Amazon’s announcement that it will seek proposals to house its second North American corporate headquarters presents a daunting opportunity and challenge to cities hoping to land the new headquarters. But Boston has what Amazon needs and is looking for — intellectual capital and talent.
The scope and depth of this
$5 billion project is unprecedented in corporate history. The headquarters would bring up to 50,000 jobs in eight million square feet of facilities over a 10-to-15 year period.
Amazon is a company at the cutting edge of today’s technology and economy, with a workforce of 165,000 employees, total current assets of $45.8 billion, a market cap of $474.41 billion, and $19.3 billion in cash and cash equivalents on its balance sheet.
On the surface, one might say this in an unrealistic pursuit for a Boston or Cambridge scenario or anywhere in Massachusetts. There are legions of reasons why it would not work: traffic, increased pressure on an already strained housing stock, inadequate infrastructure, the T with seven billion dollars of deferred maintenance, taxes. Many of these critiques are well founded and in need of resolution if the region is to grow and prosper along all economic strata with or without Amazon.
But we should be mindful that the only constant is change, and we are in a global competitive market. Titans of the 1970s like Digital Equipment Corporation, Wang, Polaroid, and Stone & Webster are distant memories to the senior set and have zero recognition with the current generation. In their prime they employed many thousands of people locally and globally. Each failed to keep pace with technology and innovation, and ultimately filed for bankruptcy or were sold off to other companies. All the major Boston banks were merged or absorbed in the banking consolidation of the ’90s.
A more current example of negative change was the acquisition of Gillette by Procter & Gamble, resulting in the loss of the headquarters in Boston, which occupied 500,000 square feet at the Prudential, coincidentally, the same amount of space Amazon will need in phase one of its plans.
This is all in the past; we are a different economy today.
As evidence of its confidence in the future of the region, MIT has invested $750 million to redevelop the Volpe Transportation Center into a mixed-use site. Other companies are a testament to our new economy: Novartis, Akamai, Biogen, LogMeIn, New Balance, and Trip Advisor, to name just a few.
We owe it to ourselves to seize the day. Amazon already has 1,000 employees in Greater Boston. Other regions can offer free land, low state and local taxes, and better weather. That is not us.
But here’s what we can offer: Massachusetts is now the most innovative state in the nation, according to the Bloomberg State Innovation Index. We have the university structure, with 250,000 students in 52 colleges and universities in Greater Boston, constantly renewing itself. We have the intellectual capital and innovation that encouraged GE to move its world headquarters to Boston. We have the city and state leadership that galvanized to create a public-private partnership to land GE. We have the creative real estate development world, which will come up with multiple options to meet Amazon’s real estate requirements. The GE experience shows that we can win on our own merits. Amazon can be a catalyst to stimulate a host of projects, public and private, as well as much needed infrastructure improvements, especially transit-oriented.
After Boston landed GE, other companies searching for facilities took note and are asking: Why Boston? Why Massachusetts? The answer is embedded in GE’s public statements that the intellectual capital in Boston is a foundation for future growth. As Jeffrey Immelt, former chairman of GE, said, “The schools and the startup ecosystem in Boston [are] amazing . . . we want to be part of this ecosystem of universities and scholarship and in this sea of ideas.”
We should dust off some of the ideas of the Olympics plan and examine what resources can be leveraged to attract Amazon. Amazon is the Olympics of the new economy. Massachusetts — Boston and Cambridge in particular — is a prime candidate for Amazon’s requirement that the headquarters be on a single site or multiple sites connected by rapid transit. Landing Amazon may strain some resources but would be a catalyst for reinvesting in our own economy, particularly in transportation projects.
Amazon’s positive impact would ripple through the entire economy with jobs created at every level. Governor Charlie Baker and Mayor Marty Walsh are on the case. We should make a full court press to win the Olympics of the Amazon challenge. We have a lot to gain and nothing to lose.Thomas J. Hynes Jr. is chief executive officer of Colliers International-Boston and past chairman of the Massachusetts Business Roundtable.