As cities across the country make their pitch to lure Amazon's coveted second headquarters, Western New York development officials are betting the region's lower costs and solid quality of life can outweigh the growth and glitz of bigger markets.
With a joint proposal for the Buffalo and Rochester markets set to arrive at Amazon's Seattle headquarters today, local development and business officials think they have crafted a bid that gives the region a fighting chance at winning the nationwide competition among upward of 50 other cities for the 50,000 jobs that the online retailer has promised to bring to the winning area.
It will be one of four bids from New York State.
Howard Zemsky, the Cuomo administration’s top economic official, said New York is submitting bids for four regions: Western New York including Buffalo and Rochester; Syracuse and the central Mohawk area; the greater Albany area; and downstate, which includes New York City, Long Island and Westchester County.
Zemsky said the state has provided Amazon with a separate package that includes a list of financial incentives, likely to include tax credits and grants, paid for by the state. He said the state has “explicitly communicated” with Amazon that the Cuomo administration’s financial offer applies equally to all four of the bidding regions.
Citing competition with other states, Zemsky declined to reveal the size of the financial proposal.
“I would use the terms 'competitive, compelling and sensible,’ " Zemsky said of the New York incentives.
Chance to 'remake' economy
While some of the business officials who helped craft the bid from Buffalo and Rochester admit the proposal is a long-shot, they also hope that Amazon picking Western New York as its second headquarters would inject a huge jolt of energy into the economy.
"A project like this, with 50,000 jobs, will remake the economy for this part of the state," said Thomas A. Kucharski, the president of Invest Buffalo Niagara, which crafted the proposal in concert with Greater Rochester Enterprise.
For the winner, there will be benefits far beyond Amazon, as new businesses sprout up to provide services and supplies and the influx of good-paying jobs fuels greater consumer spending.
"There will be whole industries and businesses that will form around it, and that will create even more opportunities," said David Anderson, the CEO of health insurer HealthNow New York.
Exactly what's in the Western New York proposal is a closely kept secret. Local officials say they have identified four potential sites – two in Buffalo and two in Rochester – for the Amazon headquarters, but aren't saying where.
Regardless, the competition for Amazon will be fierce.
Big tax breaks expected
New Jersey officials on Monday said they were dangling a package of tax breaks worth $7 billion – or $140,000 for each job Amazon is promising – behind a proposal to bring Amazon's second headquarters to Newark.
Other cities have taken offbeat approaches to try to catch Amazon's attention. A Tuscon, Ariz., economic development group tried to give a 21-foot tall saguaro cactus to Amazon CEO Jeff Bezos. City officials in Birmingham, Ala., placed giant Amazon boxes around town. New York City on Wednesday night planned to light up several of its buildings and landmarks – including the Empire State Building, One World Trade and Times Square billboards – in "Amazon orange."
New York City has placed on many lists created by real estate, economic development and media outlets as one of the possible frontrunners Amazon might select.
“We’re going to work very hard at it,’’ New York Mayor Bill de Blasio told reporters late last month. He said his office already has started to arrange meetings between the mayor and Amazon executives and that the city was going to show Amazon sites that could be used as a single campus or spread out in several areas.
On Long Island, Suffolk County Executive Steve Bellone and Nassau County Executive Edward P. Mangano have said they will propose to Amazon three sites – on the grounds of a former state psychiatric hospital, at a thoroughbred racetrack and 600 acres at an airport.
North of New York, Westchester County Executive Rob Astorino, the 2014 Republican challenger to Gov. Andrew Cuomo, is pitching its workforce supply, large suburban tracts of land and proximity to airports, mass transit and Manhattan.
“We match up very well with what they have put forward as requirements,’’ Astorino said.
Zemsky declined to say if the offer from New York State is anywhere approaching the $7 billion thrown Amazon’s way by New Jersey. Though important, Zemsky believes the financial offers will “not be determinant in Amazon’s decision.”
“Amazon is looking to place 50,000 people making over $100,000 on average. They are a company that has prided itself on making good, long-term decisions,’’ he said
But not every big city is bending over backward for Amazon. Officials in San Antonio, Texas, bowed out of the competition.
"Blindly giving away the farm isn't our style," San Antonio leaders wrote in a letter last week to Bezos.
Joint proposal bulks up bid
Local officials said the Western New York bid highlights the bulked-up assets a combined Buffalo-Rochester bid brings to the table.
Amazon has said it wants a metropolitan area with at least 1 million people, and the combined Buffalo-Rochester area has more than 2.2 million residents.
It also wants access to a highly educated labor pool and to be located near a strong university system – something that a joint proposal would better meet by combining universities such as the University at Buffalo with resources from the University of Rochester and the Rochester Institute of Technology, along with more than 60 other colleges and universities. The company also wants to be in a place where it can attract top technical talent and offers a wide array of recreational and educational opportunities.
It wants an initial building of 500,000 square feet on a location that could eventually accommodate 8 million square feet of office space. It also wants access to major highways, mass transit and to be near an international airport with nonstop flights to cities like Seattle, Washington, D.C., and New York City.
"We have enough existing infrastructure," Kucharski said. "We could accommodate it pretty easily, while other regions will have to build roads and expand their airports."
While Amazon said the jobs at its second headquarters would pay an average of $100,000, the region's lower cost of living could be a selling point because many of the jobs will pay middle-income wages that will go farther here.
"It's one of our biggest strengths that we're affordable," Anderson said.
But the Buffalo-Rochester bid also faces hurdles. Amazon wants to be in an area with a “stable” economy that is “business friendly” at a time when job growth between the two cities has stagnated and the Washington-based Tax Foundation placed New York State as second worst in the nation for its business tax climate.
One of the biggest hurdles the Buffalo-Rochester bid faces is convincing Amazon that the two-city region, despite its stagnant population and shrinking labor force, can provide enough workers to fill the 50,000 jobs the company said it could create within 10 to 15 years.
To do that will require a combination of developing a bigger workforce, partly by getting the region's college students to stick around after graduation, and partly by providing the kind of good-paying jobs that can convince people to move to Western New York.
Jamie Obletz, a Buffalo area native who spent 10 years in New York City before moving back last year to take a job as a vice president at Delaware North Cos., said the region's strong quality of life and its relatively low cost of living can be a strong magnet for a mid-sized city that also offers the professional sports, art galleries and cultural attractions.
"I'm a very, very micro example of how this can work," said Obletz, who worked with local development officials to craft the joint bid.
Even if the Buffalo-Rochester bid fails, the region still can learn from the collaboration between economic development officials from Buffalo and Rochester, said William Maggio, the president of Buffalo medical firm Immco Diagnostics and the chairman of the 43North business plan competition.
"Any time Upstate New York unifies itself, that's a good thing," said Maggio. "The reality is that we can't do it on our own."