We surveyed site selectors about future HQ2 moves. Here’s what they said
Amazon’s year-long search is playing out like a soap opera and a PR nightmare. Between scrapping its Long Island City HQ2 location to the public backlash following reports that the company paid no income taxes on $11.2 billion profits – it makes you wonder if they would’ve reconsidered the public search process. Meanwhile, cities unleashed piles of competitive data that Amazon (and the public) has at their disposal, and the reality that most cities should’ve never even sold their souls to the Amazon bid in the first place.
Obviously, there are many takeaways, including the need for a ready pipeline of high tech talent. And while we may never see another public showdown like this, it’s really just the beginning of HQ2 changes.
Honeywell already indicated a move to Charlotte with average pay being about $85,000.
What happens if Facebook decides to open a second HQ or if Boeing decides to move its headquarters again from Chicago and follow suit with companies leaving Illinois due to budget woes and political chaos? What would your city do now in preparation? Do you have the infrastructure set up to take on the next big thing? What if cities had not spent thousands pitching Amazon and instead invested into the next Amazon?
Since we work with cities to create location envy and develop place equity, we sought out practical insight that could help communities leverage these learning opportunities into their business attraction plans. So we surveyed a group of site selectors for their predictions on future HQ2 moves, what cities and economic developers should be focusing on today, and sleeper markets quietly gaining momentum as relocation hotspots. While no two responses were the same, what was consistent is that site selectors all agreed that there are a few key markets winning over business lost from poor business climates (i.e. Illinois and California).
Here’s what they said in Part 1 of our site selector series.
We asked our site selectors to predict which companies are ripe for a big move whether to uproot completely or open an HQ2.
James Beatty from site selection firm, NCS International says: “I’m picking Xyleco based out of Washington as it’s attracted hundreds of millions of investment dollars and has amassed some serious intellectual properties and patents in life sciences.” James shared that Xyleco’s breakthrough in biomass and plastics has positioned them to be sought after by every state for their laboratory research facility and high paying jobs. While the company is currently private, James suspects that they will go public at some point.
Joseph Vranich from Spectrum Location Solutions said that he’s noticed an uptick in inquiries from coastal-based companies inquiring about sites in the Midwest. He believes that this is being driven by two components: logistics and housing affordability for employees.
It’s obvious that several markets across Texas continue to draw significant interest from companies. However, we also wanted to know which (unexpected) markets were quietly gaining momentum as a relocation hot spot.
Dawn Baetsen from Baetsen Associates reminds us not to sleep on Detroit and that widespread revitalization continues across the metropolitan region.
Dean Foote from Foote Consulting suggested that Madison, WI isn’t really talked about, but that it’s attractive as a university town with a strong pipeline of talent.
Other markets mentioned as quiet hotspots were Omaha, Birmingham, and Kansas City, MO.
Lastly, we asked our site selectors for their advice on the one thing that cities and communities could do now in preparation for any major HQ2 moves.
Joseph Vranich emphasized the importance of having a regional approach and intra-regional cooperation. “Don’t be like the D.C. area during Amazon HQ2 where Maryland officials bad-mouthed Virginia and D.C. and Amazon experienced a lot of turf protecting.”
James Beatty suggested that cities consider its infrastructure from housing to sewers to determine what is a realistic and affordable impact in the event of landing a major project. He also used the $10B Foxconn deal in Wisconsin as an example of measuring impact. “Foxconn’s plans to create 13,000 direct good-paying, family-supporting jobs represents the largest foreign direct investment in Wisconsin history and is one of the largest greenfield investments by a foreign-based company in U.S. history, as measured by jobs. The project will add $51 billion to Wisconsin’s GDP over the next 15 years and translates to $18 returned for every $1 invested by the state.”
Dawn Baetsen says that a city must have a rapid response package with incentives to alleviate company moving costs and should also illustrate the area’s ability to identify with the company’s culture.
Ultimately, talent attraction and retention, being closer to customers and suppliers, livability, infrastructure, and business friendliness are all driving forces in how locations are picked.
So with this in mind, how would you rate your city’s readiness to attract and accommodate a major move?
We’d love to share more about the insights received during our site selector survey, or if you’d like to learn more about our 100+ benchmarking analysis with your city measured against your top competing markets, email us at email@example.com.
Culture + Place creates location envy and develops place equity and is the economic development and destination marketing practice of Blueprint Creative Group, a strategic communications consultancy. For more information, visit BlueprintCreativeGroup.com.