Amazon Weighs Boston in Search for Second Headquarters
Several senior Amazon.com Inc. executives advocate putting a second headquarters in Boston, according to a person briefed on the matter.
Last week, Amazon unveiled plans to open a new base and invited states and local governments to submit proposals. While other cities may ultimately win out, Boston is being considered for its proximity to Harvard University and Massachusetts Institute of Technology, an airport with nonstop flights to Seattle and Washington, D.C., and a lower cost of living than many other big cities, said the person, who requested anonymity to discuss an internal matter.
Amazon said every city remains “on an equal playing field.”’
“We are energized by the response from cities across North America who have already reached out to express their interest,” Amazon said in an email. “There are no front-runners as this point. We are just getting started with the process.”
Amazon already has a close association with Boston, having purchased local robot-maker Kiva Systems Inc. for $775 million in 2012. The e-commerce giant plans to add 900 jobs to a new office along Fort Point Channel in the spring, close to new headquarters being built for General Electric Co., which is focusing on the so-called Internet of Things. MIT recently announced a major breakthrough on voice-activated technology that could be of interest to Amazon, which sells the Echo smart speaker.
Last week, Boston Mayor Marty Walsh tweeted his enthusiasm: “It’s an incredible opportunity — $5 billion of investment and 50,000 new jobs.”
A few years ago, Amazon executives discussed building a second headquarters in Toronto because two decades of rapid growth had left the company feeling constrained in Seattle. But global consumer chief Jeff Wilke objected and said the new location should be in the U.S., the person said. Amazon disputed that Wilke expressed that view.
The internal discussion shows Amazon was privately considering expanding beyond Seattle at the very time it was securing approvals for new office towers in its hometown. While Amazon has boosted the local economy and set in motion a construction boom, critics say middle-income people are getting priced out and that Amazonians are clogging city streets.
Amazon says its new headquarters will cost $5 billion and create 50,000 jobs over the next 15 to 17 years. The move borrowed a page from Amazon’s online marketplace playbook: when sellers compete, buyers win. Politicians around the country and in Canada eagerly expressed interest. Proposals are due Oct. 19 with Amazon scheduled to make a decision next year. Criteria include a metropolitan area of at least one million people with an airport offering convenient flights to Seattle and Washington, D.C.
Picking Boston would disappoint many Amazon employees with families hoping for a more suburban location like Austin, Texas, that offers affordable housing options beyond apartments and condominiums, said Brittain Ladd, a supply chain consultant who used to work for the company and still knows a lot of people there. What’s more, Austin is home to Whole Foods, recently acquired by Amazon for $13.7 billion.
“Texas is absolutely the best choice from the perspective of associates,” Ladd said. “Amazon associates are sick and tired of living in cities with high rents and congestion.”
Even though some Amazon executives favor Boston, the search means the company can consider other locations and tax deals if the Massachusetts city doesn’t offer favorable conditions, the person said.
Article source: Bloomberg