Amazon on the hunt for US$5 billion second corporate headquarters in North America

Search is seen stoking a bidding war among America’s top cities

PUBLISHED : Friday, 08 September, 2017, 8:44am
UPDATED : Friday, 08 September, 2017, 8:44am has outgrown Seattle.

The e-commerce giant, which employs about 40,000 people in the city after a hiring boom and urban buildout with little precedent in modern American history, is searching for a second home.

The company said in a news release on Thursday announced it was seeking to place a second headquarters somewhere in North America. The online retailer said it planned to spend upward of US$5 billion on the new corporate campus, and house as many as 50,000 employees there.

The new headquarters will “be a full equal” to Amazon’s Seattle home, chief executive Jeff Bezos said. “We’re excited to find a second home.”

Amazon plans to hire new executives and groups to locate in that headquarters, and also give senior leaders the option of placing teams in one or both headquarters. Employees currently working in Seattle, Amazon said, may have an opportunity to choose to work from the new headquarters.

Plans for a new headquarters, which Amazon is calling HQ2, seems to chart expectations for more rapid growth at a company that was already likely the second largest employer in the US.

After sealing the US$13.5 billion purchase of Whole Foods Market, and its 87,000 employees, last month, the combined workforce likely totalled 469,000, trailing only Wal-Mart and its 2.3 million employees.

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About 40,000 Amazonians work across 8.1 million square feet of office space in the company’s sprawling Seattle campus, and Amazon is on track to grow that physical footprint by half in the next five years.

The public search for a new headquarters will likely spark a bidding war among states and cities eager for a piece of one of America’s fastest-growing companies.

An eight-page request for proposal Amazon posted online Thursday said incentives offered to offset building and operating costs “will be significant factors in the decision-making process.”

Packages of goodies given to companies that promise jobs have come a long way since Chicago snagged formerly Seattle-based Boeing’s headquarters in 2001 with tax breaks worth up to US$60 million.

When General Electric agreed to move its headquarters from suburban Connecticut to Boston last year, the pot was sweetened by up to US$145 million in incentives.

Measured by expected direct employment, Amazon’s scale dwarfs those projects.

The company listed other criteria on its wish list, including an urban or suburban core in a metropolitan area with more than a million people, a highly educated workforce and a “stable and business-friendly environment.”

It’s unclear why the company is moving to split its governance between Seattle and another city, and the company declined to make executives available or comment beyond Thursday’s news release.

But observers pointed out that Amazon’s list of helpful characteristics for a second headquarters included diversity and availability of housing, as well as access to mass transit, features that are in shorter supply in Seattle these days as the region deals with record housing prices and a traffic crunch.

Of course, Amazon’s rapid growth over the last decade, the company employed just 5,000 people in Seattle in 2010, is widely seen as a contributing factor to those growing pains.

Amazon isn’t picky about whether to build or buy. It said it would field proposals for sites that include 500,000 square feet of space in the first phase, or new construction on a plot of 100 acres or more. Plans may eventually incorporate up to 8 million square feet of office space.

Speed appears to be a priority. The company asked interested municipalities to offer their best guess at the timeline Amazon could expect for permitting and other considerations to be completed as part of the proposals it is requesting by October 19.

Amazon expects to announce a decision next year, and start work on the first phase of a new campus by 2019.

“We encourage cities to think big and be creative,” the company said.