Metro Vancouver doesn’t make the cut for Amazon’s HQ2 short list

VANCOUVER (NEWS 1130) – We were a long shot from the start. Now, Metro Vancouver is officially out of the running to be home to Amazon’s second headquarters.

Local tech expert John Biehler isn’t surprised to hear Vancouver didn’t make the cut.

“They had announced that they were going to be expanding their Vancouver operations last year already. I think that was kind of wishful thinking that Vancouver would get the second headquarters. I think it would make more sense for Amazon to go somewhere else, not so close to their own headquarters.”

Amazon’s existing headquarters is just a few hours south of Metro Vancouver, in Seattle.

“I think we’re just a little too close to Seattle to really benefit Amazon in the way that we would like them to,” says Biehler.

Toronto is the only Canadian city on Amazon Inc.’s short list of 20 candidates for a second North American headquarters.

“I think they have a better shot [than Metro Vancouver did] but it also really depends on what Amazon’s hoping to do at that location. Toronto is basically a very big hub for Amazon warehousing and merchandise, but I don’t know if it necessarily needs to be a hub for their second headquarters. I guess that would be up to Amazon as to what their reasons having a second headquarters should be.”

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While Vancouver’s joint bid with Surrey was overlooked by the tech giant, Metro Vancouver Chair Greg Moore says throwing in a bid was still worthwhile.

“We’ll have to take a look at the process that we went through, and maybe through some of our connections that we have and the City of Vancouver has with Amazon, to connect with them in due course to find out what they were looking at and maybe where we fell short and where we can do a better job in the future,” says Moore.

Vancouver city councillor Adriane Carr says this announcement gives our region a bit of a breathing room — she had concerns about what 50,000 new high paid workers would mean for our already tight housing market.

“That number of workers would really put undue pressure on an already pressured housing market, where it would drive up unaffordability even more.”

But Moore believes attracting companies which pay high wages is an important part of the affordability discussion.

“We have one of the lowest average household incomes here in Metro Vancouver compared with other cities across Canada and compared with other cities in North America of our same size, so we need to look at how we can drive up income in our communities and our households, so attracting higher quality employment into this region also helps with that affordability discussion that’s going on here,” says Moore.

The e-commerce giant received 238 applications for the opportunity and says narrowing it down to 20 was very tough.

The other 19 locations it will consider are all in the U.S. and include New York City, Chicago, Los Angeles, Denver and Nashville. Ottawa, Halifax and Calgary also submitted proposals.

Amazon says it plans to choose the location later this year after diving deeper into the proposals from its top cities.

An Amazon spokesperson says the process taught the company about several new communities across North America that it will consider as locations for future infrastructure investment and job creation.

Toronto’s mayor celebrates city being short-listed

Toronto Mayor John Tory celebrated the city’s triumph at a news conference held Thursday morning.

Likening the inclusion on the short list to “making the playoffs” in a sports tournament, he said the city and the surrounding municipalities that were also included in its bid can clearly compete on the global business stage.

“We’re excited to have this opportunity and to be able to tell Toronto’s unique story,” he said. “There is no other place in North America that can boast the same talent, the same quality of life, the same vibrancy, the same economic strength.”

Toronto Global, the group that compiled the city’s bid, said it was honoured to have made the short list among such fierce competition.

It said it would work with the federal and provincial government as it learned more about Amazon’s next steps in deciding on its future corporate home.

“From a future-proofed talent pipeline, to universal health care and benefits, to an incredibly cost-competitive business climate, the Toronto Region is the location that addresses all of Amazon’s needs,” the group said in a statement.

Tory noted that Toronto attracted Amazon’s attention without resorting to tax breaks and other financial incentives offered by some of the U.S. competitors that also made the short list. The city of Boston’s bid includes $75 million for affordable housing for Amazon employees, while the city of Newark, N.J. proposed to give the company $2 billion in tax breaks.

Tory said the strength of Toronto’s bid lay in other factors.

“I’d be very surprised if we’re suddenly going to switch course now and say that we found some pot of money that we frankly didn’t think was worthy of putting in in the context of what really was going to make this the best place for Amazon to locate,” he said.

The sentiment was echoed by Ontario Premier Kathleen Wynne, who said the depth of Ontario’s talent pool combined with government supports unique to Canada would make the province an ideal home for the new headquarters, widely dubbed HQ2.

“No competing U.S. city comes even close to offering this level of talent, nor can they measure up in the ways we are supporting both workers and businesses, be it through universal public health care, a strong system of publicly funded education, expanding access to quality and affordable child care, or the magnitude of our commitment to public infrastructure,” Wynne said in a statement.

 

The province said the premier’s business adviser and former TD Bank CEO Ed Clark will help co-ordinate the government’s response as the process moves ahead.

Amazon did not immediately share details of the next steps in the process, but said it would make its final decision later this year.

“Getting from 238 to 20 was very tough,” Amazon said in a tweet announcing the short list. “All the proposals showed tremendous enthusiasm and creativity.”

In the bid it submitted to Amazon last October, Toronto was quick to point out that it met all the criteria the company specified in its search for a second corporate home.

The company’s wish list included proximity to a metropolitan area with more than a million people; ability to attract top technical talent, a location 45 minutes from an international airport, direct access to mass transit, and the capacity to expand the headquarters to more than 740,000 square metres over the next decade.

Toronto also touted diversity as one of its strengths alongside its lower business costs relative to similarly sized American competitors, expanding infrastructure and low crime rates.

The city’s pitch also took what could be construed as a dig at U.S. President Donald Trump and his administrations anti-immigration policies.

“We build doors, not walls,” reads the cover letter from the group co-ordinating the bid from Toronto and several surrounding municipalities. “Those doors open to highly skilled economic immigrants and international students who can easily become permanent residents and citizens.”

The effort to bring the new headquarters to Canada was spearheaded by none other than Prime Minister Justin Trudeau, who penned a letter to Amazon founder Jeff Bezos as the bids were flooding in.

The letter, which did not single out any particular city, outlined commercial, cultural and social reasons why Amazon should call Canada home to the new offices, dubbed HQ2.

“Canadian cities are progressive, confident, and natural homes for forward-thinking global leaders,” Trudeau wrote in his letter. “They are consistently ranked as the best places to live, work and play in the world.”

Canada’s business advantages include costs among the lowest in the G7, universal health care that lowers the cost to employers, stable banking systems, and a deep pool of highly educated prospective workers from both at home and abroad, according to Trudeau.

The letter also touched on increased government investment in skills development, culturally diverse, walkable cities and streamlined immigration processes.

At least one industry watcher said Toronto has cause to celebrate even if it ultimately does not land the coveted headquarters.

“I actually think Toronto has already won in some sense,” said Sean Mullin, executive director of the Brookfield Institute for Innovation and Entrepreneurship. “Six months ago we were not being included in the conversation about what are the top five or top seven tech industry destinations in North America…Now Toronto is on that list, and I think it’s going to continue to be thought of from that perspective.”

— With files from the Associated Press