Why San Antonio Should Pursue the Amazon HQ2 Deal

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Scott Ball / Rivard Report

Governor Greg Abbott receives a tour at the Amazon Fulfillment Center in Schertz, Texas.

There isn’t a single city in the United States with perfect credentials for hosting Amazon‘s proposed new headquarters and the 50,000 jobs and $5 billion of investment that will come with the move.

That’s why imperfect San Antonio should go all out to make the case for Amazon doing exactly what Toyota did a decade ago: Set aside its initial short list of destination cities for its new state-of-the-art vehicle manufacturing facility, and instead put it in San Antonio.

More recently, San Antonio fell short in its bid to persuade Tesla founder Elon Musk to locate his new battery factory here rather than Reno, Nev. Pursuing the deal, however, gave the city’s new, more unified economic development team the opportunity to act. I, for one, am eager to see Mayor Ron Nirenberg, Bexar County Judge Nelson Wolff, San Antonio Economic Development Foundation CEO Jenna Saucedo-Herrera, and others on the team, compete.

Dynamic leadership stands out. Not every city has it. San Antonio had it and then lost it. Now we have it again. It’s a visible advantage.

Some Cities Simply Do Not Qualify

Inland Texas cities have a strong case to make. If you take Amazon at its word, the company’s concern about cost-of-living virtually disqualifies East and West Coast cities. Even Chicago is pricey by comparison to other Midwest, Southern, and Southwestern cities. How sensitive company executives are to living costs will help shape their view of Texas: Dallas and Austin are considerably more expensive than San Antonio, where home and land values are rising, yet remain far below the national average for major U.S. cities.

With the current headquarters in Seattle, it’s only logical for Amazon executives to seek out a new geography, one with a stable weather profile. Hurricanes Harvey and Irma, and going back some years, Sandy, Katrina and Rita, all point to why every city from New York to Miami, from New Orleans to Houston, are likely to be struck from the list.

Not everyone yet believes in climate change and its potential impact on rising coastal water and storm ferocity, but I am betting Amazon’s leadership buys the science.

And then there is the “business-friendly” environment. The lack of a state income tax in Texas and its cultural aversion to government regulation of industry sets it apart from many states. Our reliance on real estate and sales taxes and low regulation can be blamed for a host of the state’s shortcomings, from low spending on public education to declining air quality, aquifer protections, and disinterest in conservation.

Those same factors, however, help make Texas attractive to corporations that want as little government interaction as possible. State incentive packages in Texas almost always trail those offered in other states competing for corporate headquarters and major manufacturing facilities. While the numbers will surely matter, I see this measure low on the checklist for a company whose market value climbs by the billions with every upward tick of the stock market.

The Real Competition

The New York Times published a fascinating interactive feature Saturday that ranks U.S. cities through a process of elimination as Times journalists waded through Amazon’s eight pages of criteria it handed to interested cities.

Click here to read the Times feature.

San Antonio makes the first cut of 25 eligible cities, but then falls off the list as Austin and Dallas make the next round of 14 cities that also offer strong labor pools of skilled workers. Cities like Charlotte, Raleigh, and Atlanta also remain in the running.

Ultimately, Denver prevails.I have written about the city at least twice as having the best mass transit system of any regional U.S. city, a thriving urban core animated by parks, public art, and many neighborhoods populated by smart young workers.

The Case for San Antonio

We are a warm and welcoming city unlike many metro areas where there is a distinct lack of regional government unity and engagement by the business community. I still remember Medtronic executives remarking that San Antonio was the only city to send a leadership team to its Southern California headquarters to make its case in person. That display of passion and purpose proved to be the deciding factor.

San Antonio’s team will have no problem putting a unified face on its offer to make room for Amazon here. We have plenty of open, affordable space, some of the least expensive and most reliable water and energy in the Southwest, and affordable homes and neighborhoods for workers.

Do not underestimate how much San Antonio has evolved since then-Mayor Julián Castro declared the Decade of Downtown in 2009. By 2020, we will significantly achieve and surpass most of the goals set by thousands of citizens who participated in the SA2020 process. We are a much more attractive city with many more talented, skilled workers now, and more arrive every week.

Cities like Denver, Austin, and Portland are years ahead of us in attracting a smart workforce to a more livable city, but that also makes them less appealing when looking at their cost-of-living, and the ability of an outside player like Amazon to help shape a city’s future.

Not everyone outside San Antonio recognizes our evolution, and only now are we beginning to tell a story that goes deeper than the Alamo, River Walk, and Sea World. This is a good opportunity for the local bid team to recruit some of our most talented young leaders from Tech Bloc, from the arts and culture community, designers and infill developers, educators, and yes, some of the best and brightest who now hold seats on City Council. All can be convincing voices of support.

Does Amazon have designs on Mexico and Latin America? It’s targeting everyone else, so the answer is probably yes. If it does have such plans, this is the city to establish a base as its move south of the border with our bilingual, bicultural workforce.

We have our glaring weaknesses. San Antonio International Airport is recording record passenger traffic, to its credit, and continues to incrementally improve its number of nonstop flight destinations. But we remain a very distant fourth to Dallas-Fort Worth, Houston, and Austin. What we lack, ironically, Amazon might add muscle to by its very presence. All those packages have to move by air and move quickly.

Our failure to win voter support for long-term mass transit planning and investment is a major problem, but also an opportunity for Mayor Nirenberg, City Council, and VIA Metropolitan Transit to go to voters and make the case that without a firm commitment to long-term light rail and bus investment, and a real – rather than fake – network of bike lanes, our city will never achieve its full potential. Young, talented professionals will always have more attractive cities to welcome them. Showing Amazon we are ready to accelerate such plans would strengthen our hand.

Bikers ride down Broadway Street during Síclovía, an effort started to increase physical activity in the community. Photo by Kathryn Boyd-Batstone.

Kathryn Boyd-Batstone / Rivard Report

Bikers ride down Broadway Street during Síclovía, an effort started to increase physical activity in the community.

Some in the private sector have suggested that San Antonio and Austin should combine forces to present a more formidable bid. I do not disagree that such a bid would accentuate our respective regional strengths and reduce some of our weaknesses, but I also think our two cities have yet to take baby steps together, so we are unlikely to suddenly start marching in lockstep. I doubt we have enough time or shared wisdom to reach such an accommodation.

San Antonio and Austin still compete more than they collaborate. Let’s hope that changes as the two booming metro areas with distinctive cultures continue to grow into a single megalopolis. In the meantime, let’s see how San Antonio stands on its own. No, we are not perfect. Neither is any other city.

 

11 thoughts on “Why San Antonio Should Pursue the Amazon HQ2 Deal

  1. Robert Rivard would do well to look into amazon’s employment practices before publishing a case for bringing them to San Antonio, and from there plug those practices into the bigger picture. The issue here is NOT how to make San Antonio look good, point out possible shortcomings, or argue we can make it work. The real issue here is amazon’s draconian employment practices, and the real question is: do we want a company like amazon creating a template for other businesses to follow – one that exploits and completely ignores the rights of workers, one that undermines even basic rights as protected by Federal and State laws, one that fundamentally discriminates. Rivard, start by taking a listen to RadioLab’s “Brown Box” http://www.radiolab.org/story/brown-box/ – amazon represents a REALLY LOW BAR for employment standards, and then ask is this was San Antonio really needs, because from where I sit, amazon will hardly serve as a foundation for lasting employment, economic security, or community growth …

  2. Business opportunity and providing jobs for people are great steps forward for any city. But I hop that these new developments do not overrun the quiet peace of the Espada neighborhood. South San Antonio represents the unique culture of closely bound family, friends and neighborhoods. Gentrification destroys this by forcing original families out with increased property values and rising taxes. Traditional values and neighborhoids, too, should be preserved or one has to question behind the term “progress”.

  3. I would add two more points–one to justify their coming here and one to justify the application for them to do so:

    1. San Antonio and Austin are growing into a Megalopolis. Putting the headquarters here would have the advantages San Antonio brings, avoid the disadvantages of Austin, while the employees would be able to easily travel back and forth and enjoy the pleasures of both cities.

    2. Even is San Antonio misses out as the eventual choice, there will be people at Amazon who will have learned more about the city and probably will be more impressed with San Antonio than they are now. Those people will talk to executives of other companies and may recommend San Antonio as a possible location for anyone else who is expanding to a new city. And they may even leave Amazon to go to another company and remember San Antonio as an interesting possibility for expansion.
    2.

  4. Beyond not having the best mass transit, San Antonio does not present itself as a city with much if any sort of integrated mass transit system in 2017 for folks visiting from Amazon or elsewhere and arriving by flight or regional private bus. The same cannot be said about Seattle or most other major U.S. cities.

    I hope as much effort this year is put into actually improving or restoring ‘arrival’ Amigos-type visitor information and VIA bus service at the airport and various private regional bus locations in downtown San Antonio (Vonlane on Commerce, Greyhound on N. St Mary’s, Omnibus on Broadway, Zima Real on Frio, Turimex on Alamo, and Megabus now waaaaaaaaay down on Probandt) as goes into any Amazon bid — including as such effort is necessary to win the bid.

    Particularly downtown, placement of BCycle stations or other bikeshare at major VIA transit hubs and near regional bus stops (Dallas now has Limebike and Spin at major transit stops including their Megabus stop) could help to create the impression that San Antonio is a transit city comparable with Amazon ‘competitor’ cities including Mexico City — Mexico City was not included in The New York Times analysis but is mentioned as a possible contender in Fortune.

    Amazon launched Prime service in Mexico City earlier this year, the first of likely similar endeavors throughout at least urban and population dense Latin America (the population of greater Mexico City is roughly equivalent to that of Texas or Australia). Beyond buses including electrified buses and a mainly rubber-tire metro system (basically Bus Rapid Transit, which has been highly successful in Latin America), Mexico City has improved transit service and convenience immensely and affordably with a growing network of protected bike lanes and bikeshare — their EcoBici system, launched in 2010, now has 444 stations and 6,000 bikes, with station locations now a factor in real estate listings if not property development.

    In addition to expanding and improving San Antonio’s bikeshare and protected bike path network, the City needs to put effort into luring Megabus — one of our strongest transit links to Austin currently — back downtown, including possibly by making better use of existing VIA facilities. Either Centro Plaza to the west or Thompson to the east could host Megabus service and possibly other private bus companies — as supported by visitor information, commercial (food and drink) options, BCycle and improved walkability and bikeability.

    Similarly, the County needs to invest in growing our regional transit system by not only installing BCycle stations at more County facilities downtown (For example, at Elections near the Zima Real bus station on Frio) but by investing in San Antonio extensions to the existing Capital Area (CARTS) regional bus network, improving San Antonio access to at least the San Marcos intermodal station — which serves major Amazon investments and job centers in San Marcos (via the San Marcos 5 bus route) but also Austin.

    Finally, private regional bus (a station) at the airport as well as downtown remains a key aspect of service at Mexico City and is comparable with offerings in Atlanta and Miami and other U.S. airports; San Antonio could strengthen our airport and position us as the leader in Texas with similar private bus service at SAT. Regardless, SAT deserves frequent (at least every 15 minutes) and full-day (throughout the airport operating day) service to VIA’s North Star hub two miles from the airport to improve links with downtown and existing private regional bus offerings.

    We need to look towards other southern cities, including Latin American cities, for clues as to how to not only attract companies like Amazon (with great walking, biking, street life and transit service) but to improve San Antonio for visitors and locals (with great walking, biking, street life and transit service).

  5. Every time something like this comes up, we hear whining about the deficiencies of SA’s airport. If that’s the deciding factor, then no city without a regional hub need bother trying to win this project. SA has some very large corporate headquarters already, and as far as I know they are not threatening to move because of our airport. People like to say that AT&T moved from SA because of our airport, but they forget that AT&T came here in the first place when our airport was less than what it is today; besides which, do you think the senior executives of AT&T or any other major company fly commercial or take a corporate jet? I don’t know if we have any chance at this deal or not, but I have a hard time believing that our airport will be a real impediment as opposed to just an excuse for failure or inaction.

  6. Denver and Chicago or Charlotte, NC will be the top three picks – good mass transit, density, neighborhood amenities, culture and arts, and relative affordability compared to other major cities.

  7. At its core, Amazon is a tech company that requires a constant stream of tech workers. All the competing cities have great University system nearby. SA lacks the quality and quantity of tech workers. Everything else is secondary.

  8. Concerns about potential destruction of the Espada neighborhood are real and reflect a much bigger issue – does San Antonio want to promote responsible business growth or are we so desperate that we’re happy to welcome what can only be described as Walmart on steroids. Do we really want to be home to a company who’s primary goal is to wipe out any small, mid-size, or even large company in it’s path, leaving workers no choice but to saddle-up with Amazon at lower pay, brutal work conditions, and essentially no rights? San Antonio needs companies that want to contibute to our community, and Amazon is hardly that; Amazon’s only goal is to line the pockets of Jeff Bezos who seems to think “community support and involvement” means using off-shore tax arrangements in order to avoid paying his due. There are plenty of examples of responsible “large company” employers in San Antonio that are committed to fair business practices that truly supporting our community via decent wages, benefits, etc:: USAA, Southwest Research Institute, Toyota, HEB; why not woo businesses like these?

  9. Austins Trafiic is a nightmare, San Antonio Highways you can get around pretty quickly. South East San Antonio like around Brooks City Base would be a great site, very close to downtown, Highway wide enough to add light rail from 410and 37 south to Downtown

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