SALT LAKE CITY — Amazon knowingly ignited a frenzied bidding war across North America when the e-commerce giant announced its plans to build a second headquarters in a city that could meet the company’s requirements.
While states across the country have announced aggressive public initiatives to win the company’s love, Utah has taken a more circumspect strategy as it assesses the impact of such a project.
The online retailer says the company would bring an estimated 50,000 jobs and $5 billion in capital investment over the next 17 years, and many states are jumping at what some are calling a “once-in-a-lifetime” economic opportunity. Yet Utah officials say that growth comes with a price.
“The Amazon request is just incredibly intriguing … but it also raises questions about growth,” said Ben Hart, deputy director at the Governor’s Office of Economic Development. “That’s a lot of jobs. Granted, it’s over a long period of (time), but we have to take into consideration whether this is the right project for the state of Utah.”
A project like Amazon’s would affect everything from transportation infrastructure to air quality and would require extensive strategic planning to ensure quality of life in the state didn’t suffer as a result of growing pains.
Amazon’s headquarters in Seattle currently employ 40,000 people, according to Business Insider, and the company says it’s created 53,000 jobs in the city while pumping $38 billion into the local economy.
But Seattle’s housing market has skyrocketed since, to the tune of $42.08 rent per square foot for an apartment in the downtown area, compared to $31.38 in 2009, Business Insider said. The city’s homeless population has also increased, especially since the headquarters brought in mostly jobs for highly skilled and educated workers.
“It’s going to be 4,000 new employees per year,” Hart said. “When you look at the absorption rate, we do believe we could absorb those jobs, but it’s definitely going to be a lot of jobs. There’s no question about that. When it comes to Utah’s chances, that’s ultimately going to be one of the things that people look at.”
Local leaders have been fairly tight-lipped about what a state bid for the headquarters might look like, and the state hasn’t made an official announcement or launched a public initiative, as some cities across the country have.
Even smaller cities, like Birmingham, Alabama, have kicked off social media campaigns to engage their citizens, encouraging residents to tag Amazon in social media posts about the project or tweet the city’s slogan: “Bring Amazon to Birmingham,” according to local news outlet Birmingham Business Journal.
Utah also tends to be more conservative when it comes to corporate recruitment and doesn’t issue tax incentives until the recipient company performs, which Hart says is a way to protect taxpayers if a company doesn’t achieve the success they say they will. Utah will compete, however, against other states that won’t be as cautious about the incentives they offer the retail conglomerate.
Yet state leaders don’t believe Utah is out of the running.
Key factors for Utah
Hart believes one of the key factors that sets Utah apart is its regulatory environment, especially compared to other states that impose more regulatory barriers on businesses. Utah also offers “the most bang for your buck,” he said.
Though housing prices are on the rise in the Beehive State, the cost of doing business in Utah is relatively low and the state has been consistently ranked as one of the best states for doing business by the likes of CNBC and Forbes.
(Other states') highest demographic population are the ones that are getting ready to exit the workforce. It’s the opposite in Utah.
–Ben Hart, Office of Economic Development
“We also talk about our workforce. We’re young,” Hart said. “When you compare us with almost every other state in the country, their highest demographic population are the ones that are getting ready to exit the workforce. … It’s the opposite in Utah. There are a lot of kids. Businesses love that because they know they’re going to have a dedicated workforce for generations to come.”
Utah is also home to a rapidly-growing tech scene, though it competes with other areas — like Austin, Texas, and Denver, Colorado — that are churning out tech talent in the hopes of becoming the next Silicon Valley.
And like other states, Utah faces a tech skills gap as companies find sometimes there simply aren’t enough qualified workers to fill all the positions available, though Hart says the state hopes to focus on STEM education at an early level, whether or not Amazon comes to Utah.
When asked if the state will espouse any specific city for a bid, Hart didn’t answer directly. He did say that one of Amazon’s requirements was that the city must be within 45 minutes driving distance of an international airport, which could knock a city like Provo off the list of potentials (especially during rush hour), unless there were some major changes to traffic infrastructure.
Amazon has asked communities to think “big and creatively” when considering locations and real estate options before the company's Oct. 19 deadline. For Utah, that may mean something specific.
“Big means sustainable,” Hart said. “We really are kind of a blank slate when you think about it. The state has developed very well over the past 150 years, but I think the opportunity is, we’ve got a couple of 20, 30, 40 years that are going to be critical. For any business coming into the state, it’s their opportunity to grow with the state… When we think big, we’re not talking about where tech has been, we’re talking about where tech is going."
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