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VOL. 133 | NO. 14 | Thursday, January 18, 2018

Memphis Out of Running for Amazon's Second Headquarters

By Patrick Lantrip

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Memphis is out of the running for Amazon’s massive second headquarters. The Seattle-based ecommerce giant released a list of 20 finalists Thursday, Jan. 18, out of the 238 proposals submitted by cities across the United States, Canada and Mexico.

While Memphis did not make the cut for the HQ2 project, Tennessee is still in the running, as Nashville was named one of the 20 cities.

“Getting from 238 to 20 was very tough – all the proposals showed tremendous enthusiasm and creativity,” Amazon Public Policy representative Holly Sullivan said in a statement. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

Finalists for Amazon's second headquarters

Atlanta, GA
Austin, TX
Boston, MA
Chicago, IL
Columbus, OH
Dallas, TX
Denver, CO
Indianapolis, IN
Los Angeles, CA
Miami, FL
Montgomery County, MD
Nashville, TN
Newark, NJ
New York City, NY
Northern Virginia, VA
Philadelphia, PA
Pittsburgh, PA
Raleigh, NC
Toronto, Ontario
Washington D.C.

Amazon announced in September it planned to invest $5 billion in a second headquarters that would create as many as 50,000 “high-paying” jobs. The announcement launched a fierce competition among cities interested in the project, with many of them rolling out incentives and creative marketing stunts to attract the online retailer’s attention.

Memphis’ bid included $60 million in monetary incentives – $50 million in labor reimbursements and a $10 million investment to upgrade the city’s transit and workforce infrastructure – along with a 30-year tax abatement. The state of Tennessee, meanwhile, offered a set of incentives common to all the sites statewide making a bid.

Memphis City Council chairman Berlin Boyd said the absence of Memphis from the short list points up shortcomings, and that the state incentives could have been better.

“We were aggressive. I think if we had a little bit more support from the state from their incentives for attracting Amazon, we would have been a little bit more competitive,” he said Thursday at a taping of the WKNO-TV program “Behind the Headlines.”

“It also gives Memphis an opportunity to start re-evaluating and looking at ourselves – looking at ways we can improve,” he added. “We do have some issues that we need to address, such as public transportation. It’s an opportunity for us not to give up and not to lose hope but to actually start improving on the things that we may need to improve on to become a bit more aggressive and competitive to seek major sites like Amazon.”

Instead of pinpointing one specific site in its proposal, Memphis offered multiple options around Shelby County, including one site in an unincorporated area in the northern part of the county.

County Commission chairwoman Heidi Shafer said the city’s decision to end new sewer connections announced this past August may have been a factor in Amazon’s decision.

(Oliver Mehlis/picture-alliance/dpa/AP Images)

“One of the issues the county is going to have to grapple with is whether it is the fee payers in unincorporated (Shelby County) who would be responsible for a new sewer – whether they are going to be willing to bear the $40 million it would take to build a new sewer treatment plant,” she said during Thursday’s “Behind the Headlines” taping. “I do think that having that disconnect and having some uncertainty … not having that sewer be a sure thing didn’t make us look good.”

Though the city’s bid wasn’t successful, Memphis Mayor Jim Strickland pointed out benefits of making the proposal.

We came together and gave it our best shot,” Strickland said in a statement Thursday. “The good news is that this exercise showed us new ways to showcase our city that we are already using to attract other businesses.

“Memphis has momentum and other companies have seen and will continue to see our value.”

Memphis did get a small nod from Amazon in October when the company confirmed plans for a $72 million “receive center” on Holmes Road that will collect and repackage products for distribution to Amazon fulfillment centers across the country. Construction is now underway.

The project will create 600 jobs, but they don’t pay the white-collar wages that many workers at Amazon’s HQ2 will receive. The average base salary of the new jobs, not including benefits, is around $29,000.

The Memphis receive center will join Amazon’s five other Tennessee fulfillment centers, located in Chattanooga, Charleston, Lebanon, Murfreesboro and Nashville.

Daily News senior reporter Bill Dries contributed to this report.

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