San Diego left off Amazon's 2nd HQ Short List

San Diego left off Amazon's 2nd HQ Short List 





San Diego was in a tough race against the 238 competing cities across the United States to receive a bid from Amazon for their HQ2. However, as of January 18th, 2018, San Diego was left off the top 20 short list. Many are unsure if the decision was a blessing for the San Diego community. With an opposing combination of rising mortgage and housing rates to the expansion of new jobs, development and a predicted boom in the economy, it is hard to say whether or not the benefits would outweigh the costs for the differentiating spectrum of residents. 

A San Diego-area proposal was submitted in October by the San Diego Regional Economic Development Corp. The plan proposed four potential sites in Chula Vista, downtown, Mission Valley and Otay Mesa.

Chula Vista’s City Council bolstered its bid by approving a $400 million incentive package for the massive online retailer. That package would have seen HQ2 incorporated into the city’s Millenia mixed-use mega-development. The city also would have provided the company with 85 acres valued at $100 million and tax breaks of $300 million over 10 years.

Called HQ2, the new facility will cost at least $5 billion to construct and operate, and will create as many as 50,000 high-paying jobs.

The 20 potential cities include Atlanta, Austin, Boston, Chicago, Columbus, Ohio, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County in Maryland, Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto and Washington D.C.



HQ2 Impact on Mortgages and Housing

HQ2 is the kind of project that could turn a “second-tier city into a super-hot metropolis,” according to Realtor.com. Being the city chosen for this office could reverse the fortunes of a declining area or send an affluent one to still greater heights. It’s going to be a huge change for one lucky housing market out there.

Even being on the short list will jump-start a lot of development. While a building boom is likely to follow Amazon’s announcement, that may not immediately help the wallet of locals. The chosen city is likely to cause rental rates to spike. Home sale prices would also climb, owing to demand, and it may be more difficult for starter-home buyers to get a mortgage.

However, one need not speculate too much, as there are models of what to expect. One Seattle native took to the New York Times to warn HQ2 suitors that the first thing Amazon “disrupted” was Seattle itself. Timothy Egan notes that the median house price has doubled in five years, from $350,000 to $700,000. Seattle was once “a place where teachers and cops used to be able to afford a house with a water view,” he noted.

Another city to look to is Dallas, which has seen more than 200 companies flock to the region since 2010. Those companies brought an estimated 500,000 jobs and grew the Dallas–Fort Worth–Arlington, Texas regional population by 1.36 million from 2006 to 2016, according to an article from Realtor.com. A median-priced Dallas home could be had for $145,800 in 2008. By 2016, the median price in Dallas had climbed 56 percent, to $227,100, compared to a 19.8 percent gain nationally.All told, current homeowners and skilled workers stand to gain the most from Amazon relocating to their city. Home values will go up, particularly in desirable areas near Amazon’s campus. Skilled workers may find their employment prospects improve, whether they work at Amazon or not, which could help them keep up with local rent inflation.



HQ2 Impact on City Life and Culture

Seattle is also a model for helping to predict how city life and culture will be affected by HQ2. USA Today reports that Amazon has promised to spend more than $5 billion on construction for the new headquarters. This figure pales in comparison to the $38 billion Amazon has sunk into Seattle’s economy over the years. Beyond its 40,000 HQ1 employees, 50,000 non-Amazon jobs in Seattle are said to be due indirectly to Amazon’s presence.

The influence of these figures can’t be ignored. Amazon’s HQ2 announcement led to Green Street Advisors, the real estate research firm, downgrading Seattle’s growth estimate for 2021 by 1.5 percentage points. That’s understandable when you consider Amazon leases one-fifth of Seattle’s Class-A office space.

For HQ2, all those new Amazon and non-Amazon employees will stoke the local economy. The new workers and their families may even change the economy, noted USA Today. Amazon’s hip millennial workforce could spur a new demand for electric car infrastructure, artisanal retailers, or hip bars and restaurants.

At the New York Times, Kirk Johnson observed that Amazon changed how Seattle sees itself and how it is seen by the world. Johnson says HQ2 will “magnify a city’s charms and its warts.” Another notable observation is that Amazon is an engine for change, but not a predictable one. What started as a Seattle book retailer became a retailer of almost everything, then a services portal and a key cloud-computing infrastructure giant. Most recently, there’s Amazon’s acquisition of the Whole Foods grocery empire. So, while change is certain, what kind of change is hard to say.

Final Thoughts

Some people are energized by change; some people dread it. That divide is likely to define what HQ2 means for its chosen city. Those who are most adaptable, well positioned, and industrious could fall in love with their hometown all over again. Others may have a more difficult time with such a transition. No city or economy stays the same forever – change is inevitable. For one lucky city in North America, HQ2 could offer a new opportunity for a more vibrant, booming, and history-making future.

“Getting from 238 to 20 was very tough – all the proposals showed tremendous enthusiasm and creativity,” Holly Sullivan of Amazon Public Policy said in a statement. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

Amazon said it evaluated each of the bids based on the criteria it previously outlined, such as proximity to a major airport and ability to attract tech talent.

Cities made splashy attempts to attract the company’s attention. For example, Tuscon, Arizona sent a giant cactus to CEO Jeff Bezos and Stonecrest, Georgia offered to de-annex some of its land and rename it the city of Amazon.

Meanwhile, Kansas City Mayor Sly James gave five-star reviews to 1,000 random items on Amazon’s website, which tied in the city’s strengths into each post. Amazon has said the second headquarters would be a “full equal” to its Seattle campus. The tech giant estimates its investments in Seattle from 2010 through 2016 resulted in an extra $38 billion to the city’s economy.






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