Affordable real estate, buildings within walking distance of each other, great mass transportation and a city that’s got a plan for affordable housing.
Those are some of Amazon’s top priorities as it gears up to pick a city for its $5 billion second headquarters where it will build an 8-million-square-foot campus for up to 50,000 employees. Twenty metros made the list out of 238 that submitted proposals.
Pitting potential sites against each other is a hallmark of Amazon’s fast-moving, hardball strategy to strike the best deal for real estate projects. The company used the tactic to elicit more than $1.24 billion in subsidies from state and local governments to help build out its U.S. fulfillment and delivery network.
Amazon has said that it is looking for cities that are progressive and are forward-thinking, with good mass transportation.
Amazon is also looking for areas where its employees can afford to buy homes.
Housing is least affordable in spots like Washington, D.C., and New York. However, Dallas-Fort Worth seems to have a leg up in the Amazon real estate hunt for an HQ2 campus based on the region’s availability of housing stock, says one North Texas analyst.
The region is an easy fit for the HQ2 campus based on the specifications of Amazon’s Seattle headquarters, said Greg Willett, chief economist of Richardson-based RealPage Inc., a data analytics firm that tracks the U.S. apartment industry.
“If you consider the tech talent needed and the real estate you need to make the deal with — a site where you could build all this office space and have the available housing in a neighborhood — three areas really jump out at you, and one of those is Dallas,” said Willett.
In all, North Texas has about 57,000 apartments — or roughly 33,000 vacant apartments in existing properties and another 24,000 apartments that are under construction — available for a major employer, like Amazon, to help fill.
Atlanta also has a ready-to-go supply of about 43,000 apartments — with about 30,000 vacant apartments in existing communities and another 13,000 apartments under construction.
The housing supply in both U.S. metros are also relatively affordable compared with the rest of the nation, Willett said. The average apartment rent in Dallas’ metro is about $1,124 per month, or at a 35 percent discount to a similar apartment in Seattle. If Dallas lands the HQ2 campus, Willett said he would expect housing costs to rise, but it wouldn’t be as big of a spike in costs as it would be in other more expensive or supply-constrained cities.
In its effort to land HQ2, North Texas also is touting its transit options, including Dallas Fort Worth International Airport, as well as its low cost of living, abundant commercial real estate and talent pool as reasons the tech giant should build in the region. Dallas Mayor Mike Rawlings even went so far as to call the city and Amazon “soul sisters.”
“Think of how they’ve grown in the last 10 or 15 years,” Rawlings said, referring to Amazon. “That’s us. We’ve created more jobs in America than any city in the United States. We know how to kind of keep costs low. Our cost of doing business is 12 percent lower than the median.”
Dallas-Fort Worth ranks fifth in air service strength among the 20 contenders, according to a new analysis by aviation data provider OAG. That puts the region behind New York, Chicago, Los Angeles and Atlanta, in that order.
DFW ranks just ahead of Denver, followed in order by Miami, Toronto, Washington D.C., Nashville, Boston and Philadelphia. Austin, the only other Texas city on Amazon’s shortlist for the project, ranked 13th in air service in OAG’s analysis, followed by Raleigh/Durham, Pittsburgh, Columbus and Indianapolis in last place.
North Texas, home to American Airlines and Southwest, tied for second with Chicago in terms of city pairs connected. Chicago is home of United Continental Holdings Inc. and O’Hare International and Midway International airports. DFW and Chicago both have 201 city pairs.
DFW serves 46 international markets, although with slightly lower levels of frequency compared to Atlanta and Chicago, OAG notes in a blog posting accompanying its study.
Some believe Amazon’s decision may ultimately come down to financial incentives. Even still, Dallas-Fort Worth officials are confident the region can compete in the high-stakes giveaway game.
Specifics of the Dallas-Fort Worth bid for HQ2 have not been released, but economic development officials say North Texas won’t be blown out of the water by financial incentives of as much as $7 billion from New Jersey or $5 billion from Maryland.
DFW has advantages such as low costs of doing business, no state income tax and a relatively low cost of living, so it doesn’t have to offer as much in other incentives, said Mike Rosa, senior vice president of the Dallas Regional Chamber’s economic development program.
“We compete very effectively, I believe,” Rosa said. “Incentives are offered off of a base business case. So in Texas, and in Dallas-Fort Worth, we’ve got a very low-cost business case upon which to add incentives and other inducements as we see fit to encourage the location here.”
Incentives may be the icing on the cake, but business basics frame the foundation of companies’ relocation and expansion decisions — and that’s where North Texas shines, Rosa said.
“A company like Amazon is going to look from the bottom up,” he said. “They’re going to look at everything for years and years to come.
“Our real sweet spot is for companies like Amazon that need scale, that need growth, that need sanctuary in terms of a business climate that is going to remain stable and productive and business friendly for years to come, and a place that can attract talent.”
DFW brimming with potential corporate relocation sites
When it comes to finding big, open spaces at affordable prices to build a new corporate campus, North Texas seemingly has no shortage. And that certainly appears to be the case in the well-publicized real estate search of Amazon.com Inc.
Here’s a look at some of the top pitches for Amazon’s HQ2 or another major corporate campus throughout 10 cities. At least 12 cities submitted roughly 30 properties to the Dallas Regional Chamber for inclusion in the regional bid for Amazon’s second North American headquarters. Other North Texas cities also have locations for Amazon to put a 100-acre campus in the community, but details on those sites were scarce.
Mayor Mike Rawlings and other city officials say they will leave nothing on the table when it comes to recruiting Amazon to Big D.
The Matthews Southwest development site adjacent to the proposed Texas high-speed rail station in the Cedars neighborhood could sway Amazon to put its HQ2 next to the next-generation transit system A group of developers in Victory Park and adjacent to the American Airlines Center-anchored neighborhood have cobbled together enough land along the DART rail line to accommodate Amazon A group of three stakeholders and developers behind Dallas Midtown have come together on a proposal for Amazon’s HQ2, which includes an Amazon Park Dallas’ central business district has enough existing vacant space in some of the city’s trophy towers (various landlords, including the ownership behind Bank of America Plaza, are making a pitch) Exposition Park, which sits across from Fair Park in southern Dallas, could be an urban location for Amazon The development group behind Trinity Groves has teamed up with Dallas-based KDC on pitching the remaining acreage surrounding the restaurant incubator A group of property owners in Oak Cliff — including the developers with plans for the former Oak Farms Dairy plant — say they are in close proximity to young professionals a company like Amazon wants to employ
Richardson, which is home to North Texas’ Telecom Corridor, could bridge a successful partnership with Amazon for its second North American headquarters after a track record of teaming up with innovative companies.
The UT-Dallas campus, a 119-acre tract, sits on the north side of UT-Dallas Dallas-based KDC has available land on the east side of CityLine The proposed Palisades development which is on the west side of North Central Expressway
Plano, which landed Toyota North America’s headquarters campus, hopes to attract Amazon with its historic downtown and its various options for redevelopment throughout the city.
Plano’s historic downtown in partnership with Heritage Creekside and Collin Creek Mall: The proposed site stretches from downtown Plano to the western side of North Central Expressway The 250-acre Moore property by the Plano Event Center on the east side of North Central Expressway Legacy Central, an 84-acre former Texas Instruments campus Historic Haggard Farm, a 280-acre farm, sits on the east side of the Dallas North Tollway
Allen officials are proposing two big projects within its city limits with the help of two developers that are no stranger to landing big corporate tenants.
The Strand, a 135-acre mixed-use development proposed by Houston-based Hines Dallas-based Howard Hughes Corp., a real estate investment firm, has a 238-acre site in Allen at North Central Expressway and State Highway 121
The proximity of Dallas Fort Worth International Airport has city officials with Irving getting in the game.
Cypress Waters, a corporate magnet being developed by Lucy Billingsley, could be a good fit with the amenities and land to support thousands of employees Property owners in the Las Colinas Urban District have cobbled together acreage to propose to Amazon. Former Texas Stadium site with some adjacent property Verizon’s Hidden Ridge development, a 100-acre site sits west of State Highway 114 Passport Park, the proposed 600-acre development sits at the southern gateway of DFW Airport, north of State Highway 183
Fort Worth officials plan on offering a variety of urban options to Amazon for a potential HQ2 campus.
The $6 billion Walsh master-planned development is located along Interstate 30, about 12 miles west of downtown Fort Worth Ross Perot Jr.’s AllianceTexas, the 18,000-acre development includes the cities of Fort Worth, Roanoke, Haslet and Westlake, as well as Tarrant and Denton Counties Panther Island adjacent to the Trinity River, the 800-acre proposed project sits north of downtown Fort Worth. Various sites along the new Chisholm Trail Parkway, the entire 27.6-mile toll road extends from downtown Fort Worth south to Cleburne.
Arlington’s plans to pitching some development sites in Arlington to Amazon for consideration for its second North American headquarters. Officials aren’t detailing locations, but we know one big project underway in the city limits that could get Amazon’s attention.
The Texas Rangers, with the help of Arlington, has started on the club’s $1.1 billion enclosed roof stadium. This is part of a larger project called Texas Live!
Denton has plans to pitch Amazon with the help of its two universities — the University of North Texas and Texas Woman’s University — that enroll more than 50,000 students and potential employees.
A site in downtown Denton Two other sites sit on the north and south side. Denton officials wouldn’t disclose the locations.
The fast-growing city plans submit a number of sites along a major North Texas corridor. The city wouldn’t disclose the sites, saying they planned on submitting six sites within the 10-mile stretch of the Dallas North Tollway between the Sam Rayburn Tollway and U.S. 380. Here are some of those known sites.
Frisco Station, the 242-acre development wraps around the The Star along Warren Parkway Wade Park, the 175-acre development The Star in Frisco, which is anchored by the Dallas Cowboys headquarters Tracts at the Dallas North Tollway and U.S. 380 at various corners of the two roadways
McKinney plans to make a move in submitting a proposal on behalf of the potential development sites in the city. Officials kept quiet on the location, but the city has begun marketing a high-profile site at its southern gateway.
McKinney has brought Dallas-based KDC in to market a development site at its southern gateway, called Southgate McKinney
Dallas Business Journal senior reporter Candace Carlisle’s pick: If Amazon has the ability to propel the development of Texas high-speed rail by putting its second North American headquarters adjacent to the proposed rail station, I would recommend regional officials back this downtown Dallas plan. However, Dallas Midtown, Victory Park, and refilling downtown Dallas should not be ignored by the Seattle-based e-commerce giant. If anything, this exercise proves that North Texas has the development options and community enthusiasm needed to land a major corporate player.
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