So I was wrong. Amazon didn’t pick Toronto for HQ2. It instead picked Crystal City, Virginia (Washington) and Long Island City, NY (New York City). More on that, here, in the NY Times. Confession: My prognostication was at least partially about trying to create a self-fulfilling prophecy.
In any event, it’s interesting to consider the locations that they did pick – as well as the fact that they ended up picking multiple cities. This was not part of their RFP. Though, many have convincingly argued that this process was over before it even began. HQ2 was always going to end up on the east coast, near one of Bezos’ homes.
Nevertheless, urbanists such as Aaron Renn took the announcement as a direct repudiation of the American heartland. He believed that Amazon would be far more cost conscious in their decision making and ultimately elect for a lower cost locale in the middle of the country. Instead, the coastal hegemony won out.
Joe Cortright of City Observatory correctly predicted that Amazon would, for a few reasons, parlay their HQ2 search into multiple smaller locations (HQ2, HQ3, and so on). One of the reasons for this is that it gives the company more leverage when it comes negotiating subsidies on a go-forward basis. If NYC doesn’t want our next round of hires, we’ll take them to Washington.
Looking at the locations, one of the first things I noticed is that both are just outside of their respective “downtowns” (across a body of water), as well as adjacent or on the way to an international airport. Crystal City is across the street from DCA and Long Island City is a 15 minute drive from LGA. Both are situated on top of higher order transit. Makes sense to me.
Now, who wants HQ4?
Dan Doctoroff, the CEO of Sidewalk Labs (and the former deputy mayor of New York City), was recently interviewed by BNN Bloomberg about the company’s plans and ambitions for Quayside here in Toronto.
He talks about the project; their interest in timber construction; how the company, Sidewalk Labs, might ultimately make money; and how their mission is to create a global hub for urban innovation.
This last point is, of course, the most exciting opportunity – both for Sidewalk Labs/Alphabet and for Toronto. And it’s why many people believe that Quayside will end up a far greater (economic development) coup compared to HQ2.
The interview is only 10 minutes. If you can’t see it embedded below, click here.
Dan Gilbert – billionaire Detroit promoter and owner of the Cleveland Cavaliers – penned this statement in response to the city’s failed Amazon HQ2 bid. He chalked up the loss to reputational hangover:
We are still dealing with the unique radioactive-like reputational fallout of 50-60 years of economic decline, disinvestment, municipal bankruptcy, and all of the other associated negative consequences of that extraordinarily long period of time.
This was the “elephant in the room”, though his statement is primarily centered around both talent and transportation – the two critical and lacking ingredients that allegedly disqualified Detroit.
He ends by stressing the importance of physically visiting Detroit 2018. That is the only way, he says, people will fully appreciate the change and momentum that has taken hold in the city. (I experienced Detroit 2016 so I guess I’m overdue.)
In response to this, Aaron Renn wrote this follow-up post suggesting that Dan take a page out of Tony Hsieh’s playbook. Tony is the founder of Zappos and the Downtown Project in Las Vegas.
To bring people to downtown Las Vegas, Tony – somewhat famously – rented 50 apartments in one of the only high-rises, called them “crash pads”, and offered them out for free to people who wanted to come and check out what was happening in downtown Vegas and with the Downtown Project.
That’s certainly one way to lower the friction.
Equally interesting to me about this strategy, though, is that it was presumably necessary (he did it, right?) just to bring people to another part of Vegas, let alone another city altogether.
Full disclosure, I’ve never been to Vegas. But I understand that many people visit the place. So for me it speaks to the kinds of inducements that may be necessary just to revive or kickstart a place.
Photo by Matthew Brzozowski on Unsplash