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How Amazon Has Changed the Way EDCs Think and Act

In an unusual move for a massive company, last year Amazon publicly released a request for proposals as the first step in its search for a second corporate headquarters. Dangling the prospect of 50,000 new jobs and $5 billion in capital expenditures before North American cities, the e-commerce giant enumerated specific requirements in its seven-page RFP. Of the 258 cities that submitted proposals, 20 were named as finalists.

At CRE.Converge 2018 in Washington, D.C., representatives from three parts of the country, two of which still have proposals under consideration, spoke on a panel on the ways Amazon’s RFP has changed the way EDCs operate. All three panelists agreed that regardless of the final outcome, the process of preparing the proposals for Amazon was beneficial to their cities, counties or regions, and will absolutely help them improve their communities in years to come and better prepare them for future opportunities.

“Cities in Texas came to me with this Amazon opportunity and said, ‘We want to submit a proposal, but we don’t meet all the criteria. What should we do?’ recalled Robert Allen, president and CEO of the Texas Economic Development Corporation. “We advised them to know their strengths and weaknesses, because a company is going to call you out and identify what’s missing. That forced them to have these conversations with everybody in the community at the table. Ultimately that makes us all better.” Both Dallas and Austin were among the 20 cities to make it to the finalist round.

Loudoun County, Virginia, the fastest-growing county in the country, is just one municipality included in the Amazon bid from Northern Virginia, so many players had to cooperate to put together that proposal, explained Colleen Kardasz, assistant director of Loudoun Virginia Economic Development. “These discussions were going on throughout the state of Virginia, and the process forced us to have honest conversations that maybe we otherwise would’ve danced around, or they would’ve taken much longer to be resolved.”

“The single greatest thing that came out of this process for our entire metropolitan statistical area was that it forced Maryland, D.C. and Virginia to seriously talk about funding Metro,” Kardasz said. “We know Amazon could ask how long Metro was funded for and whether we had that infrastructure in place, so creating this proposal certainly accelerated that discussion.”

Despite an extraordinary comeback over the past five years from dramatic economic deterioration, Wayne County, the largest in Michigan and home to Detroit, did not make Amazon’s cut. “Our process was led by both business and government together, with support from philanthropists and politicians, all of whom put ego aside,” said Khalil Rahal, assistant county executive in Wayne County. “We were trying to change the culture and go after this together, which was really helpful.”

“This process was not just focused on incentives,” Rahal explained. “We asked a lot of questions to figure out what would make us more attractive, not just to market Detroit or Wayne County, but for the future. People are flocking to cities like never before – half the world’s population lives in cities now. We realized that improving our K-12 education and public transit were what we needed to focus on.”

“Strong K-12 education was really important to Amazon,” Kardasz agreed. “They want a tech town pipeline. They’re asking, ‘Are you going to have employees I need 10 to 20 years from now?’”

One downside to the Amazon RFP process was that the sheer scale of it dwarfed other competing projects, making them seem less appealing to all involved. “At the same time, we were working on the Amazon proposal, we were in the midst of another deal that would’ve been our largest ever, and it was hard to get people to pay attention to it,” Kardasz said.

“There are 19 really impressive communities with great sites that will be disappointed, but there will be other projects,” Allen said. “It’s not all about Amazon. It’s about everyone else looking at you. Remember other companies out there are watching this process and will want to get their hands on the proposals and try to work with that.” Long after Amazon has made its final decision and broken ground on HQ2, a host of other communities will be better prepared to take advantage of a great opportunity when it comes along.

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