Amazon has announced plans to open a second headquarters in North America that will employ as many as 50,000 workers.
The company announced Thursday that it is searching for a city to host the new “HQ2” facility, which will cost at least $5 billion to construct and operate.
“We expect HQ2 to be a full equal to our Seattle headquarters,” said Amazon CEO Jeff Bezos. “Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”
Amazon said it would prefer to open the headquarters in a suburban or urban area with more than 1 million people. It’s looking for a community that “thinks big” and a location that will attract technical talent.
The company said that while it would hire teams and executives for the new location, employees who currently work in Seattle would be offered the chance to relocate.
Cities and regional economic development organizations have been invited to submit proposals, and they will likely scramble to offer incentives and tax breaks for Amazon to consider their area.
Could Indianapolis be considered?
On Friday, a spokesperson for Indianapolis mayor Joe Hogsett sent FOX59 this statement:
“Indianapolis continues to receive national attention as a rising tech hub, helping to drive innovation and growth for local and global businesses. That’s why we are very excited to engage with state leadership and Amazon to encourage the growth of their already successful presence in our city.”
“I think Indianapolis, central Indiana, Indiana are in good standing to compete for this if they want to,” said Mohan Tatikonda, professor of operations management at the IU Kelley School of Business.
Amazon already employs around 9,000 people in Indiana at fulfillment centers.
“It’s a reasonably long-standing relationship and a positive one,” Tatikonda said. “And that helps when you think of multi-decade commitments with new headquarters.”
The company released a detailed list of characteristics it is looking for in a new headquarters location including a highly educated workforce and strong university system.
“We have certainly built up our tech workforce, IT and related technologies,” Tatikonda said. “And we can grow there. Between IUPUI with 35,000 students in downtown, IU Bloomington flagship, Purdue, Ball Stat and others – we have a good university infrastructure to support a company like this.”
The retail giant also describing a need for proximity to an international airport. The Indianapolis International Airport would be able to fill that need with direct flights to New York, Washington D.C., Seattle and San Francisco.
Tatikonda said the cost of living in central Indiana could be a plus.
“Seattle is a wonderful place but rents are twice or thrice what they are Indy,” he said. “Our salaries here are lower than they are in San Franscisco, Seattle Boston and New York. When we’re talking about 50,000 employees – that adds up and that does make a difference.”
But, filling those 50,000 could be a challenge. Amazon is looking for a metropolitan area with more than one million people.
“The Indy metro certainly meets that but I would say we’re in the lower bound population-wise,” Tatikonda said. “I don’t think Amazon would consider an area that has a smaller population.”
Amazon estimates that its investments in Seattle from 2010 to 2016 added $38 billion to the city’s economy. These investments include retail space in its buildings and public spaces such as parks. Its headquarters in Seattle boasts 33 buildings and 24 restaurants or cafes. It covers 8.1 million square feet.
The announcement of Amazon’s second headquarters is a part of a larger effort from Amazon to grow its footprint at home and abroad.
In January, the company announced plans to create over 100,000 new full-time jobs in the U.S. It’s been steadily announcing new fulfillment centers.
Amazon also recently closed its $13.7 billion deal to buy Whole Foods as it expands into the groceries market and brick-and-mortar stores. Meanwhile, it will start selling its branded smart home devices at Amazon bookstores and retailers like Kohl’s soon.