What’s the issue: Kansas City is trying to land Amazon’s second North American headquarters. Proposals are due in less than two weeks, and a winner is announced in 2018.
How does it affect me: The company would make a $5 billion investment over 15 to 17 years and create up to 50,000 jobs that it describes as high paying.
Independence will be in the picture when Kansas City makes its pitch to Amazon for its second North American headquarters.
“We submitted a greenfield site in the Little Blue valley for consideration,” said Tom Lesnak, president of the Independence Economic Development Council.
That was one of 30 to 40 sites around the metro submitted to the Kansas City Area Development Council. Lesnak said that group is looking for both urban and suburban sites and settled on several to include in its proposal due to Amazon by Oct. 19. The ADC selected an unknown number of those sites – Lesnak said perhaps it was half – to put in the proposal, including Independence.
The ADC also is pulling together demographic and economic data, as well as information on what government incentives would be available to Amazon. Lesnak and other officials around the area have helped gather some of that. He said there was a “lot of information we had to do in about a 72-hour time frame.”
Amazon, a giant in online selling, is based in Seattle. It announced last month that it plans to build a second headquarters – fully on par with the Seattle headquarters, it says – in a North American city of 1 million or more. About 50 metro areas, including Kansas City with roughly 2 million people, are of that size. The company is looking to invest up to $5 billion and create up to 50,000 high-paying jobs over 15 to 17 years.
The company had laid out what it’s looking for. It wants to be within 30 miles of a population center, within 45 minutes of an international airport and one to two miles from major highways. It also wants onsite access to mass transit. It needs 500,000 square feet of space in 2019 and up to 8 million square feet eventually.
What does that look like? The company points to its Seattle headquarters, which has 8.1 million square feet of space in 33 buildings, with more than 40,000 employees and a $25.7 billion payroll. The company also stresses the indirect benefits to Seattle – another 53,000 spin-off jobs with $17 billion in payroll. Also, in the last seven years Seattle has gone from seven to 31 Fortune 500 companies with engineering or research-and-development centers in the city, Amazon says.
Does Kansas City have a chance? Lesnak said Kansas City and other cities such as Omaha and Dallas enjoy the advantage of a low cost of living compared with much of the rest of the country.
“I think middle America is probably competitive on this thing,” he said.
Economist Jeff Pinkerton, writing for the KCEconomy blog at the Mid-America Regional Council, cited the area’s relatively high number of tech workers, a major asset.
“Even with this strong base,” Pinkerton writes, “Kansas City will need to demonstrate a robust talent pipeline to supply enough workers to meet Amazon’s expectations. Yes, computer and math occupations are a relative strength for us, but we currently have just 44,000 workers with these jobs, and most of these workers are already gainfully employed. Amazon will need 50,000 more.”
He goes on, “No metro has a bullpen of 50,000 tech workers just waiting for a call, so finding 50,000 talented new employees will be a challenge for all metros pursuing Amazon. This is an opportunity for Kansas City to propose some innovative ideas about how we will build a talent pipeline.”
Amazon is clear on that point, too, posting: “A highly educated labor pool is critical and a strong university system is required.”
Lesnak mentioned the same issue and pointed out that the company’s 15-year buildout gives higher-education leaders time to build more robust programs.
Other factors come into play as well:
• “ … I think the airport is an obvious weakness,” Lesnak said. Kansas City voters will decide next month on a plan for a single terminal to replace the three terminals at Kansas City International Airport, overhauling and modernizing the 45-year-old facility. Advocates of renovation say airlines have begun passing over KCI for some added flights but say the airlines have hinted that a new terminal would mean new flights, including some overseas.
• Lesnak points out that the city has made substantial investments in renewable energy, specifically solar and wind power. It’s possible the entire Amazon campus in the Little Blue Valley could be powered that way, he said.
• Amazon is keen on lifestyle considerations such as walking and biking trails, and the valley already has those.
• A commuter rail system could give the valley direct public transportation service. Jackson County outlined a plan eight years ago, with one of the first two lines running through the valley just east of Centerpoint Medical Center on Kansas City Southern tracks. But the KCS in 2013 said it was no longer interested in that idea. The county has stepped away from commuter rail, and the Kansas City Area Transportation Authority is mainly focused at the moment on long-term plans for possible commuter service on a line in Kansas City, Raytown and Lee’s Summit.
“Issues like transit, air service and overall quality of life will all weigh heavily,” writes Pinkerton, who put the Amazon headquarters salaries at $100,000 a year. “On these topics, Kansas City can tout recent progress and current and future plans.”
“Landing such a big economic development prize might be a bit of a reach, but going through the process is still worthwhile,” he continues. “The new economy is tech based. Winning economies are going to be those that can grow and attract tech talent.”