Amazon’s search for a second headquarters in North America is likely to set off a fight among metro cities. Here’s how L.A.’s chances stack up.<\/b>
\nAmazon.com announced Thursday that it\u2019s launching a search for a second headquarters in North America. The $5-billion project \u2014 and the prospect of 50,000 new jobs \u2014 already has sent cities scrambling to land the deal.
Here are some arguments for and against Los Angeles:
Amazon said it would give priority to areas with more than 1 million people that are within 45 minutes of an international airport.
In addition, \u201ca highly educated labor pool is critical and a strong university system is required\u201d in the area, Amazon said in its request for proposal from potential bidders.
The company also is looking for places where its thousands of employees will enjoy living. That means \u201crecreational opportunities, educational opportunities, and an overall high quality of life, \u201d the company said.
A new Amazon headquarters in L.A. would bring the company closer to its Amazon Studios division, which is based in Santa Monica.
The TV division of the studio shoots many of its shows in the L.A. region, including \u201cTransparent, \u201d \u201cBosch\u201d and \u201cThe Last Tycoon.\u201d
The studio has quickly become a major Hollywood player. It produced last year\u2019s Academy Award-winning \u201cManchester by the Sea\u201d and has lured talented stars including Woody Allen, \u201cMad Men\u201d creator Matthew Weiner and \u201cBoyhood\u201d filmmaker Richard Linklater to create original movies and TV series.
This year, Amazon will make its first foray into film distribution when it releases Allen\u2019s \u201cWonder Wheel\u201d in December. In the past, Amazon has partnered with indie distributors, including Roadside Attractions and Bleecker Street, to bring its movies to cinemas.
\u201cAmazon is investing hand over fist in entertainment content, \u201d said Tom Forte, senior research analyst at D. A. Davidson. \u201cSo that element would be a slam dunk.\u201d
The Amazon founder bought a Spanish-style estate in Beverly Hills for $24.5 million in 2007. But last month, he expanded his compound.
The Times\u2019 Hot Property reported that he bought a neighboring home for $12.9 million in a deal completed outside the Multiple Listing Service.
Tax records show the home has 4,586 square feet of interior space on one level. Formal living and dining rooms, four bedrooms and six full bathrooms are among living spaces. There are two fireplaces.
The two combined estates total about 2.5 acres.
The Los Angeles and Long Beach ports combine to create the nation\u2019s largest port complex. Roughly 40% of U. S. imports pass through the ports, which support hundreds of thousands of logistics jobs throughout the region.
Many of those goods are trucked to warehouses in the Inland Empire.
Amazon already has nine sprawling fulfillment centers in California, including five in the Inland Empire. It announced plans earlier this year to build two more Southern California warehouses \u2014 in Redlands and in Eastvale, near Riverside. In June, the company said, it also would be building an 855,000-square-foot facility in Fresno.
There are several other big cities, however, that also meet Bezos requirements.
Many mayors \u2014 including Nashville\u2019s Megan Barry, Pittsburgh\u2019s Bill Peduto and St. Louis\u2019 Lyda Krewson \u2014 quickly voiced their interest, signaling a fierce battle among some of the nation\u2019s largest metropolitan areas could be imminent.
Both rent and home prices have soared in recent years, putting a strain on family budgets and the ability to take out a mortgage.
Businesses are now citing the region\u2019s high cost of living as an impediment to growth. And coastal residents are increasingly moving to cheaper locales in the Inland Empire or out of state in an effort to own a house.
\u201cI personally think this is more about housing than anything else, \u201d said Michael Pachter, an analyst with Wedbush Securities in Los Angeles. \u201cSo Riverside makes more sense than L.A. Or Bakersfield. But you couldn’t pay me to live there.\u201d
Amazon might make a similar decision and determine that coastal Southern California is simply too expensive.
For example, the median price for a home in the L.A.-Orange County metro region was $611,100 in July, while the median rent for an apartment was $2,455, according to Zillow. The median price in Austin, Texas, meanwhile is only $272,400 and rent only $1,536.
Chicago is similar priced, with the median home price at $212,300 and the median rent at $1,543.
Amazon already has an enormous West Coast presence that stretches from Washington to Southern California.
With its headquarters in Seattle, Amazon often used Seattle as a test bed for new products and services. It\u2019s where the company beta tested its AmazonFresh grocery-delivery service as well as its Amazon Go prototype high-tech grocery store.
Adding a second headquarters in a city on the East Coast would give Amazon a fertile new testing ground, with a very different set of customers, Forte said.
\u201cI like Virginia. AOL used to have a headquarters there, and it gets them close proximity to Washington. And Bezos owns the Post independent of Amazon, \u201d Forte said. \u201cIt checks a lot of boxes.\u201d
Although Amazon hasn\u2019 t had trouble attracting talented workers to Seattle, a non-West Coast headquarters also could help it lure employees who insist on living on the East Coast, in the South or in the Midwest.
California doesn’t always compete on tax credits compared with other states, and it already has lost out on some big corporate deals as a result.
One recent example: When Elon Musk wanted to build a massive $5-billion battery plant for Tesla, which is based in Palo Alto, he turned to Nevada.
Musk was able to secure incentives worth $1.25 billion from Nevada \u2014 no property tax for 10 years, no sales tax for 20. Plus, $195 million in tax credits that Tesla could sell for cash.
Point being, other states might be more willing to heavily subsidize Amazon\u2019s second headquarters.
\u201cOne that comes to mind is Wisconsin, just given that they\u2019 re bending over backward for Foxconn, \u201d Forte said of the Taiwanese electronics manufacturer.
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