scorecardresearch Skip to main content

In the race for Amazon, does Boston stand a chance? founder and CEO Jeff Bezos.David Ryder/Getty Images

Amazon set off a frenzy Thursday in cities from coast to coast when it announced plans to spend $5 billion for a “second headquarters” somewhere in North America, with up to 50,000 jobs on a campus nearly as big as Kendall Square.

State and city officials, fresh from luring General Electric Co. to Boston, said they will put together an offer to Amazon, likely to be one of the biggest job-creation prizes in decades. Industry specialists and close followers of Amazon say Boston, where the e-commerce giant is expanding its already considerable presence to 1,900 employees, is likely a contender.

But the chances of winning this derby probably hinge on what, exactly, the company is looking for. The company gave cities and states one month to prepare an offer and listed a wide range of criteria that will go into its decision, expected sometime next year.


Massachusetts officials acknowledged they are likely to reprise the pitch that sold GE on Boston: a strong tech workforce, world-class universities, an innovative business community, and a package of subsidies that helped GE prepare its campus in the Fort Point neighborhood.

“I think [Amazon is] going to make the decision based on talent,” said Dan O’Connell, a former state development official who now heads the Massachusetts Competitive Partnership, a business lobbying group. “We shape up really well on talent.”

At the same time, though, Boston may be at a disadvantage on several other fronts. Amazon said its cost of doing business will be a “critical decision driver,” and the level of public aid will be a significant factor in its decision.

Boston is on the upper end of most metro areas for pricey office space and housing, and high wages. Moreover, Mayor Martin J. Walsh signaled that he is not going to offer lavish subsidies to win over Amazon.


“We are not going to get into a bidding war with another city over something like this,” Walsh said. “I think it would have to be, ‘Is Amazon the right fit for Boston, and is Boston the right fit for Amazon?’ ”

Boston was cited on the short lists of contenders put out by urban planners and real estate specialists Thursday.

Also included were Austin, Texas; Washington, D.C., where Amazon boss Jeff Bezos owns The Washington Post and is renovating a mansion; Denver; Pittsburgh; and Toronto.

A number of other big metro areas also quickly announced they would pursue the Amazon project, including Kansas City, Mo.; the Twin Cities of Minneapolis and St. Paul; and Dallas-Fort Worth.

Amazon said it expects to begin with a more modest presence that would balloon over one to two decades to 8 million square feet. That’s roughly how much real estate it occupies over 33 buildings in downtown Seattle, and is about 20 times the size of GE’s proposed $200 million Fort Point Channel campus.

Other important factors include direct access to public transit, a nearby international airport, and a good local highway system. If its past choices are any guide, Amazon prefers dense urban neighborhoods, not suburban office parks.

It also said the property may need to be as big as 100 acres. In a crowded city like Boston, there aren’t many places that fit the bill.

There are several big office complexes under development in downtown Boston, the Seaport, and Kendall Square that may offer Amazon a starting point. But even those may prove not nearly big enough for Amazon’s ambitions.


The sprawling NorthPoint development in Cambridge is another possibility, while Widett Circle, part of the ill-fated Boston Olympics bid, is still in the planning stages and may not be available in time to meet Amazon’s schedule to begin construction in 2019.

Farther out are Reebok’s former headquarters in Canton and the huge Union Point development in South Weymouth, but they may be too far from the action, and the workforce, in Boston.

“It’s a daunting challenge,” said Tom Hynes, chief executive of the Boston office of Colliers International, a real estate firm. “There aren’t too many large sites, but maybe you could put some together that could make this work.”

Then there’s the cost of living. Boston’s housing prices rival Seattle’s and rank among the highest in the country.

And wages tend to be high. If Amazon wants to save money, it may look at lower-cost cities, especially in states where it can get a large package of tax breaks, said James Thomson, a former Amazon executive who follows the company closely.

“I think it’s going to be somewhere reasonably close to some technology universities, and somewhere a lot more affordable,” Thomson said. “Some city that isn’t known for being a tech hub but that’s ready to roll out the red carpet.”

At stake is an enormous economic development prize.

In Seattle, where Amazon has about 40,000 employees, the company has spent $3.7 billion since 2010 assembling the biggest urban office campus in the country.


The company has almost single-handedly transformed a rundown stretch of downtown, said Svenja Gudell, chief economist at the Seattle-based real estate website Zillow.

“You wouldn’t recognize the place from even five years ago,” she said. “There’s new office buildings, apartment buildings, restaurants. It’s really Amazon Town down there.”

And their wages — $25.7 billion over the last seven years, the company says — have supercharged Seattle’s economy. Housing prices climbed 13 percent last year, Gudell said. Rents have surged, too. The costs have come in noticeably increased traffic and concerns that nontech workers are being priced out of many Seattle-area neighborhoods.

“It hasn’t been easy to accommodate all the growth around here,” Gudell said.

Some here worry that Boston, with its already expensive housing, strained roads and rails, and a labor shortage in the very white-collar jobs that Amazon intends to add, could not accommodate an addition of that size.

“That’s what I would worry about, the capacity from an infrastructure perspective,” said Leon Nicholas, an analyst with Kantar Retail in Boston. “Even if all these folks decide they’re going to get swanky condos in Boston, the T can’t handle another 50,000 people. We break down when the temperature drops.”

On a project of this size, every city will have pros and cons.

Amazon says it will consider “community fit” and “support for a diverse population,” leading some to wonder if conservative social policies could count against Texas and North Carolina.


And the need for an international airport could be a strike against Midwestern cities.

“Some of the criteria Amazon has listed work in Boston’s favor. Some might work against,” said Jed Kolko, chief economist at the jobs website “We really won’t know which ones are most important until they choose.”

James Vaznis of the Globe staff contributed to this report.