Amazon’s shortlist of cities that stand a chance to host HQ2 may have arisen out of many factors and the data stacks them in different ways.
The nation’s capital looks like a favorite to land Amazon’s second North American headquarters.
Amazon showed 218 cities, counties, states and provinces the door, cutting the list of eligible suitors for its second home down to 20 Thursday morning, and three of the spots left standing are in the Washington, D.C. area. GeekWire co-founder John Cook put D.C. at the top of his list of remaining cities with the best shot of landing the Seattle-based tech giant.
But the data may say otherwise.
Following the initial announcement of the HQ2 sweepstakes, we ranked top contenders based on the information in Amazon’s request for proposals, and today we’re going back to the data to see how the remaining suitors stack up.
Our top three data-driven candidates to land HQ2 are Toronto, Boston and Philadelphia. D.C. comes in sixth in our ranking.
Toronto was a popular pick in the GeekWire newsroom soon after HQ2 was announced. Boston has been rumored as a favorite since the beginning. Philadelphia would be a little more of a peculiar choice, but it sits along the same East Coast corridor as many of the other shortlisted areas while providing a more affordable alternative to places like Boston and New York.
Here are the four main criteria that Amazon sets out in its HQ2 RFP, along with the data we pulled to quantify each one and why.
- Metropolitan areas with more than one million people: This is the easiest one to quantify, and we looked at population in millions, based on US Census Bureau via Wikipedia
- A stable and business-friendly environment: Let’s assume that business taxes are a reasonable proxy. We grabbed state/province business tax rankings from Tax Foundation and The Conference Board of Canada to measure the business climate in each metro area.
- Urban or suburban locations with the potential to attract and retain strong technical talent: This speaks to both education level as well as tech talent in each area. To rank these requirements, we looked at CBRE’s tech talent report and university degree attainment percentages from Brookings Metropolitan Policy Program via New York Times and Statistics Canada
- Communities that think big and creatively when considering locations and real estate options: This one is a little more outside the box and subjective. To get at this requirement we added home prices via data from National Association of Realtors and Canadian Real Estate Association and transit rankings from WalkScore.
Based on the data, here’s how the cities still standing in the HQ2 race rank. One caveat: we based our original analysis on metro areas, and some locations — like the three Washington, D.C.-area submissions and New York-New Jersey — are part of the same metro area. Continue reading for more analysis of those spots.
- Washington, D.C.
- New York
- Los Angeles
To be sure, some of our data-driven top picks from our first round of analysis in September didn’t make the cut. Four of our top 10 didn’t advance, and a few of Amazon’s top picks were on the bottom of our list.
Here is the complete data ranking of metro areas from September:
|Toronto, ON, Canada||5.93||11||6||9||56||3||17.0|
|Ottawa-Gatineau, ON, Canada||1.32||8||9||41||19||19.3|
|Atlanta-Sandy Springs-Roswell, GA||5.79||16||5||36||16||25||19.6|
|Montréal, QC, Canada||4.10||32||10||36||4||20.5|
|Vancouver, BC, Canada||2.46||18||14||8||57||6||20.6|
|Austin-Round Rock, TX||2.06||6||8||14||43||38||21.8|
|St. Louis, MO-IL||2.81||33||32||15||8||23||22.2|
|San Francisco-Oakland-Hayward, CA||4.68||3||1||48||58||2||22.4|
|New York-Newark-Jersey City, NY-NJ-PA||20.15||12||3||49||49||1||22.8|
|Calgary, AB, Canada||1.39||14||3||47||29||23.3|
|Minneapolis-St. Paul-Bloomington, MN-WI||3.55||9||16||46||34||12||23.4|
|Kansas City, MO-KS||2.10||24||26||15||14||45||24.8|
|Grand Rapids-Wyoming, MI||1.05||52||12||12||25.3|
|Salt Lake City, UT||1.19||38||21||9||42||27||27.4|
|Buffalo-Cheektowaga-Niagara Falls, NY||1.13||42||49||2||17||27.5|
|Dallas-Fort Worth-Arlington, TX||7.23||28||10||37||33||31||27.8|
|Houston-The Woodlands-Sugar Land, TX||6.77||41||28||14||23||34||28.0|
|Miami-Fort Lauderdale-West Palm Beach, FL||6.07||43||42||4||44||10||28.6|
|Tampa-St. Petersburg-Clearwater, FL||3.03||53||24||4||19||44||28.8|
|Hartford-West Hartford-East Hartford, CT||1.21||15||34||43||24||29.0|
|Milwaukee-Waukesha-West Allis, WI||1.57||26||35||39||28||18||29.2|
|Edmonton, AB, Canada||1.32||54||3||40||24||30.3|
|San Antonio-New Braunfels, TX||2.43||56||41||14||20||35||33.2|
|Las Vegas-Henderson-Paradise, NV||2.16||58||5||31||40||33.5|
|Los Angeles-Long Beach-Anaheim, CA||13.31||29||22||48||54||15||33.6|
|San Diego-Carlsbad, CA||3.32||19||17||48||55||33||34.4|
|San Jose-Sunnyvale-Santa Clara, CA||1.98||2||48||59||30||34.8|
|New Orleans-Metairie, LA||1.27||50||41||15||35.3|
|Oklahoma City, OK||1.37||46||44||31||4||52||35.4|
|Louisville/Jefferson County, KY-IN||1.28||55||34||11||46||36.5|
|Virginia Beach-Norfolk-Newport News, VA-NC||1.73||40||38||33||26||51||37.6|
|Riverside-San Bernardino-Ontario, CA||4.53||59||48||46||43||49.0|
One of the more surprising things to come out of the shortlist was the multiple locations in the same region bidding against one another. It is unclear how this will affect the final bidding process, but it’s easy to imagine respective mayors and other elected officials engaging in intra-regional competitions to offer more incentives and tax breaks.
In the Washington, D.C., region, three areas are under consideration: D.C. proper, Northern Virginia and Montgomery County in Maryland. All three of these areas share a few things in common. They all receive the bulk of their travelers from the region’s two main airports — Dulles and Ronald Reagan, both located in Virginia. The region’s subway system serves all three areas, with all routes leading into D.C.
But each area offers its own advantages. D.C., of course, is where all the political and economic action happens. Some have argued that Bezos — who quietly built an empire hiding in the rain-soaked shadows of Seattle — will need to elevate his persona as Amazon enters its next chapter, and D.C. is the place to do that. Bezos also owns The Washington Post, and he just bought a $23 million home in D.C.
Northern Virginia makes a lot of sense if the purpose of HQ2 is to eventually spin off Amazon Web Services. That area is well known as a data center hub, and Amazon last year announced plans to build a new East Coast campus in Northern Virginia. The area is also home to a huge hub for the U.S. Department of Defense and an abundance of cybersecurity talent, a must have as massive cyberattacks become increasingly more common.
Montgomery County in Maryland is the only county-level proposal to make the cut. Encompassing the northern suburbs of D.C., the area is home to a wealthy, well-educated population. Its top employers are also U.S. government agencies, and the region is also the headquarters for hotel giant Marriott, a plus if Amazon envisions hosting a lot of visitors from around the world at a Montgomery County HQ2.
In the New York-New Jersey cluster, Amazon is basically choosing between talent and tax incentives. Both areas draw from the same airports generally — La Guardia, JFK and Newark. Prior to the HQ2 response deadline, New Jersey publicized an offer of more than $7 billion in incentives that included significant property and wage tax breaks as well as subsidies for every job created.
New York City boasts the nation’s largest tech workforce outside of the San Francisco Bay Area. Amazon already has a significant presence in the Big Apple, and makes sense as a destination as the retail giant continues to dive deeper into fashion.