Amazon’s search for HQ2 challenges cities

Are Nashville and Atlanta prepared to pay the price?

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Derrick Jean-Baptiste

A few months back, Amazon announced that it is currently on the hunt for a new location for a second headquarters.

This, of course, sparked a bidding war in cities around the United States.

These cities have done a number of ridiculous things in order to be noticed by Amazon.

One in particular that stands out is the decision by Stonecrest, Georgia.

The city council of Stonecrest, Georgia, voted 4 to 2 on Monday to change its name to Amazon, Georgia, and give the company 345 acres of land if Amazon selects it as the HQ2 destination.

Despite the oddly dystopian offer of naming its town after a big corporation, this is exactly the kind of romantic proposal Amazon wants to hear.

The company is asking cities to provide incentives such as tax credits, fee reductions, relocation grants and more in order to become Amazon’s second headquarters.

In its RFP document, Amazon outlines its preferences for the HQ2 location. The company is looking for metropolitan areas with more than one million people, a business-friendly environment, locations with the potential to attract and retain strong technical talent, and, finally, communities that are created when considering locations and real estate options.

So before Lakeland was able to throw its hat into the ring, our hopes were dashed just like that.

There are 20 finalists for Amazon’s second headquarters: Los Angeles, Denver, Dallas, Austin, Chicago, Indianapolis, Columbus, Nashville, Atlanta, Miami, Raleigh, Pittsburgh, Toronto, Boston, New York City, Newark, Philadelphia, Montgomery County, Northern VA, Washington D.C., and Miami.

So, what will these 20 towns receive if they are selected by Amazon? According to Amazon, for whichever city gets HQ2, the project is expected to create as many as 50,000 new full-time jobs with an average annual compensation of $100,000 per employee.

So which cities should have the privilege to host Amazon’s new HQ2?

Given the information known about all 20 cities, two in particular would be my choice: Nashville and Atlanta.

Nashville is a potential hub because of a number of reasons.

For one, Tennessee does not have a state income tax, and the state itself is very business friendly. Amazon already has a presence there, with a large number of Amazon engineers working at the Nashville plant already.

Nashville is a major logistics hub, and with FedEx headquarters stationed there, it only makes this pick an even more solid choice for Amazon.

Atlanta is another solid choice because it has the world’s busiest airport, close proximity to major ports (Brunswick and Savannah), a growing film and television industry, and access to several major distribution hubs. This is all not to mention the fact that Atlanta is home to a large pool of tech talent.

It helps that Georgia Tech, located in the heart of Atlanta, is one of the world leaders in supply chain logistics research.

All and all, Amazon’s RFP reads like a plea for Atlanta or Nashville to throw in an offer. So, Atlanta and Nashville should be pretty excited about their futures.

Amazon is coming to town, and we can all get excited about the influx of change within the community.

While this only sounds like a good thing for a city, however, evidence indicates that might not be the case.

Amazon’s current headquarters in Seattle has had a number of different positive benefits as well. To name a few negative consequences, the growth of Amazon in Seattle has contributed to higher rent and home prices, which is displacing a large number of lower-income families. So, whatever city is chosen will experience a focused ray of gentrification.

Gentrification is good for the folks who are moving to a community but pretty terrible for
folks who already live there.

The general idea of gentrification is that as neighborhoods gentrify, the property values increase, and the current residents can no longer afford to live there. I have seen this happen in my own neighborhood. It used to be low to moderate-income housing.

About five years ago, developers started buying up a few homes and tearing them down to build townhomes.

Each time this happened, it made the area more attractive for development and new townhomes would go up. Over each of the five years, the property values of the existing lower-income homes went up by the statutory maximum every year.

Folks who owned could no longer afford to pay the property taxes on their houses, which now had a book value of twice what they did five years ago (and thus twice the taxes).

Folks who rented had their rents go up similarly or were denied lease renewals (since many
landlords wanted to cash out).

Now, there are virtually none of these lower income homes left. All of the residents, many of whom had their families living in that neighborhood for several generations, have been displaced.

Their community was fragmented as they were forced to find lower cost accommodations
elsewhere in the city.

Their “way of life,” as it were, was destroyed by gentrification.

This could very well happen to the city that Amazon chooses. The lower class will carry the brunt of the negative impact while upper classes will get the benefits.

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