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What Sunk Detroit's Shot at Amazon, Concerns Over Education, Transportation, or Outdated Market Image?

Progress Cited in Attracting Several Other Major Companies, Including Google, LinkedIn and Microsoft
January 29, 2018
As Amazon’s short list of possible second headquarter locations emerged, one major up-and-coming city was noticeably absent from the list. Despite Detroit’s ample new construction, recent migration of major employers to the area, and access to neighboring Canada, the Motor City did not land a spot on the list of potential contenders.

So where exactly did the metro fall short?

According to local reports, Amazon officials cited a lack of mass transit options, education shortcomings and an insufficient talent pool in discussions with Detroit officials.

While the region's existing transit infrastructure has been considered among the worst in the country for over two decades, improvements have been made in recent years, including putting more buses on the road and adding the initial span of the Qline. But with the new streetcar service spanning just over three miles, the city still has a long way to go.

Mass transit has been noted as an important factor for the e-commerce behemoth, evident in the fact that almost all of the 20 possible locations have sound internal transportation.

Another reported knock on the market in locking a possible spot for Amazon was its local education system, which pales in comparison to some of the top 20 contenders. Detroit was on the lower end of cities vying for the bid in regards to the portion of its existing population that had a bachelor’s degree or higher.

While the city is seeing an increase in the number of engineers and other professionals with graduate degrees in the area as a result of its tech growth, the region lacks a strong primary education system. Michigan test scores are towards the bottom compared to the rest of the country. For Amazon, it was important to seek out cities where employees would feel comfortable moving and enrolling their children into existing schools.

However, local businessman and city champion Dan Gilbert, CEO of Quicken Loans and other ventures, said the real reason Detroit missed the cut was due to a lingering but inaccurate reputation of Detroit as a dilapidated city.

In an open letter penned by Gilbert, he said he believes the city’s deeply rooted reputation served as the metaphorical "nail in the coffin" that resulted in Amazon passing it over.

Gilbert cited the city's recent accomplishments, including a marked reduction in crime, infrastructure improvements and a garnering of talent from outside states, but said those factors were insufficient in shaking the reputation of a city that went through the largest municipal bankruptcy five years ago.

In the end, Detroit residents are not discouraged but determined to continue repairing the city and ultimately its reputation. Though Detroit did not make the list of potential locations, the city has much to offer with its vibrant downtown, proximity to neighboring Canada and concerted efforts in improving safety and existing infrastructure, which has already attracted several other major companies, such as Google, LinkedIn and Microsoft.

Those advantages were not enough to win over Amazon as it narrowed its list of cities meeting the specific criterion for its second headquarters.

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