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Why people say Amazon will choose KC, why it won’t, and why the dream could backfire

How much office space does Amazon require for its second U.S. headquarters?

Kansas City leaders plan on making a hard push to attract Amazon's attention as it looks for a city to build a second U.S. headquarters. The venture could employ 50,000 people and would need massive amounts of office space.
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Kansas City leaders plan on making a hard push to attract Amazon's attention as it looks for a city to build a second U.S. headquarters. The venture could employ 50,000 people and would need massive amounts of office space.

Late last week, Kansas City Mayor Sly James tweeted that the city will compete for the mega-deal of landing Amazon’s second headquarters and its accompanying $5 billion investment and 50,000 jobs created over the next two decades.

Much speculation has resulted since James’ tweet. Some have written that Kansas City can put together a legitimate bid to entreat Amazon to the City of Fountains. But others have already written KC off.

Still more have written that pursuing Amazon, if not done prudently, could actually have adverse effects on the city.

Overland Park Mayor Carl Gerlach jumped into the Amazon sweepstakes, saying in a statement that the metro area “easily exceeds the demands of what Amazon is looking for.”

“I truly believe that working through the Kansas City Area Development Council, and our two-state and multiple local government representatives, this area provides an exceptional opportunities that makes us a viable, competitive and attractive prospect for Amazon,” Gerlach said.

PC Magazine, which writes about computer and internet-related products, named KC as its favorite candidate to land the tech giant. The outlet called KC “possibly the nation’s most underrated tech hub.”

KC City Manager Troy Schulte said in a news release that the city’s workforce and relatively low cost of living make it “attractive to any national company.”

The news release also stated KC has multiple sites large enough to accommodate Amazon, which as part of its requirements lists urban or suburban locations with potential to retain “strong technical talent.”

The city did not list where exactly the potential sites are located.

All the effort may be fruitless, though, if a New York Times analysis holds true. The Times analyzed the eight-page guidebook issued by Amazon and compared it with data from 50 metro areas in the U.S.

In a series of eliminations, more and more cities were deemed unqualified by The Times until only Denver remained. Kansas City did not even survive the first cut, which eliminated about half of the cities based on past job growth. The 25 metro areas that survived this first cut had the best growth in the past decade, The Times wrote, based on the Bureau of Labor Statistics.

But it might not be such a terrible thing if KC doesn’t land Amazon, according to some. Nick Bowden, a Kansas Citian who writes about city planning, recently argued that pursuing Amazon is akin to hunting for a winning Powerball ticket.

“Powerball jackpots are certainly one way to build wealth, however, I don’t know of many people whose primary strategy for obtaining wealth is buying Powerball tickets,” he wrote.

He added that any winning bid from a city will require a multibillion-dollar incentive package that could hamper the city. And if KC isn’t selected, hundreds of hours of work will be wasted in the pursuit.

Axios expanded on the downside to landing Amazon as it relates to tax breaks.

“A high price tag could hurt Amazon itself if it undercuts a locality’s ability to fund good public schools, hospitals and infrastructure, the building blocks of both a successful business environment and the high quality of life that attracts and keeps solid employees,” the outlet wrote.

A May report from the Pew Charitable Trusts found that while Missouri has “provided valuable analysis of program design and administration, they do not rigorously measure the economic impact of incentives.”

However, the report commended Missouri Auditor Nicole Galloway for excelling at evaluating and improving incentive programs.

Max Londberg: 816-234-4378, @MaxLondberg

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