filmmaker Tyler Perry for a movie studio. A redevelopment agency controls about 145 acres and has a master developer.
Assembly
The former General Motors plant in Doraville, now renamed Assembly, wooed the headquarters of mattress-maker Serta-Simmons Bedding. Could it entice Amazon? Infrastructure upgrades will connect the site to the Doraville MARTA station, and the campus is close to DeKalb-Peachtree Airport and is on the Gold Line that connects to Hartsfield-Jackson.
High Street
Dunwoody officials are said to have pitched the state on the High Street site, a large tract near Perimeter Mall and the Dunwoody MARTA Station. State Farm is building a corporate campus nearby with a direct connection to the MARTA platform. The property is zoned for office towers, condos, apartments, hotels and retail. The main newsroom of The Atlanta Journal-Constitution is in a building on the property.
