Amazon set off a feeding frenzy Thursday with word that it is scouring North America for a second headquarters that could eventually employ up to 50,000 people.
But the Seattle-based company set demands for its “transformational” project that suggest Amazon wants to be in the driver’s seat of this deal.
Among Amazon’s demands for its second headquarters:
• Must be 45 minutes from an international airport.
• Should have “on-site, direct access” to mass transit (rail, train, subway, metro and bus).
• Must be 30 miles to a “significant population center” to meet needs for highly educated labor pool, especially with high-tech backgrounds.
• Requires an existing building of up to 500,000 square feet or about 100 acres of “greenfield” space free and clear of any development obstacles for new buildings.
And it wants public money, lots of it.
“Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision,’’ Amazon said in an eight-page request for proposal on its website.
Communities must apply by Oct. 19.
Those demands did not stop a flurry of calls, meetings and planning sessions at mid- to large-size cities – including Buffalo.
“We’re going to try to get everyone to try to work together on behalf of the whole region to put together a competitive proposal,” said Thomas Kucharski, CEO of Invest Buffalo Niagara, formerly Buffalo Niagara Enterprise. “We’re taking it very seriously."
Added Brian McMahon, president of the New York State Economic Development Council: “I think Buffalo certainly can compete for a project like this.”
But Amazon has one other “high priority”: It wants to locate in a state and locality with a “stable and business-friendly environment and tax structure.’’
That one line gave some economic development advocates in New York great pause.
“It puts New York at an incredible disadvantage,’’ said Greg Biryla, executive director of Unshackle Upstate, a business group.
He noted annual surveys from various groups that show New York down on the list as business-friendly places in which to operate.
While New York has dropped corporate tax rates, the state still has a reputation for high property and payroll taxes and stiff regulations.
“New York State, and upstate New York in particular, is not an attractive place to do business. It’s a sad reality that we have to deal with every day,’’ Biryla said.
A sizable portion of Amazon’s RFP addresses financial incentives. By next month, applicants are expected to provide “a summary of total incentives offered for the project,’’ as well as the timing of those payments or tax breaks, availability of free or reduced-cost land and a breakdown of what financial incentives require approval by legislative bodies.
It also wants to know about “claw backs,’’ which are methods by which economic development incentives are paid back to the government when companies do not meet job creation goals.
“This company is making no secret that it wants to throw money at them. If there’s one thing that Cuomo is good at, it’s throwing money at tech companies,’’ said E.J. McMahon, president of the Empire Center for Public Policy, a fiscal watchdog group.
Earlier this week, Gov. Andrew M. Cuomo announced Amazon will open a $100 million distribution center on Staten Island. The deal, expected to include 2,250 new jobs, included $18 million in state tax credits.
In a prepared statement, Howard Zemsky, who heads the state’s lead economic development agency, offered some optimism.
“Amazon, with its significant footprint in New York State, knows firsthand that we have the infrastructure, business climate and workforce necessary for businesses to succeed,’’ Zemsky stated.
He declined an interview request, and his statement did not identify what areas the agency would pitch to lure Amazon.
“This project is a major opportunity and New Yorkers should know that we will be doing everything we can to attract Amazon HQ2 – and 50,000 jobs – to the Empire State," Zemsky's statement said.
Buffalo does stand up well on some of the Amazon demands.
The company wants to locate its second headquarters in a community with at least 1 million people. In New York, that leaves New York City, its suburbs and Buffalo on the list.
E.J. McMahon said he doubts, given cost reasons, that Amazon would choose New York City.
And local officials would “move mountains” to get Amazon, he said.
“It has major urban-area aspirations without an employer like this," McMahon said of Buffalo.
Buffalo meets another important condition set by Amazon: the ability to create an urban or downtown campus.
In Seattle, its headquarters takes up 8.1 million-square-feet in 33 buildings that employ 40,000 or so employees.
“In Buffalo, Amazon could have a Seattle-sized downtown footprint at a cut-rate price, compared to most other places in the running,’’ McMahon said.
But he believes other communities would beat out Buffalo when it comes to major universities, especially with access to a large high-tech talent pool. Amazon, based on its RFP, would likely select Toronto or Boston over Buffalo, he said.
The Amazon RFP also gives “important consideration” to communities with an international airport and “daily direct” flights to Seattle, New York, San Francisco, and Washington, D.C.
That presents challenges for Buffalo. Despite the fact that the local airport contains the word “international” in its name, it now offers only once-a-week seasonal flights from mid-February to May to Cancun and Punta Cana.
Nonetheless, local political and business leaders insist they are up for the challenge.
“Twenty years ago, if a company made this offer, we wouldn’t have even bid on it because we didn’t think we could compete with other areas of the country,” Erie County Executive Mark C. Poloncarz said. “I know we can today, and you see the success stories dot the landscape of upstate and Western New York.”
Dottie Gallagher-Cohen, president of the Buffalo Niagara Partnership, also said her group is interested.
“We’ve got several competitive advantages, and we’ve got disadvantages,” she said. “It depends what the total package looks like and whether our plan is the most compelling.”
Buffalo will face stiff competition if it enters the challenge.
Despite the company’s tough demands, state and local officials risk political fallout for not pressing for the Amazon deal, said Jeff Finkle, president of the Washington-based International Economic Development Council. The council's members work for public and private economic development entities that compete for deals such as Amazon’s.
Word of Amazon's second headquarters project spread through local media outlets across North America.
“Pittsburgh ready to make push to bring home new Amazon headquarters,’’ said a headline in the Pittsburgh Post-Gazette.
“Where could Amazon fit 50,000 workers if it comes to Boston?’’ said another in the Boston Globe.
One tech industry media outlet, VentureBeat, was among several to list the cities that likely will be, or should be, in the running: Austin, Detroit, Pittsburgh, Columbus and Salt Lake City.
Amazon’s hometown paper, the Seattle Times, had its own list of potential cities: Boston, Denver, New York, Pittsburgh, San Francisco and Toronto.