Who says Jeff Bezos doesn’t do corporate synergy? Amazon’s announcement that they’re looking for a second headquarters in North America has exploded the market for hot takes about cities, which is probably giving at least some benefit to the Bezos-owned Washington Post.
While I do think that Philadelphia would be a very good fit for Amazon, I’m also of the opinion that Amazon already has at most two or three candidates already in mind, and that this process will be a shakedown of the preselected winner, much like Tesla did when “considering” where to site the Gigafactory 1 facility. (My personal prediction is that Philly will lose in the final down-select round to either Chicago or Dallas.) So this post isn’t going to be about all that. Instead, it’s going to be about the specific cultural choices that Amazon has made that make it such a catch for a large, self-respecting city.
When one thinks of tech sector offices, specific images come to mind. Sprawling office park campuses laden down with all manner of creature-comfort amenities, from gourmet cafeterias, to on-site dry cleaning, to nerf guns in every open-plan cubicle. Those images come from the specific circumstances of a specific place: Silicon Valley. OK, the nerf guns actually are just pervasive whimsy, but the on-site, corporately-provided amenities are specific reactions to the fact that Silicon Valley’s office parks were built far away from the transit corridors along Caltrain or El Camino Real, so everyone who doesn’t take a tech shuttle bus drives to work, and leaving the office to run errands off-site would gridlock the roads, if a substantial proportion of workers did so. For that reason, many Silicon Valley companies have agreements with their host municipalities, that they will take extraordinary steps to make sure that as few of of their employees as possible will be driving out of their campuses each day. This means that Silicon Valley workers, the villains of terrible and wrong-headed gentrification takes throughout the Bay Area, are actually systemically under-paid, because so much of what would be their compensation is instead funding these amenities designed to keep them at the office for longer.
Amazon is not a creature of Silicon Valley. Amazon is based in Seattle, and has no appetite for this kind of nonsense. They would much rather give their employees more money, and let them out of the office to meet their needs in the city surrounding their campus, which extends to even eating lunch at the proliferating restaurants and food trucks in South Lake Union. Nor does Amazon want to spend much money on that most common of employee perks, the parking spot. They’ve already built garages, and that was expensive enough, thank you. While there are Amazon-operated tech shuttles in Seattle, most bus-riding employees at the South Lake Union campus are taking King County Metro, which has altered its service patterns to cope with the new demand, most recently to accommodate a wave of summer interns coming south from the UW campus. Amazon has also covered the capital and operating costs of a fourth vehicle on the South Lake Union Streetcar, which enables that short local circulator route to run every 10 minutes instead of every 15. According to Amazon’s own figures, 20% of Amazon’s employees in South Lake Union walk to work; something completely unimaginable in the stroad-ridden sprawl of suburban California. A further 35% bike or take transit.
Here is what Amazon has to say for itself about its present headquarters campus:
Even professional urbanists and planners would have a difficult time assembling such a paean to urban living.
So if Amazon is so proud of its Seattle headquarters, why does it need a new one? Short answer, at least assuming that the answer makes any sense at all, is that it has run out of room to expand the South Lake Union campus. Amazon has the largest corporate campus in America, by both percentage of the city’s commercial office space and absolute number of square feet, by wide margins, and even with HQ2 it still expects to grow its physical presence in central Seattle by 50%. But that growth comes with increasing costs, both directly to Amazon, and indirectly by the increasing difficulty in attracting new recruits to the increasingly expensive Seattle residential real estate market. Amazon is looking to recreate that urban magic in a place where it won’t wind up costing itself billions of dollars through the sheer disruption of its own scale. It has no plans to slow down its own growth, after all. As compelling as Matt Yglesias’s case is that Seattle should compel Amazon to just double down on its present headquarters by abolishing single-family zoning and increasing density throughout King County — indeed, Seattle should do those things anyway — Amazon’s best option to stay concentrated in Puget Sound might be to simply send HQ2 35 miles down the road to Downtown Tacoma. Seattle is not full, but it is filling up as far as Amazon is concerned.
So not only will the eventual winner of the HQ2 beauty contest win 50,000 high-paying jobs, and billions of dollars of construction, net the billions in tax incentives that Amazon is likely to extort, but there will be massive multiplier implications for neighboring businesses and the wider economy. This will be especially true in the immediate area (i.e. walking range) of the campus. The tax base implications of that multiplier effect will be very large. This is a far better deal for a host city than your average tech company, or your average corporate headquarters, assuming of course that the “winning” city doesn’t bankrupt itself by overbidding on the incentives.
But needless to say, there just aren’t that many walkable downtowns in big city metropolitan areas. As much as I think the best site for Philadelphia for an HQ2 development would be the Uptown Business District surrounding North Philadelphia Station, the location that actually meets more of Amazon’s desires is the Schuylkill Yards and the 30th Street Station District. The Navy Yard, though it may look tempting on the surface, is right out. (Also, when I said this post wouldn’t be about a Philadelphia bid, I lied.)
For what it’s worth, we already have one tech company headquarters built along urbanist lines in Center City Philadelphia, and when the Comcast Technology Center opens up next year, that will officially become a campus. Comcast has also been loathe to run too many of its own amenities; while the cafeteria on the top floor of Comcast 1 is legendary, Comcast doesn’t even run the leasing of the food court in its own basement, and the foot traffic to the Wawa across Arch Street necessitated a midblock crossing. After Comcast 2 opens, there will be 2,000,000 square feet of Comcast offices between the two buildings, and only 157 accessory parking spaces total; the 70 in Comcast 2 coming after the 87 in Comcast 1 were found to be too many, for a building with a direct entrance to Suburban Station. Even Amazon can’t beat that, at least not in Seattle. It’s too bad that Comcast’s fundamental business model is “exploit infrastructural monopolies”, although as more people from the NBC-Universal side percolate into senior roles, maybe that will change. I’ll believe it when TV shows start being produced here instead of at 30 Rockefeller Center. Amazon at least has “exploit scale to defeat logistical inefficiencies”, which bodes much better for innovation, since logistics will always be improvable.
So, while I think it’s true that your city will lose the contest for HQ2, and unlike Henry Grabar, I think my own city is not exempt, I think that if Amazon’s philosophy of the relationship between company and polis spreads, it will be very good for large, very dense urban centers like Philadelphia. It will be especially good for the ones (again, like Philadelphia) that are still relegated to second-tier status.