Startups

Here’s What Startup Communities On Amazon’s HQ2 Short List Are Thinking

Amazon is narrowing down its options for its planned second headquarters, according to the Wall Street Journal.

The Washington Post reported on Nov. 3, that Crystal City, Va., was the frontrunner while the Wall Street Journal published a report today that the company had moved to “late-stage talks” with a small handful of communities including Crystal City, Dallas and New York City. There was even chatter that it could spread the headquarters over more than one location due to a shortage of tech talent in any given area.

What that means for those regions’ tech ecosystems is something we thought would be fun to examine.

There’s no doubt that wherever the retail giant chooses to land will be forever impacted by its presence in a number of ways. An Amazon headquarters would bring an estimated 25,000 to 50,000 jobs to the region over time (depending on whether it chooses one or two locations), which, in theory, sounds like a good thing. Something we’re realizing, though, is that not everyone is welcoming tech giants with open arms in their small(ish) backyards.

For example, a source told me that one large tech company was eager to sign a mega-lease in North Carolina near the Duke University campus; however, the school’s board reportedly rejected the idea. It was also reported that Google had scrapped plans to open a campus in Berlin after months of anti-gentrification protests.

The folks we talked to, at least, were pretty bullish on the possibility of Amazon choosing their region for a second headquarters.

Crystal City, Virginia

Bobbie Kilberg, CEO of the Northern Virginia Technology Council, is excited about the possibility of Crystal City being high on Amazon’s list.

She believes the area has a number of things that the e-commerce giant has said it is prioritizing, including a large tech talent pool and a robust public transportation system.

“We think it’ll be wonderful for us in terms of more jobs, obviously, but also equally for the ecosystem – especially for startups and higher education. It should also fuel research and development, which in turn leads to commercialization and intellectual property, where we haven’t been as robust as other areas,” Kilberg told Crunchbase News.

At the same time, she acknowledges that the requirement of as many as 50,000 employees will “put a strain on the present workforce capacity” in the short term.

“It will affect all our companies, as they will have to be much more competitive in getting employees when they’re already scrambling for talent,” Kilberg said. “That is a short-term reality. But on the plus side, it also means a huge amount of resources being put into workforce training in the region, which will be very good for us.”

Dallas

The Texas city is not exactly known as a tech hub, but it does have a few factors in its favor.

According to the Wall Street Journal, Dallas is appealing to Amazon due to its lower cost of living, along with “public-private partnership incentives, in the form of tax abatements, grants, infrastructure cost sharing, and other methods to offset project and operational costs.” Texas has also long been considered a top place to do business because of its lack of a state income tax.

Dayakar Puskoor, founding partner of Dallas-based Naya Ventures, told me today that he believes that Amazon’s presence in the area would be a great thing for the city.

“Dallas has been going through a transformation of becoming a tech friendly ecosystem. Amazon coming here would not only create new jobs, but also impact the retail, technology, media, and real estate sectors, all with positive consequences for startups,” he said.

As tech investors, Naya Ventures is especially excited by the fact that less talent from Dallas would be leaving the city to go to the Bay Area or other tech hubs, and that Amazon itself would be bringing in top talent, Puskoor said.

“That scenario would create a positive ecosystem for former employees to become entrepreneurs or go work for startups. Also, Amazon in Dallas would result in another great Fortune 500 company that our portfolio companies could have as customers or potential acquirers and/or strategic partners,” he added. “Overall, this could be a massive shift forward for Dallas as a leading startup ecosystem.”

Kirk Otis, senior vice president of Exit Partners, agrees that Amazon would be a positive addition to the region.

“If Dallas wins HQ2, it will be a huge boost to the Dallas venture ecosystem,” he wrote via email. “The culture, the capital, the talent impacts of the additional 50,000 in jobs will be huge.  Success breeds success, and while Dallas is already growing rapidly, the added energy and brand equity will attract even more talented people to the area. Those changes will have a direct impact on ideas, the ability to attract quality management teams, and will result in venture capital being put to work in the area.”

New York City

According to the Wall Street Journal, Amazon has explored the neighborhood of Long Island City in Queens, which borders the East River overlooking Manhattan and “is being developed with high-rise buildings filled with young professionals.”

New York’s governor, Andrew Cuomo, told reporters the state had put together a “very strong incentive package” and had had “great meetings” with Amazon.

“I’ll change my name to Amazon Cuomo if that’s what it takes, because it would be a great economic boost,” he was quoted as saying.

Of course, New York is home to a number of financial companies and startups, but one has to wonder if the region’s real estate costs would be prohibitive considering the size campus Amazon plans to develop. Salaries, too, are likely higher than other regions.

Regardless of what city Amazon picks, one thing is certain: Most of us are tiring of playing the guessing game and kind of wish Amazon would just make a decision, already. And according to the Wall Street Journal, that decision could be made as early as this week. Guess we’ll see!