(Bisnow, January 19, 2018) When it comes to Amazon HQ2, it is of little surprise Atlanta made the Top 20. The city hits item after item on the retail giant’s RFP wish list. Business-friendly environment? Check. Plenty of development sites? Check. Educated labor pool with strong universities? Check. International airport? Check. But as Georgia races the final leg, one real estate executive sees the region missing the mark in one area: its politics.
“At the end of the day, Atlanta’s conservative culture will be a drawback,” Atlanta-based Preferred Real Estate Funds President Stan Sonenshine said. That conservative culture came to the fore late last year when Republican Gov. Nathan Deal’s chief of staff warned Republican gubernatorial candidates to ease up on promoting religious liberty bills and other social conservative items to not hinder the state’s bid for Amazon.
Sonenshine may be a lone voice in the wild, especially after the world’s largest online retailer announced Thursday a shortlist of 20 places in the U.S. and Canada that are finalists for the $5B second headquarters that has created an economic development race unlike the world has ever seen. Amazon promises the project will rival its main headquarters in Seattle in size and scale with and will produce as many as 50,000 high-paying jobs. Amazon officials said the company would make a final decision this year. “We are excited to learn that Atlanta has been included on Amazon’s short list,” Georgia Gov. Nathan Deal said in a statement.
“This has been a cooperative effort by the entire region, and we truly believe that Metro Atlanta has the talent, transit and logistics that provides the best location for Amazon’s second headquarters. We look forward to the next steps, and making sure our region remains at the top of the list.”
There is plenty going for Atlanta to leverage with Amazon, including being the home base for UPS and Georgia Tech, which not only can produce software talent, but also logistics talent, Atlanta-based Pattillo Industrial Real Estate CEO Larry Callahan said.
“Atlanta is the leader in a series of industries that are the backbone of Amazon’s future success,” Callahan said. “And all this comes with great weather and a cost of living that is substantially less than the older international cities that are competing for this headquarters.”
“Every element of what they’re looking for in the RFP, we show well,” Hines Interests Senior Managing Director in Atlanta John Heagy said. “But we have to show some humility here. At the end of the day … Amazon is looking for a new second home for a large portion of their business population. And the city needs to be a good fit. And we have to compete very hard to be that good fit.”
“The way Amazon is playing this search is so good as to make the NFL, the leaders in feeding at the government trough, blush,” Atlanta-based OA Development founder Steve Berman said in an email to Bisnow. “Apple is clearly following suit and looking for a similar package of incentives to Amazon.”
Berman said the way Amazon has played its headquarters search gives Atlanta an edge in the competition. “This sort of search bodes well for Atlanta because if, statistically speaking, we are a Top 3 city, it now may mean we have a much better chance of getting at least one of the deals,” he said. “If the government is going to invest taxpayer money on luring corporations here, either HQ2 or Apple is a much better investment than a sports team.”
“Do we really need HQ2? The region is growing nicely without paying such a high price to attract new business,” Sonenshine said. He said HQ2 will disrupt the winning community by pushing up wages and housing prices and applying more stress on infrastructure. “It is a short-term win that, in the long run, makes cities such as Nashville and Charlotte more attractive for corporate relocations.”
New Atlanta Mayor Keisha Lance Bottoms downplayed some of the concerns about Atlanta’s infrastructure and housing affordability issues during a press conference on Thursday. Bottoms said other cities are also facing problems with housing affordability. But the city is tackling the issue along with corporate leaders.
“It’s not just a conversation that people are interested in … but our companies are concerned about it,” she said. “That’s an issue that we are grappling with as a city.”
Bottoms also said “details will be forthcoming” regarding the state’s secretive incentive package offer to Amazon, but she did not offer any clear dates.
Regardless, one of the cities top developers is bullish on Atlanta’s chances of claiming the holy grail of economic development deals.
“I agree with the oddsmakers. We should be the first or second choice,” North American Properties Managing Partner Mark Toro wrote in an email. “Atlanta rises above the rest because of our cost of living, universities and talent, access to transit and the world’s largest airport, as well as our urban and suburban lifestyle options.”
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