Four northeast cities must overcome significant challenges as they bid for Amazon's second world headquarters, said a report by a transportation advocacy group.
Tri-State Transportation Campaign added in the study, titled “Primed and Ready?” that leaders in New York, Hartford, Conn., Newark, N.J., and Philadelphia-Camden, N.J. -- the latter adjacent cities with separate bids -- still have a shot at landing the retail behemoth.
"The biggest thing is that they have some really big transportation challenges, but if the elected officials can do the right thing, they can turn it around," said Tri-State executive director Nick Sifuentes.
Amazon has solicited bids from 238 cities across North America to be the home location of “HQ2,” a new headquarters that the company said will be to 50,000 employees and billions of dollars in local investment.
"This is the most significant corporate headquarter relocation project in the history of economic development, given its sheer size and of course, the panache and the branding value of landing a company as innovative and exciting as Amazon," said John Boyd Jr., a partner at consulting firm Boyd & Co. in Princeton, N.J.
According to Boyd, Amazon wants to be in a premier labor market with access to top institutions.
"Transit is a big factor as well," he said.
Incentives and promotional events have ranged from Newark’s record-breaking $7 billion package of tax cuts to New York’s Amazon-themed light display on major landmarks the day the city submitted its bid.
“Amazon’s new headquarters offers the winning city economic growth, a massive influx of well-paid employees, a growing residential tax base— and a cautionary tale,” said the Tri-State report. “Each bidder should take heed.”
While Amazon has generated as much as $38 billion toward the local economy, its presence in Seattle has triggered increasing rents and housing costs, increasing gridlock on city streets, and dramatically altering the commuting patterns in the Pacific Northwest city.
"When Amazon came to Seattle, it wasn't the booming town it is today," said Sifuentes. "Now look at it. Other companies are flooding the area. Microsoft was already there but Amazon kick-started it."
Tri-State cited the strain on transportation in Seattle. King County Metro reports that many of the busiest routes in the system serve Amazon’s headquarters, with the transit agency having to expand service to accommodate rider influx.
“The lesson is clear,” said Tri-State. “When it comes to public transit, cities will need to scale up if they are to meet Amazon’s bid requirements and handle the influx of new commuters.”
In each of the metro areas Tri-State studied, it found that their transit networks can provide much of what Amazon seeks in a host city for HQ2 — but that funding shortfalls, delayed expansion projects, and gridlock threaten the viability of their bids.
In fact, a Moody’s Analytics analysis ranks New York City’s transportation system below many rival cities, including transit-rich regions such as Boston, Chicago, San Francisco, and Seattle — but also behind Hartford, Salt Lake City, and Buffalo.
New York City’s transportation challenges, which include some of the nation’s longest car and public transit commute times, threaten to undermine its bid for HQ2.
Gov. Andrew Cuomo is pushing for plans to provide the Metropolitan Transportation Authority, the state-run agency that operates the city’s subways and buses, is with new revenue. Tri-State favors the MoveNY congestion pricing proposals, which supporters say could raise as much as $1.5 billion annually for public transit.
“With Amazon selecting the winning city in 2018, the governor should propose congestion pricing in January, when he reveals his executive budget, in order to reassure the tech giant that transit fixes are on the way,” said Tri-State.
The city's tech expansion is also a plus, according to Howard Cure, director of municipal bond research for Evercore Wealth Management.
"There has been a nice growth in the tech sector," saId Cure, referring to tech buildouts by Cornell University on Roosevelt Island, and Columbia and New York University data centers.
"Venture capital has really expanded in New York as an extension of the growth of the tech sector."
Despite Hartford’s financial problems – Connecticut’s capital city has not ruled out a bankruptcy filing and the state’s fiscal 2018 budget was five months late -- human capital is among the state’s most compelling attributes, said Tri-State.
Greater Hartford is ranked 22nd-most-educated among the nation’s 150 largest metro areas, and according to data from Moody’s Analytics, the area has an oversupply of people with degrees in engineering, math and computer science.
Its metro area, though, is heavily car dependent and east-west Interstate 84 viaduct through Hartford is the state’s busiest stretch of highway. A new bus rapid transit corridor, a commuter rail line expected next year, and revamped zoning and parking regulations may help the city prep for large-scale economic development, said Tri-State.
Amazon already has two existing facilities in Connecticut: a sorting facility in Wallingford, 25 miles south of Hartford, and a fulfillment center in Windsor, 10 miles north of the capital.
New Jersey is already has Amazon distribution centers with more than 13,000 Amazon employees. Newark could immediately offer 33 Washington St. and the Gateway Center facility near Newark Penn Station, with future development that could include 7.5 million square feet at the Mulberry Commons, South of Market, Lotus Riverfront, or vacant land.
Newark also has Newark Liberty International Airport, Port Newark Marine Terminal and train stations that serve Amtrak and Port Authority Trans-Hudson, or PATH.
Underfunding of mass transit during Gov. Chris Christie's eight years is a major obstacle, said Tri-State, as are questions surrounding the Gateway project to expand tunnel capacity under the Hudson River. Its cost is approaching $30 billion.
Philadelphia and neighbor Camden, N.J., have submitted separate proposals for Amazon’s second headquarters.
“Although the two proposals highlight their unique respective strengths, the metropolitan region presents a strong case on either side of the Delaware River,” said Tri-State. “Both cities see the chance to capture momentum from other large corporations relocating to their city.”
Mayor Jim Kenney called Philadelphia the “Goldilocks zone for Amazon,” while Camden’s proposal could elevate an economically distressed city by offering affordable land that Amazon could use while still locating centrally.
Both proposals draw on their connections to the Philadelphia International Airport, Amtrak, River Line light rail, Port Authority Transit Corp. and Southeastern Pennsylvania Transportation Authority subways, and NJTransit and SEPTA buses.