Thursday, 07 September 2017 17:33

Amazon's search for second headquarters likely to set off a race

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Amazon's launched a search for a second headquarters city in North America that would cost $5 billion and employ up to 50,000 people, and Los Angeles plans to be among the candidates. Amazon's launched a search for a second headquarters city in North America that would cost $5 billion and employ up to 50,000 people, and Los Angeles plans to be among the candidates.

Amazon's launched a search for a second headquarters city in North America that would cost $5 billion and employ up to 50,000 people, and Los Angeles plans to be among the candidates.

“I can confirm we are planning to bid,” said Alex Comisar, a spokesman for Los Angeles Mayor Eric Garcetti. He said further details would be coming.

The announcement by the Seattle-based online retailing giant likely will set off a scramble among dozens of major U.S. metropolitan areas to capture the contract for Amazon’s so-called HQ2 project.

“We expect HQ2 to be a full equal to our Seattle headquarters,” Amazon Chief Executive Jeff Bezos said in a statement Thursday. “Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”

Amazon is now soliciting bids for the project and said it would give priority to areas with more than 1 million people that are within 45 minutes of an international airport.

In addition, “a highly educated labor pool is critical and a strong university system is required” in the area, Amazon said in its request for proposal from potential bidders.

“We want to invest in a community where our employees will enjoy living, recreational opportunities, educational opportunities, and an overall high quality of life,” the company added.

Amazon also made clear that metro areas likely will be required to grant incentives to attract the company. The company asked bidders to identify state and local incentives available, including tax credits and utility incentives.

“The initial cost [of the project] and ongoing cost of doing business are critical decision drivers” in which area would be selected, Amazon said.

Amazon, with sales of $136 billion last year, employs about 380,000 people, including thousands at several fulfillment centers in California.

At first glance, Los Angeles and Orange counties would appear to be viable candidates: They have a large available workforce, nearby airports, nearby universities and access to the West Coast ports, which are among the busiest in the nation.

Amazon also has nine sprawling fulfillment centers in California, including five in the Inland Empire, and earlier this year, it announced plans to build two new centers, in Redlands and in Eastvale, near Riverside.

The company also has a film and television production arm, Amazon Studios, based in Santa Monica.

The TV division of the studio shoots many of its shows in the Los Angeles region, including “Transparent,” “Bosch” and “The Last Tycoon.”

In just a few short years, Amazon Studios has become a major Hollywood player. The studio produced last year’s Academy Award-winning “Manchester by the Sea” and has been successful in luring prestige talent, including Woody Allen, Matthew Weiner and Richard Linklater to create original movies and TV series.

For L.A., the prospect of an Amazon headquarters “is a huge opportunity for the city,” in large part because of the economic benefits Amazon would generate in the region, said Lloyd Greif, head of the Los Angeles investment bank Greif & Co. and a former chair of the Los Angeles County Economic Development Corp.

“In terms of the importance to the city, I think the Olympics [in 2028] would pale against this,” Greif said.

But Greif said the city’s bid “likely would require a partnership between Eric Garcetti, [Gov.] Jerry Brown, the LAEDC and others” to create a package of incentives, available land and other features that would appeal to Amazon.

“This would be a regional and state effort … a combined proposal of state and local incentives and cooperation,” Greif said.

But one downside might be that Amazon may not want both of its headquarters on the West Coast. L.A.’s high housing costs also may work against it.

Regardless, Amazon’s search for a second headquarters is the latest example of the company’s relentless growth, both internally and by acquisition.

Late last month, Amazon completed its $13.7-billion purchase of Whole Foods Market Inc., a chain of 470 grocery stores that focus on organic and natural foods.

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