No Place for San Antonio on Amazon’s Big Green Map

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Amazon announced its short list of 20 metropolitan areas to host HQ2 on Jan. 18. San Antonio is, unsurprisingly, not on it.

Emily Royall / Rivard Report

Amazon announced its short list of 20 metropolitan areas to host HQ2 on Jan. 18. San Antonio is, unsurprisingly, not on it.

Yes, it hurts to not be on Amazon’s big green map, especially with I-35 neighbors Austin and Dallas representing Texas. San Antonio found out last week that its decision not to submit a bid for HQ2, Amazon’s $5 billion, 50,000-jobs second headquarters, indeed proved to be a surefire way not to make the short list of finalists.

No surprise there, really. San Antonio’s leaders concluded they couldn’t compete, but that doesn’t mean we should be content with the judgment we cannot compete. It ought to hurt that San Antonio can’t make the cut of Top 20 cities. We may love the city where we live, work, and play, but we are better off being honest with ourselves about our shortcomings and then doing something about it.

That’s the real way to give meaning to the city’s Tricentennial year.

It certainly would have been interesting had San Antonio proposed a Texas two-step with neighboring Austin, packaging a bid that offered a fast train between the two cities if Amazon came. That idea never found traction in either city. San Antonio and Austin have no real history of effectively collaborating. If the two cities did have such a history, we might have regional air and rail service and maybe another pro sports franchise or two by now.

Instead, the two cities are on course to grow into one big, reluctant megalopolis over the next decade or two with little coordination, planning, or state funding to facilitate smart growth. And for San Antonio, that means watching Austin win more than we would like. Good for Austin, of course, but how about our city?

It’s hard to tell much from the company’s actual announcement – mostly that green map – about how founder and CEO Jeff Bezos, Amazon’s other senior leaders, and a committee of 12 employees are approaching the internal process of site selection. All we know for sure is that the final 20 came from the bigger pool of 238 suitor cities.

One thing we do know is that a number of the finalists don’t meet all of Amazon’s stated criteria, first released in September. There probably is no single city that meets all the criteria, although I have always thought Denver comes the closest as a metro area with more than 1 million people; a skilled workforce; affordable housing and cost of living; an impressive mass transit system; and a city with lots of curb appeal for young tech workers.

Denver did make the list, but as a Western city it’s an outlier. The majority of the cities are on or near the Atlantic Coast, which suggests the process could be an East Coast beauty pageant. Yet it’s home to four of the list’s least affordable cities: New York, Boston, Philadelphia, and Washington, D.C. That suggests that cost of living and affordable housing are secondary considerations for the selection team. (Los Angeles and Chicago are two other finalists with high costs of living.)

Eight finalists are in the Northeast Corridor, and 14 of the 20 are in the Eastern Time Zone.

Clearly, mass transit isn’t a must-have, either: Atlanta, Austin, Dallas, Columbus, Indianapolis, and Raleigh are all car-centric. Neither is Amazon’s call for 8 million square feet of office space. Clearly, just about everyone is going to have to clear land and build.

Workforce and first-tier universities that produce a steady stream of smart workers seem far more important. The importance of incentives will become more clear when Amazon releases a second-round list that pares the 20 cities down to five or fewer.

That brings me to Newark another finalist, with a high unemployment rate and nobody’s idea of a city on the rise or a magnet for smart young tech workers. Like many, I picked Detroit to be the sentimental favorite among down-and-out cities, even if it stood no chance to advance. Instead, New Jersey’s embarrassing $7 billion proffer of state and local incentives seems to have landed Newark on the list.

Some cities chose not to make incentives the focus of their bids. Toronto, the most diverse city in North America and the only finalist outside the United States to make the list, basically offered only a welcoming hand. The Canadians managed to bid while keeping their dignity intact. Austin also chose not to include a specific incentive package in its bid, according to the Austin American-Statesman, although the offer of a state incentive package is a given if Austin or Dallas make the next round.

My bet is that the single biggest factor in Amazon’s decision is this: Where will the next generation of talented, tech-savvy workers want to live and work? That will be the deciding factor, and that gives Austin a fighting chance, although other analysis gives Austin little chance. If that city does win, won’t San Antonio leaders wish they had proposed that Texas two-step?

Should San Antonio have bid, even if local leaders calculated that our bid would compare unfavorably? It’s not a question local leaders are asking themselves in any public way, yet it’s certainly a conversation worth having.

If the reasoning was “Do not bid on what you cannot win,” then the decision to not bid was the right one. If entering a bid would have helped San Antonio in other ways, by attracting more national attention to the city and its attributes in its Tricentennial year, or by accelerating a community conversation about long-term investment in mass transit, then the city should have bid.

Houston and El Paso both bid without success, and neither is the worse for wear.

By not bidding, San Antonio’s leaders presumably turned their attention to other economic development opportunities outside public view. Yet we now know those same leaders probably knew by late last year that the city also had been eliminated as a contender for the new Toyota-Mazda production plant.

Other cities and states publicly acknowledged their elimination as they received the news. San Antonio’s city leaders did not, which I think is short-sighted. Trust the public, even when the news is not good.

Elected officials at City Hall and Bexar County and some business leaders who objected to the no-bid decision back in October will take note of a statement made last week by Holly Sullivan, Amazon’s head of economic development, who was quoted in the New York Times and elsewhere on the day of the announcement:

“Getting from 238 to 20 was very tough – all the proposals showed tremendous enthusiasm and creativity,” Sullivan said. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

By not bidding at all, did San Antonio miss a bet to find its way on to Amazon’s radar? It’s highly unlikely the selection team would have added a third Texas city to its list of finalists, but that doesn’t mean the city can’t vie for a future subsidiary investment, especially if either Austin or Dallas wins the contest.

Bezos, on paper, is the richest person on the planet, according to Forbes. San Antonio could have made its point more effectively by bidding without an irresponsible incentive package. Take us or leave us on the merits, Amazon. That might have brought us some out-of-market admiration if not any Amazon jobs.

I have never been a proponent of kitchen-sink incentive packages that turn cities into beggars, either for big corporations or for pro sports team owners. Better to ask ourselves as a community: How can we better invest those same dollars to create jobs, improve education outcomes, increase social and economic equality, and maintain and improve our infrastructure?

The City of San Antonio recently arranged a reasonable package of incentives for USAA to bring 2,000 workers into its recently acquired pair of downtown office towers. At least 1,500 of those jobs will be new ones. Why doesn’t the City convene the area’s top employers and ask: How can we help you create more jobs here? Most of our biggest employers are creating jobs here, and also creating jobs elsewhere. Could we capture more of those jobs here with the right incentives?

Amazon’s promise of 50,000 new, high-paying jobs glitters with gold, and rightfully so, but according to the Dallas Fed, its annual report (which is not yet released) shows our metro area created nearly 35,000 new jobs in 2017. And while many of them do not pay Amazon salaries, most were created by local businesses without incentives.

One really good thing happened in San Antonio when Amazon first invited cities to bid. The city under newly-elected mayor Ron Nirenberg and the best-educated, most policy-driven City Council in memory took a very candid look in the mirror and began to talk more openly and honestly about the need to improve public schools, our higher education institutions, public transportation, affordable housing, and the many changes needed to make the city a more sustainable and livable place.

That conversation needs to continue with the same sense of urgency Amazon created in San Antonio for one brief moment in time.

 

23 thoughts on “No Place for San Antonio on Amazon’s Big Green Map

  1. I really enjoyed this article. Thank you.

    I like to think of it the way I do when I apply for jobs I know I’m not qualified for…sometimes its even just about getting over my own fear of thinking I’m not good enough or as good as he or she…sometimes just putting yourself out there surprises you. Maybe they don’t want a city with all the check-offs, maybe they’re really looking for that ‘je ne sais quoi’….which really was the reason I moved here. I only put my finger on why I did after the fact. San Antonio has that going for it and I think the people here know that too. Thus far it has been selfish with it’s own ‘magic’ so to speak. I mean selfish by remaining rather closed off in situations like this…to say “it’s not our style”… it’s a cringe worthy move on massive opportunities like this.

    I think your point that although it did not get Amazon taking about us for future infrastructure but that it started an internal dialogue among our own elected leaders is a good one too. Change, especially positive change, has to always start from the inside and work outwards. The fact that it got the gears turning in our own mechanism spells good change for the future.

    See everyone? I’m not ALWAYS mad…

  2. This is the best assessment written on the Amazon pursuit. I rest my case based on the statement made by Amazon’s head of economic development.
    “Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity. Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”
    San Antonio has not historically done an effective job of telling our story. Many of us, local small business leaders, have tried. Case in point, look at the number city contracts being awarded to companies outside our city. Just last week city council agenda item on creating a comprehensive housing policy framework was being recommended for a California company who would manage the contract from their Denver office with a subcontractor from Fort Worth. Go figure. The contract to work with the mayors housing task force and develop San Antonio’s housing framework to be devised by California and Fort Worth consultants. And after delving deeper in their submission posted on the city council agenda item, take a look at all of the contracts this company from California has obtained from our city’s entities as shown on.page 18.
    https://sanantonio.legistar.com/View.ashx?M=F&ID=5732789&GUID=C7282EBE-334D-485C-9DAA-E40309D5CF56
    Our city is notorious for not supporting its local small businesses. The very business leaders who have given tirelessly to help our city are overlooked for outside consultancies. The mayor appoints an airport advisory committee during the same time the city awarded its airport marketing and advertising contract to a Fort Worth company. Need I say more.

  3. Austin is only on the list so Bezos can say it’s on the list. As a long-term resident, I can assure you that with the number of problems the town already has (it hasn’t built a new untolled highway in decades, and traffic is still miserable; housing is skyrocketing; public transit is pathetic; there’s no place in-town large enough to handle 50,000 new workers, etc) will keep it from going any further.

    San Antonio didn’t bid, so of course they wouldn’t make the list of 20. They didn’t make the original list of 238. Not sure why this is worth such a lengthy article.

  4. The sentence that grabbed me was “How can we better invest those same dollars to create jobs, improve education outcomes, increase social and economic equality, and maintain and improve our infrastructure?”. I’m certainly no expert, but it seems to me that the era of growth as measure of success is nineteenth century, early twentieth century thinking. I love San Antonio, just as much as I loved Austin in the eighties and nineties when I lived there. San Antonio has a unique history and culture that’s beginning to disappear, similar to the way Austin disappeared and then morphed into a different city after the go-go growth that continues to this day. If the growth creates jobs, improves education outcomes, increases social and economic equality and improves infrastructure, then cheerlead for growth in San Antonio. My observation is that this growth has created lots of wealth in areas that were already well to do, driven up the cost of housing everywhere in the city, and created lots more traffic problems. Solve those problems and continue to make San Antonio a great city to visit and live in, and attracting companies that bring jobs similar to Amazon won’t be an issue.

  5. San Antonio’s decision not to bid, and to do so in such a loud and public way, sent a clear message to corporate leaders across America: “Even WE don’t consider ourselves economically competitive.” As you say, if we had simply bid and lost like over 200 other cities, we would be no worse off.

    Of course, San Antonio was right to recognize that it would not be able to land the HQ2, whether alone or in tandem with Austin (which has 0 interest in us). But by failing to make the minimal effort of bidding, and then broadcasting it to the world, San Antonio sent a deeply negative message to anyone considering a corporate relocation. And we cannot discount the possibility that San Antonio might have made the top 20 – Columbus, Indianapolis, and Nashville all did, and that alone would have been a huge boon to us in competing for other business. The bidding process was all upside, no downside, and San Antonio walked away.

    I think this reflects a lot of the self defeating and unrealistic thinking about San Antonio by people who live here. “The airport isn’t good enough, we can’t compete.” Actually, traffic is about what you would expect for a city this size, and certainly competitive with Columbus and Indianapolis. “We can’t compete without more public transit and a dense urban core.” “Or more culture for young people.” These are worthy goals, but not features of other top-20 HQ2 cities.

    If we could simply be realistic about where we stand – a mid-sized large city, the 24th largest metro, but the 35th largest metro economy competing with cities like Columbus, Sacramento, Milwaukee, Nashville, and Las Vegas for jobs, with both advantages (affordable prices, beautiful surroundings) and disadvantages (education, vast income disparities) we could make smart decisions where it counts, whether it is in the HQ2 and other corporate relocation messaging, education investment, infrastructure development, and so on.

    • What are we competing for? To have LA traffic, Bay Area home prices, 10 lane highways, and restaurants/stores as far as the eye can see? No thanks

    • I think instead that bexar county and san antonio showed great foresight to say we are more interested in spending time and money to build a greater number of smaller businesses that may reach 50,000 jobs than to fork over tax payer money to a private company not even profitable.
      DC/N VA is the only reasonable location for what they want. Unless they want pot to be legal, then its Boston or Denver. Although DC might also be good enough to check that box also.

  6. Yes – the answer is San Antonio action in not entering the bidding fray was a correct one. To over promise concessions to Amazon is to set the predicate for future bids – resulting in San Antonio losing some of its leverage and flexibility in negotiations. The role of government has expanded to well beyond what it was created for. Don’t worry, Amazon knows where San Antonio is – they have a distribution center here. We should be envious of other cities, but rather grow in our own “skin”.

    • I was going to say what Mr. Harcourt did. He said it well.

      1. Amazon knows about SATx quite well and will almost certainly continue to expand here.

      2. A losing bid for this colossal grab would, indeed, have been a negative for future opportunities, not a positive. What a incredible waste of people, time, effort, and money.

      3. This reminds me a great deal of the Musk grab for the battery ….

      Respectfully,

      Bob Bevard

  7. I’m glad we’re not on Amazon’s radar. I like being in a city that sort of flies under the radar. That’s what makes it more affordable, easier to get around, and easier to establish a sense of community.

  8. Ironically, Amazon’s business model undermines many of the things they are looking for in their HQ2. They want density, mass-transit, well-funded education, and affordable housing, but by destroying the small retailers that somehow survived the rise of big-box retail, Amazon strips jobs and tax base from cities and towns across the country. We need more dispersed ownership to create cities that can thrive when times are good and survive during extended economic downturns. If we have money to create incentives for businesses, let’s spend it on helping the small enterprises that have invested in our city and have a vested interest in its financial success.

  9. Good recap Bob, it’s pretty much on target.
    I think we should have given it (Amazon) a shot, waiting to provide any incentives if and when we would make the next round of cuts. No really cost to the City other than the normal costs incurred to submit a new business pitch.
    You did touch on one thing that has always concerned me:
    “Why doesn’t the City convene the area’s top employers and ask: How can we help you create more jobs here? Most of our biggest employers are creating jobs here, and also creating jobs elsewhere. Could we capture more of those jobs here with the right incentives?
    This should be a semi-annual community-wide effort, the easiest way to gain new business is to increase the business we have. That was the philosophy we followed in the ad business and hopefully is being followed by COSA. I hate that we lost AT&T and would for it to happen again.

  10. I know the Raleigh Durham area quite well. When you compare us to Raleigh Durham…I think we win in traffic and a few other things. I still feel it was a mistake not to bid.

    • I like San Antonio because it reminds me of really great places to live, like minneapolis and portland, who were also not on the wantabe list. Amazon knows where to find us if they are interested. I think we should be building out stem and art education instead and subsidizing art, theater, and culture if you want to have a well lived life.

  11. I like San Antonio because it reminds me of really great places to live, like minneapolis and portland, who were also not on the wantabe list. Amazon knows where to find us if they are interested. I think we should be building out stem and art education instead and subsidizing art, theater, and culture if you want to have a well lived life.

  12. Ultimately, Amazon will go where the talent is. Unfortunately, the talent isn’t in San Antonio. Even USAA was unwilling to invest in local talent — they located their design office in Austin!

    Education is key.

  13. I completely agree with San Antonio’s decision not to bid on Amazon. Let us not forget Elon Musk’s GigaFactory. They flirted with San Antonio and several other communities in Texas only to go to Nevada based on $1.3 billion in incentives. I see then same thing at work here. I will not be the least bit surprised if the headquarters lands in Newark. Elon Musk is pretty dang wealthy too, but he certainly didn’t turn his nose up a 1.3 billion to put a factory in the middle of the desert.

    This is a vanity project for Amazon and for whatever city lands it. It will be a blessing and a curse. Frankly, San Antonio doesn’t need it and there was no use in expending public energy and dollars trying to pursue it.

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