Confirmed: Amazon Was Never Coming to Philadelphia

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Photo by Matt Rourke/AP

After 13 months of nonstop Amazon HQ2 hullabaloo, we can all breathe again, for we can officially confirm what many of us knew deep down: Amazon was never going to come to Philadelphia.

In fact, it seems likely Amazon was never going to land anywhere outside the New York and the Washington, D.C., areas, the two locations across which the cunningly calculating tech giant announced on Tuesday morning it will split its headquarters.

That is, the company plans to divide the promised 50,000 jobs and $5 billion in economic impact evenly between Long Island City, Queens, and Arlington County Virginia’s Crystal City, or what Amazon is now branding National Landing.

Plus, a third city — Nashville, Tennessee — will get a piece of Amazon. The company has announced that the city will receive a new “Center of Excellence” for its operations business, which will bring 5,000 new jobs. The Southern hub will handle Amazon’s customer fulfillment, customer service, transportation, and supply chain operations. Hiring at all three locations will commence in 2019.

“We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon, in a statement. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”

In Philadelphia, the response from Mayor Kenney was upbeat and hopeful.

“While Philadelphia was not ultimately chosen for Amazon’s HQ2, I thank Amazon for its consideration and am honored that we were among the top contenders,” Kenney said in a statement.

The process benefitted Philadelphia “in many ways,” Kenney said, by thrusting the city into the national and international spotlight. According to the mayor, the competition showed that Philadelphia is a viable site for other large-scale projects and notable stakeholders[1] gathered around a shared message about Philadelphia.

“I am hopeful that we will continue to harness the energy found throughout this process and apply it to future business attraction, retention, and expansion efforts in Philadelphia,” Kenney said.

Though the mayor’s statement is respectful of Amazon’s decision to locate its headquarters elsewhere, the results of the process are nothing like what the most hopeful or even the most cynical of observers expected.

When Amazon launched the project in September 2017, it touted a $5 billion impact for a single second headquarters that would be a full equal to its Seattle hub. This brought on hope that the headquarters had the potential to mobilize a city that needed some action. Now it appears Amazon is simply opening a set of offices across already affluent East Coast metro areas.

As to why the company is splitting the headquarters between two cities, Amazon said, “We can recruit more top talent by being in two locations. These are fantastic cities that attract a lot of great talent.”

The company also doubled down on the size of the two new locations: “Amazon’s biggest office outside of Seattle in the U.S. has 3,100 employees — we are planning to grow both these new headquarters to over 25,000.” The new locations, though not as big as Seattle, will be bigger than everywhere else. Plus they’ll house more “senior leaders” and host more “cross-company meetings.”

It’s clear talent was Amazon’s driving factor in making its decision.

“We were looking for a location with strong local and regional talent — particularly in software development and related fields — to continue hiring and innovating on behalf of our customers,” the company said.

Last fall, 238 candidates across North America submitted bids[2] to lure the tech giant, but only 20 survived the first round of cuts in January. Philadelphia was named a finalist[3] after submitting a #PhillyDelivers-themed bid[4] that focused on the region’s talent, livability and logistical advantages.

Amazon kept the energy high early on by conducting site visits[5]. In Philly, officials worked to woo Amazon with a special Barbuzzo dinner[6], among other things. Then for months, communication between the tech giant and the city apparently went quiet all the way up until Tuesday’s announcement.

While some of us may be letting out sighs of relief that we evaded the potential negative[7] consequences[8] that could come with Amazon, the city has still not released the contents of the incentives package[9] it submitted to Amazon. Amazon has now released its economic incentives agreements with New York[10], Arlington[11] and Nashville[12].

Philadelphia-affiliation organizations have reportedly spent more than $500,000 on the city’s bid, from wrapping Seattle buses[13] with Philly marketing campaigns to developing high-tech videos for the city’s storytelling efforts.

We’ll have to wait and see how Philadelphia uses the positive insights it has supposedly gleaned from the public spectacle.

Endnotes:
  1. notable stakeholders: https://www.phillymag.com/business/2017/09/07/amazon-headquarters-philadelphia-reasons-business-community/
  2. submitted bids: https://www.phillymag.com/business/2017/10/19/philadelphia-amazon-hq2-bid-submitted/
  3. named a finalist: https://www.phillymag.com/news/2018/01/18/amazon-philly-finalists/
  4. #PhillyDelivers-themed bid: https://www.phillymag.com/business/2017/10/18/amazon-philadelphia-headquarters-bid-pitch/
  5. site visits: https://www.phillymag.com/news/2018/03/15/amazon-scouts-philly/
  6. special Barbuzzo dinner: https://www.phillymag.com/business/2018/10/25/amazon-hq2-philadelphia-dinner/
  7. negative: https://www.phillymag.com/news/2017/10/19/amazon-hq2-philadelphia-costs/
  8. consequences: https://www.phillymag.com/property/2017/09/19/hello-amazon-hq2-goodbye-affordability-assuming-that-happens/
  9. the city has still not released the contents of the incentives package: https://www.phillymag.com/news/2018/08/27/amazon-hq2-bid-philadelphia/
  10. New York: https://d39w7f4ix9f5s9.cloudfront.net/4d/db/a54a9d6c4312bb171598d0b2134c/new-york-agreement.pdf
  11. Arlington: https://d39w7f4ix9f5s9.cloudfront.net/7a/73/afe9680c49f482e9b7e46ad497e6/arlington-county-agreement.pdf
  12. Nashville: https://d39w7f4ix9f5s9.cloudfront.net/58/d7/67deb4b44eb488e001c6662055eb/nashville-and-davidson-county-agreement.pdf
  13. Seattle buses: https://www.phillymag.com/business/2017/10/31/amazon-headquarters-visit-philadelphia-ads-seattle/

Source URL: https://www.phillymag.com/business/2018/11/13/amazon-philadelphia-hq2-decision/