Spokane Journal of Business

Spokane to court Amazon

Business recruiters build case to land retail giant

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A team of Spokane economic development advocates is working on a longshot proposal to land the second headquarters for Amazon.com Inc., the world’s largest internet-based retailer.

Those recruiters hope Spokane’s workforce, cost of living, and business culture will compel the Seattle-based company to consider the east side of the state for HQ2, as the company is calling it.

Earlier this month, Amazon announced that it has begun a site-selection process for a second company headquarters in North America. The prospect of hosting the new location has many cities across the U.S., including Spokane, preparing to submit proposals by the company’s Oct. 19 deadline.

In choosing the location for its second headquarters, Amazon has indicated a preference for metropolitan areas of more than 1 million people; stable and business-friendly environments; urban or suburban locations with the potential to attract and retain strong technical talent; and communities that think big and creatively when considering locations and real estate options.

While Spokane, in theory, could be ruled out by the minimum population preference alone, it’s important to apply, says Larry Soehren, president and CEO of Kiemle & Hagood Co. commercial real estate company and chairman of Greater Spokane Incorporated, Spokane’s combined chamber of commerce and economic development council.

“You never know what factors will drive Amazon’s overall decision,” Soehren says. “We may be able to overcome some of those preferred criteria by combining with our neighboring counties and offering facts that prove our strength in areas like business environment, education, and workforce.”

The proposal could still serve as an important marketing tool for the community even if it doesn’t succeed in bringing HQ2 to the Lilac City, Soehren says.

“Being able to show Amazon what we have to offer is just as important for our long-term economic development,” he says. “Even if we don’t succeed, this pitch gives us greater exposure and puts us on the radar of other Seattle companies as a favorable place for background business opportunities.”

In a recent press release, Amazon said it expects to invest more than $5 billion to construct a second campus and plans to grow the location to include as many as 50,000 high-paying jobs eventually. 

In addition to direct hiring and investment, Amazon said it estimates construction and ongoing operation of the second headquarters will create tens of thousands of additional jobs, and tens of billions of dollars in additional investment in the surrounding community.

At 50,000 jobs, Amazon would employ nearly nine times more people here than Spokane’s current largest employer, which is Fairchild Air Force Base. 

Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy—with every dollar invested by Amazon in Seattle generating an additional $1.40 for the city’s economy overall.

Robin Toth, vice president of business development for GSI, says the organization already has begun coordinating with its cities and counties, as well as area business leaders to put together a competitive proposal.

“This is no small endeavor,” says Toth. “It’s a huge opportunity, but it’s going to take a lot of people and organizations working together to help us put our best proposal forward.”

So far, GSI has reached out to real estate brokers and land owners who might have sites available for a campus location. The organization also is working with regional economists and educational institutions to compile data on business and education opportunities, Toth says.

“Many of those data points are things we find useful in marketing not just Spokane but also the surrounding area,” she says. “We want to be sure this proposal shows support for the entire region.”

Toth says GSI also has reached out to Spokane Transit Authority and regional destination marketing organization Visit Spokane for advice on how best to market the region’s transit access and other amenities.

“We’ll be pitching all the usual things we market to visitors from outside the region,” says Soehren. “We have a stable and generally business-friendly environment, with an excellent educational system. We’re also a strong, creative community that’s able to organize and pull together events like Expo, Bloomsday, and Hoopfest.”

Doug Tweedy, the Spokane-based regional labor economist for the Washington state Employment Security Department, says one of the biggest assets Spokane should include in the proposal is its workforce.

“With two community colleges and private as well as state institutions of higher learning, we have a large labor pool that refreshes itself every year as young adults graduate,” he says. “That labor pipeline is something that could be very attractive to companies looking at a future here.”

Tweedy says Spokane also offers a more reasonable cost of living than larger cities.

“That’s a big part of the story of this area,” he says. “Wages earned here enable people to live a higher lifestyle than a similar wage would allow for if they were living on the West Side.”

Christine Johnson, chancellor of Community Colleges of Spokane, says she agrees the region’s workforce is one of its strongest marketable assets.

“We have a broad array of educational institutions not just here in Spokane, but also in the surrounding region,” she says. “Altogether, we have probably 76,000 students enrolled in higher education. It’s an enormous impact that gives us a strong, well-prepared workforce, which is something I think many companies find attractive.”

While she’s not certain Spokane will be able to succeed in attracting Amazon, Johnson says the community does have a reputation for surprises.

“We’ve been known to turn things around that were considered long shots,” she says. “I believe if we work together, anything is possible.”

One area in which Spokane’s proposal may still fall short, according to both Toth and Soehren, is in its ability to offer Amazon concessions or incentives. 

“Unlike larger cities in other states, we’re limited in what we can offer for incentives,” says Soehren. “But this pitch will include figures on things like total cost of doing business, cost of labor, lost productivity due to congestion, and availability of workforce.” 

“Spokane is on an upswing right now,” he continues. “We’re seeing increases in population, with a young, well-educated workforce, which is something I think a lot of companies will be interested in.”

Toth says it’s likely Spokane would need some form of legislation in order to offer Amazon either cost concessions or incentives.

“We plan to ask local, state, and federal legislators for ideas as to how to strengthen that section of our proposal,” she says. “Their input will be very helpful in that arena.” 

Toth says Spokane is vying against at least 500 competitors, including several other cities in the state, for the possibility of hosting the new headquarters site.

“This would be a game changer that could lay the groundwork for Spokane for decades to come,” she says. “I believe we have as good a proposition as any of our competitors.”

LeAnn Bjerken
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Reporter LeAnn Bjerken covers health care at the Journal of Business. A Minnesota native and cat lover, she enjoys beachside vacations and writing poetry. LeAnn has worked for the Journal since 2015.

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