Does Charlotte really have a shot at winning Amazon’s second headquarters?

Friday, 13 October 2017, 07:33:31 PM. Charlotte’s bid to land Amazon.com’s second headquarters, due Oct. 19, is an all-hands-on-deck affair that includes input from some 40 groups.

The city of Charlotte is something like a nervous job candidate right now, putting the finishing touches on its resume, gathering its best work samples and getting ready to hit “submit” on the biggest application of its life.

The deadline to apply for Amazon.com’s second headquarters location is Oct.19. The winning city will get a $5 billion corporate investment from one of the world’s best-known companies, along with up to 50,000 jobs paying an average of more than $100,000 over the next few decades.

For Charlotte, the proposal is an all-hands-on-deck affair that some 40 organizations are helping to craft. Shots of the Carolina Panthers’ home field will be featured in Charlotte’s pitch video. Duke Energy provided an outline of its local sustainable energy initiatives. Hornets owner Michael Jordan wrote a letter to Amazon CEO Jeff Bezos and other executives urging them to consider Charlotte.

More than 100 North American cities have expressed interest, according to the Seattle Times. It’s an unusually public contest in the hush-hush world of economic development, where cities and states typically work under strict non-disclosure agreements, cloaked in secrecy as they try to lure companies.

“This has never occurred in my lifetime, anything of this scale or potential magnitude,” said Brian Leary, president of Charlotte-based development firm Crescent Communities. He’s not directly involved with the bid, but Crescent is submitting the River District mega-development west of Charlotte’s airport, in partnership with Lincoln Harris, for Amazon’s consideration as its headquarters.

Ronnie Bryant, CEO of the Charlotte Regional Partnership, said the first round of applications is like an open job application. They don’t know if there’s already a preferred candidate, or which other cities Charlotte needs to worry about.

“You don’t know who you’re competing against,” he said. “We’re just putting our best foot forward.”

The city might be a long shot: Numerous analysts, including from the New York Times’ Upshot and the Brookings Institution, have left the city out of the top tier of contenders.

To be sure, landing the biggest economic development in North Carolina history could have some negative consequences in Charlotte, a city already struggling with how to solve its affordable housing problem. In Seattle, Amazon’s fast growth has been criticized for pushing home prices to record highs, and for contributing to traffic throughout the region. Amazon could also spur a battle for employees among companies already in Charlotte.

Amazon, which already has a Charlotte presence, issued a detailed request for proposals listing their criteria, and Bryant said he’s confident the region can meet them. If the city makes it to the next round, Bryant expects the contest to go quiet as confidentiality agreements spring up.

“I’m comfortable we can meet and exceed their expectations in the (request for proposal),” Bryant said.

Here’s a look at what experts say Charlotte has going for it – and obstacles the city will have to overcome – in its bid for Amazon’s HQ2:

Strengths

▪ Plentiful places to build: One of Amazon’s main requirements: Space to build more than 8 million square feet of offices, about what Amazon has at its Seattle headquarters. Charlotte has numerous sites it can offer up throughout the region, many of which are ready to develop.

The River District, planned between Charlotte’s airport and the Catawba River, was just approved for up to 8 million square feet of office space. A big tract of mostly vacant county-owned land in Second Ward uptown is planned for redevelopment, and City Council just approved plans to redevelop a former factory and warehouse just north of uptown, called Camp North End.

There are other possibilities beyond those.

University City is developed mostly with low-density, suburban office parks, and could be built much more densely. There are also still big tracts of dozens of acres of undeveloped land in the area. And south of the state line, Fort Mill and other upstate communities have been luring big companies away from Charlotte, with the promise of big incentive packages and empty land to build.

▪ Charlotte’s airport: Charlotte Douglas International Airport punches above its weight class, with hundreds more daily flights than is typical for a city of Charlotte’s size. That’s because it’s the second-largest hub airport for American Airlines, which operates about 670 daily flights from Charlotte. Charlotte’s airport saw about 44.4 million passengers in 2016, roughly four times more than Raleigh’s airport.

Although there aren’t nonstop flights from Charlotte to Asia, the airport has connections to Europe, with daily nonstop service to London, Frankfurt and other major cities, with the potential to expand.

Charlotte is also a logistics hub that’s well-situated geographically, experts say. It’s three hours from the Atlantic Ocean, and another two hours from the mountains. Access to rail lines and ports will be a plus in Charlotte’s proposal.

▪ Banking and financial talent: Amazon will be seeking thousands of workers to fill jobs in executive management, engineering, software development, legal, accounting and administrative roles.

With both Bank of America’s headquarters and Wells Fargo’s largest employment center, Charlotte has tens of thousands of bank employees, creating a large labor pool. Bank of America employs more than 15,000, while Wells Fargo employs about 24,100. And a host of smaller financial technology firms, such as AvidXchange and mortgage company LendingTree, have grown in Charlotte over recent years, adding more employees.

The influx of young workers will also weigh in Charlotte’s favor.

Charlotte also attracted more 24-34 year-olds in 2015 than anywhere else in the U.S., according to SmartAsset, a personal finance site. Furthermore, in the last three years, 65,000 students have graduated with technology-related degrees from nearby universities, the city says.

▪ Low costs: One of the main factors in Charlotte’s favor: A low cost to live and do business. According to Forbes, Charlotte’s cost of living is 1.3 percent below the national average, meaning salaries paid here will go further. The city also came in 65th out of 200 for Forbes’ cost-of-doing business index, placing it well below the national average.

By contrast, New York City ranked as the most expensive city to do business in, while Boston came in fifth and Washington, D.C., came in sixth. Those cities also have much higher costs of living: 22 percent above the national average in the New York region, 18.3 percent higher in Boston, 23.8 percent higher in Washington, D.C.

“A dollar buys you so much more than some of the other areas we’d be competing against,” said Steve Luquire, CEO of the Charlotte marketing firm Luquire George Andrews.

Luquire is not part of the team putting together Charlotte’s proposal, but he is a past chairman of the Economic Development Partnership of North Carolina and said the region’s low cost and quality of life set it apart. “You find very few people who when they get here want to leave,” he added.

Weaknesses

▪ Lack of culture: One of Amazon’s criteria is “cultural community fit,” including “the presence and support of a diverse population.” Charlotte is smaller than many of the other cities in the running, and recent clashes from issues such as LGBT rights in the wake of House Bill 2 to racially fueled protests after the Keith Lamont Scott shooting have led to questions about whether Charlotte is as open and welcoming as it wants to be perceived.

“When you have an accent in New York, nobody cares,” said Omar Kazzaz, a Lebanon native and logistics consultant who’s been following Charlotte’s bid. “That’s where we should get.”

The New York Times nixed Charlotte from its list of prospective cities for its lack of “cultural edginess.” The city boasts plenty of luxury apartments and breweries, but lacks a robust music scene and a funky vibe like Seattle’s, for instance.

▪ Incentives: One of the biggest factors Amazon may consider are the incentives or tax breaks a city and state are willing to offer to woo the e-commerce giant. This will be something local leaders will take very seriously, as Amazon estimates it injected $38 billion into its hometown Seattle’s economy from 2010-2016.

North Carolina has a history of using public money to draw in corporations.

The state proposed $683 million in incentives to lure in Boeing in 2013, but the jetliner, lured by $8.7 billion over 16 years, ultimately picked Washington state. The biggest incentives deal in North Carolina history was MetLife, which is receiving $87.2 million over 12 years for moving its U.S. retail headquarters to Ballantyne. North Carolina has been outbid on multiple occasions by South Carolina, which has offered larger incentives packages and lower tax rates to companies such as the Keer Group and Giti Tire.

But incentives have been criticized as corporate handouts, and it’s difficult to know whether they will pay for themselves in the long run. It’s imperative therefore to have clawback provisions included in incentives packages that ensure companies keep the jobs promises they make, says N.C. State Economist Michael Walden.

“No one knows where Amazon will be in 20-30 years,” Walden said on a recent WFAE Charlotte Talks radio show.

After all, Amazon started out as an online bookstore over 20 years ago, but it’s now reshaping the entire retail industry, as well as other business sectors. It owns grocer Whole Foods Market, sells devices that compete with Google and Apple and commands its own fleet of cargo planes that vie with UPS and FedEx.

▪ Small transit system: The $1.2 billion Blue Line extension is set to open next year, linking UNCC to uptown, and construction is underway on the next leg of the Gold Line streetcar, but Charlotte’s mass transit system remains limited. Some future arteries such as the Red Line commuter train north to Mooresville and light rail to Charlotte’s airport remain question marks.

“We check a box, but is it enough to be formally considered?” Leary said of mass transit in Charlotte.

He said he expects a commitment to build mass transit will be the “price of admission” for every city in the race.

▪ Big-name schools: Amazon has said a “highly educated labor pool is critical and a strong university system is required.”

Charlotte has well-regarded schools such as UNC Charlotte and Central Piedmont Community College but doesn’t have the flagship research universities of other cities.

Charlotte’s education system, Kazzaz said, could be “good, but not good enough” in Amazon’s eyes.

Ely Portillo: 704-358-5041, @ESPortillo

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