Houston has joined the contest to land Amazon’s second headquarters.
The online retailer Amazon announced in September it is looking to make a $5 billion capital investment to create 50,000 jobs across 8.1 million square feet of office space. The Seattle-based company has since accepted proposals from more than 230 cities and metro areas.
The Houston proposal was submitted ahead of the Oct. 19 deadline with help from the Greater Houston Partnership, an organization dedicated to promoting the Greater Houston area as a place to work, live and run businesses. Here are 5 things to know about the proposal and what happens next.
1. The general area suggested for the headquarters is being referred to as the “Innovation Corridor.”
The area follows along a four-mile stretch of the METRO rail line from downtown Houston to the Texas Medical Center. The boundaries of its width are not specifically defined, but GHP President Bob Harvey said it stretches roughly from the Montrose area east to the third ward and the University of Houston.
In addition to the University of Houston and the Medical Center, several other notable institutions and landmarks fall within the area, including Rice University, Houston’s Museum District and Hermann Park. The Montrose and Midtown areas are also known for their quality of life perks, including an abundance of trendy restaurants and bars, Harvey said.
“There was a growing recognition that this area represents a very unique asset of Houston,” Harvey said. “When you look at all the attributes and assets that fall within this relatively modest area, it had virtually, if not entirely, everything that Amazon was looking for.”
2. Houston wants to use its strength in more traditional industries to appeal to Amazon’s desire to bring digital disruption and new thinking.
One benefit specific to the Houston area is that Amazon would have access to existing talent in some of the strong and vibrant industries that Houston is known for, Harvey said, including energy, health care and even the space program NASA.
He said a location in Houston would give Amazon—which has recently made moves to enter the entertainment and grocery industries—the opportunity to bring digital thinking into some of these other more traditional industries.
“Amazon is fundamentally a company that is all about disruption,” Harvey said. “While Amazon has always been a retail distributor, we believe—and there is evidence to suggest—they are moving into more traditional industries.”
Harvey said Houston’s proposal included a letter signed by around 60 business leaders welcoming Amazon to the Houston area as a disruptive force. Meanwhile, he said Amazon would benefit from having the access to the local talent and expertise.
“This was really to drive home the point to Amazon that Houston will welcome them and their disruptive thinking into our industries to make them more competitive and advance them,” Harvey said. “Houston is the ideal city for that to occur. We’ve always tried to innovate in our core industries; we just need to marry that type of innovation with this new digital form.”
3. Other benefits of building in Houston that were promoted in the proposal include the diverse workforce, quality of life and large pool of computer engineers and programmers.
Houston, recognized as the most diverse city in the U.S., will appeal to Amazon, which Harvey said is trying to attract a more diverse and more millennial workforce. He also said Houston provides a good balance between being affordable and still providing a good quality of life through art, sports, restaurants, bars and entertainment.
Although Austin has a more highly-concentrated pool of computer software talent—including computer engineers and programmers—Harvey said Houston has a larger pool. He said the business climate in general is very pro-growth.
“All of the locally elected officials are favorable to business growth,” he said. “We just don’t put barriers in Houston on businesses attempting to grow.”
4. Moody Analytics ranked Houston 52nd among cities competing for the headquarters, but GHP officials believe those rankings are not going to influence Amazon’s decision.
The analysis by Moody Analytics—a subsidiary of Moody’s Corporation that conducts economic research—came up with its ranking by looking at several factors, including mass transit, quality of life and workforce diversity. The Austin/Round Rock area was ranked No. 1. The Houston area was ranked particularly low in quality of life and transit.
Harvey said because the analysis was based on aggregate data for the metropolitan statistical area, it does not appreciate many of the benefits Houston has to offer. He said he does not expect the rankings to play into Amazon’s ultimate decision.
“Does quality of life matter? Absolutely, but it’s almost silly to think Amazon will choose a city based on restaurants per capita,” Harvey said. “This is not a frivolous company. This is a business, and it’s all about thinking in the long-term and creating a whole new model of how things operate.”
5. Amazon officials said the process of evaluating the more than 230 proposals they have received is expected to last through the spring of 2018.
Since the deadline to submit proposals passed on Oct. 19, Amazon has not provided any updates on what will happen next aside from that a decision will be made sometime in 2018. Harvey said there will realistically be a point where Amazon narrows down its more than 230 proposals to a group of finalists, but there is no telling if or when that could happen.