While the Dallas/Fort Worth (DFW) region has been highly successful in drawing corporate relocations to the area, city leaders, speaking at a ULI North Texas event, said that the main weakness in Amazon’s eye for the e-commerce giant’s second headquarters (HQ2) was an insufficient amount of existing and available talent.
A team from Amazon made two site visits to Dallas/Fort Worth during its nationwide search. After the first visit, Dallas’s urban core made it onto Amazon’s finalist list but was not ultimately selected as the Seattle-based corporate giant announced it would split the proposed HQ2 between the Long Island City neighborhood in the borough of Queens in New York City, and the Crystal City area of Arlington County, Virginia. Nashville, the host of this year’s ULI Spring Meeting, also was chosen as an East Coast operations center. Amazon has since canceled plans for the Long Island City facility.
“It seemed like one long rollercoaster ride for the city,” said Christine Perez, editor of D CEO Magazine, who moderated the event, hosted at HKS Architects in the firm’s downtown Dallas headquarters. “Dallas checked all the boxes and then some, but in the end we lost out . . . they must really love snow and traffic jams and don’t mind that high cost of living,” said Perez, garnering chuckles from a capacity crowd.
DFW’s regional bid was led by the Dallas Regional Chamber (DRC), said panelists. The city of Dallas took over the effort once Amazon narrowed its DFW preference to downtown Dallas.
Linda McMahon, president and CEO of The Real Estate Council (TREC), who was among those helping the city of Dallas in the effort, said 63 sites in DFW were initially identified that could accommodate Amazon’s need for a workforce of 50,000. “That was mind-blowing, when you think about that,” she said. “Just think about what the opportunities could be—not just for Amazon, but for any corporate relocation that we may want to think about.”
The region had six weeks to put its initial bid together, and routed real estate developers and owners through the cities for vetting of their sites, which it said worked well.
Hunt Realty had two sites in the proposal: 11 acres (4.5 ha) in Uptown Dallas that were part of a Victory/Uptown aggregated submission and a Reunion site that included parcels owned by the city and Belo Corp., said Todd Watson, senior vice president of Hunt Realty Investments, who also spoke at the ULI event and said Hunt had just 20 minutes to provide tours.
HKS was enlisted on a pro-bono basis to help the DRC craft the bid. Much of the work to woo Amazon was done “under the cover of darkness,” or, actually, on Saturdays when Dallas Mayor Mike Rawlings, developers, and consultants would secretly gather to strategize the effort, McMahon said.
What Amazon Saw
Amazon visited DFW in February 2018 for the first time and toured five sites it identified from the initial bid. During the remainder of the visit, the DRC focused on providing positive news about its diversity, education, public transit, and ground transportation infrastructure—things that were not widely known, Rosa said, rather than focusing on already well-known strengths such its international airport and its business-friendly climate.
Texas received significant attention in 2017 for its “bathroom bill,” which dominated the Texas Legislature in 2017. The bill would have prevented transgendered people from using bathrooms matching their gender identities and was opposed by a number of business groups and large corporations with a presence in Texas, including Amazon, Google, and Apple. It ultimately died before reaching the governor’s desk.
The following are a couple of interesting details about the tours: the DRC took Amazon officials past several dog parks to let it know the city loves dogs as much as Amazon does and talked about plans for high-speed rail and Uber Elevate to illustrate its can-do, future-growth orientation.
“They left with a very positive impression,” said Rosa, who rode with Amazon officials to the airport for their departure from the first visit. “[Amazon’s] Holly Sullivan . . . went on and on about the quality of the people they met; she complemented us on the organization of the trip; we got a lot done in a short period of time. She fell in love with Mayor Mike Rawlings.”
By the time of the second visit in August, Amazon had narrowed its DFW preferences to Dallas’s urban core. “That visit on August 9 was for one day and it was very specific,” Rosa said. “They came in to check out the sites, the place: downtown Dallas,” Rosa said. “The other half of the visit was, ‘If we landed here, how could we best come in as good neighbors? What do you need from Amazon?” The city of Dallas took the lead role in the second visit, and everyone involved got the impression afterward that Dallas had emerged as a serious contender, Rosa said.
Talent the Deciding Factor
During that second visit, the city also learned that Amazon was compressing its time frame for reaching 50,000 employees from 15 to 17 years by a third to a half, which Rosa said “was a little bit of an alarm bell.” With several universities in DFW, the region was confident it could meet the original time frame for producing tech talent, but a more compressed timeline raised concerns, he said.
Ultimately, the talent issue knocked Dallas out of the running since Amazon needed a place where it could get more tech talent on a tighter timeline.
“When they compressed that time schedule, it really was the driving force to the ultimate outcome,” Rosa said.
Could Amazon Call Again?
Rosa said he watched video of the community hearings between the New York City Council and Amazon officials, where some opposition has emerged. It is speculated that Amazon will be reallocating many of those jobs that were destined for Long Island City to cities where it has existing facilities, including nearby Austin.
“If they were to readjust their decision based on things that didn’t go as they planned in New York, they certainly know who to call,” Rosa said.
But even if HQ2 does not coming calling again, the experience raised DFW’s profile, the speakers said, and that will help it in future relocation pursuits.
“The information that was pulled together for the pitch,” McMahon said, “is a phenomenal sales tool that we can use over and over again.”