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Potential for Backlash Mounts as Amazon HQ2 Fatigue Sets In

‘Radio Silence’ From Amazon to Finalist Cities Competing for Online Retailer's Second Headquarters
September 21, 2018
Even though Amazon said it wants its second headquarters to be about the same size as its Seattle campus (pictured), some say the company’s drawn-out process may lead to backlash.



As online retailer Amazon’s search for a second headquarters location stretches into its second year, impatience and fatigue over the drawn-out process is starting to show.

John Boyd, a corporate relocation consultant, said Amazon risks damaging its reputation if the search drags on much longer.

Developers across the country are sitting on prime real estate awaiting Amazon’s decision and cannot "go full-throttle in their prospecting and marketing efforts," said Boyd, who has been a corporate site-selection specialist since 1975. "We are starting to hear a backlash, and cities are saying, ‘at least let us know if we’re not a serious contender.’ There’s been radio silence from Amazon to all 20 finalist cities."

 Read More CoStar Amazon HQ2 Coverage 

Amazon's founder, chairman and chief executive, Jeffrey P. Bezos, announced the company’s search for a second headquarters location on Sept. 7, 2017. The Seattle-based company narrowed the original 238 applicants to 20 in January. Amazon has said it plans to invest $5 billion in the winning city and create 50,000 jobs paying an average of $100,000 annually.

Speculation has run wild for months over the timing of the company’s decision. Most recently, some were convinced Bezos would announce the decision last week at an economic conference in Washington, D.C. He did not.

Steve Schoeny, economic development director for finalist city Columbus, Ohio, said he has heard little from Amazon since company officials visited last spring, which is keeping an entire region waiting for any scrap of information, no matter how small.

"If we don’t get it, we’ll go back to blocking and tackling and making sure we have the workforce that employers are looking for," he said.

Boyd predicts the company might wait to announce its selection until after the mid-term elections for Congress in early November for political reasons. He also said Amazon would be taking a risk if it narrows the list to a handful of cities rather than choosing one winner.

"The downside is those final three or five cities could call emergency legislative sessions to increase incentives packages, and the idea of corporate welfare, that narrative is getting some legs," he said. "There’s a risk of a PR backlash the longer this does play out."

Jim Beatty, founder of NCS International, an Omaha, Nebraska-based site-selection consulting firm, said everything about Amazon’s very public search is unusual, which poses benefits in added attention but also the potential for negative public relations.

"Companies normally do this kind of thing in private," he said.

Boyd said Amazon's image may get worse the longer it delays its HQ2 announcement.

Amazon declined to comment beyond saying the company remains committed to making a decision before the end of 2018.

Last January, non-profit research institute Policy Matters Ohio released a study saying that almost 30 percent of Amazon’s more than 6,000 workers in the state at the time were receiving public assistance. More recently, Vermont Sen. Bernie Sanders’ introduced legislation called the "BEZOS Act," which would require employers to pay the costs for workers who need federal assistance.

Even Bezos’ pledge this month to give $2 billion to help ease homelessness and provide early-childhood education to low-income children was met with skepticism, Boyd added.

"There is this idea Amazon could do a better job with community servicing, and providing more feedback, “he said. "I think that’s an important part of the story here."
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