Boston begins work on preparing Amazon bid
Facing an Oct. 19 deadline for bids, state and local officials are starting to plot strategies to persuade Amazon.com Inc. to build a huge corporate campus in the region.
The Baker administration says it will work with cities and towns, developers, and others to present a “convincing argument” for Amazon to come to Massachusetts. Top aides to Mayor Martin J. Walsh said they have begun formulating a pitch and assessing potential sites in Boston. Local tech executives and higher-education leaders have reached out to offer help, said John Barros, the city’s chief of economic development.
At stake is one of the biggest economic development prizes in recent memory: a “second headquarters” for one of the world’s most innovative companies, in a campus nearly the size of Kendall Square that could eventually employ 50,000 workers. Amazon, which is based in Seattle, kicked off a high-profile contest Thursday morning by inviting regions across North America to propose sites, and dozens of cities from coast to coast have jumped in.
“This conversation seems to be going on in every city in America at this point,” said James Rooney, chief executive of the Greater Boston Chamber of Commerce.
Most outside observers say Boston has a decent shot, with its focus on innovation, abundance of tech-savvy workers, and access to top universities — qualities that helped lure GE’s world headquarters last year. But the region is crowded and costly, with few sites obviously big enough to fit what Amazon says it needs. And if it comes down to a tax-break bidding war, most expect Massachusetts will be outspent by deeper-pocketed rivals hungry for the jobs.
Other cities considered contenders include Austin, Texas; Denver; Washington, D.C.; and Pittsburgh.
Developers with sites that might fit Amazon’s needs were wasting no time. Several have already called state officials and City Hall to tout their projects, including The Abbey Group, which is planning a 1.5-million-square-foot office campus at the old Flower Exchange in the South End.
Sites further from the core of the city have their assets, too, said developer Kyle Corkum, like the old South Weymouth Naval Air Station, which his firm, LStar Ventures, is turning into a giant complex of office space and housing. It’s just 15 miles from South Station, and has more than 100 acres to spare.
All the jockeying highlights how much guesswork will have to go into Massachusetts’ pitch. Amazon’s eight-page request for proposals lays out a wide range of priorities and “decision drivers,” from a 100-acre campus to good transit access. It allows for projects in a city or the suburbs, existing buildings or development sites. It urges just one proposal per metro area, but says that proposal could include multiple sites, in different cities or towns.
In a region where few, if any, sites will check all Amazon’s boxes, the state may need to pick one or two on which to focus its energies, said Matthew Kiefer, a veteran development attorney at Goulston & Stoors. But that has risks too.
“The danger with picking a site is you guess wrong, and you’re hanging your bid on one site,” he said. “It might be smarter to tell Amazon, ‘We’ll work with you on a site selection process.’ ”
But that takes time, and Amazon says it wants to open in 2019. And it could get messy, especially given Boston’s lengthy, sometimes contentious permitting process. Whatever the answer, a successful bid will probably require the region’s sometimes rivalrous development community to stay on the same page, said Susan Houston, executive director of MassEcon, which works to attract business to the state.
“It’s going to take a creative real estate solution,” she said. “That’s where we need to kind of dig deep.”
State and local officials may also need to dig deep on tax breaks and other incentives to lower Amazon’s cost of doing business here. Experts say a project of this scale could lead some states to offer billions of dollars in tax breaks in their bids to lure Amazon.
Massachusetts has never done that.
The $145 million in aid the city and state offered GE to move its headquarters to Boston last year was the biggest incentive package in state history, though it was far less than what chief rival New York offered, and came mostly in subsidies for real estate and roadwork, not the direct cash or tax breaks many companies prefer.