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September 4th, 2018

For the past year, Angelos Angelou has faced the same question time after time. He’s come to expect it in calls with journalists, or when talking to fellow economists and business partners. 

Where will Amazon build its second headquarters? 

It’s been one of the biggest questions of the business world since Sept. 7, 2017 -- the day Amazon announced plans for its giant project. 

The company publicly invited every North American city to bid for the development, promising them that its eventual pick would receive $5 billion in investment from the company over 15 to 17 years, along with up to 50,000 high-paying jobs. 

“We look forward to working with you,” Amazon told cities in its request for proposal for the development it has called HQ2. It also boasted that its investment in its hometown Seattle had pumped $38 billion into the local economy from 2010 to 2016.  

Since then, however, a year’s worth of days have passed. 

As the process has gone on, with little public comment from Amazon, the tension level has continued to rise.

"This has been going on for so long that everyone is just anxious to figure out who Amazon is going to pick," said Angelou, the head of Austin-based economic consultancy Angelou Economics. "There will be quite an amount of debate in the community that wins it about the opportunity, but also the challenges."

The race for HQ2 began intensely. City leaders across the country tried to publicly sway Amazon to pick their locations. New Jersey Gov. Chris Christie proposed $7 billion in tax incentives. Chicago created a 600-person HQ2 committee. The University of Texas at Dallas offered Amazon 100 acres. Stonecrest, a Georgia city near Atlanta, proposed to rename part of its incorporated area after Amazon.

By January, the online retailer had whittled a list of 238 initial bids to 20 finalists -- with Austin and Dallas among them.

But even for cities left off the list of finalists, Angelou said, the exercise provided some benefit.

"It forced a lot of communities to look internally and try to put teams together," he said. "For the first time, many cities are engaged in regional economic development."

Jay Janner/American-Statesman Angelos Angelou of Angelou Economics on Friday, August 31, 2018.  

As the selection process has continued, Amazon has faced skepticism -- and criticism -- over the company’s desire to receive taxpayer-funded incentives, and over the possible impact HQ2 would have on the city where it locates.

In Austin, national polls, social media discussions and even talk from city leaders has throughout the year revealed concerns from local residents.

Residents have indicated they worry HQ2 could exacerbate traffic problems on Austin’s already congested roadways, threaten its quirky culture and increase the cost of living in the city. 

Similar debates have arisen nationwide. Seattle's housing costs have climbed sharply as Amazon has taken over its downtown, causing residents of many cities bidding for HQ2 to wonder if the same fate could await them.

Elected officials have also questioned Amazon’s trustworthiness. Throughout the past year, officials in the nation’s capital and throughout the country have debated whether major tech companies such as Facebook and Amazon have too much power (Amazon is worth about $975 billion).

Among the critics has been Austin City Council member Leslie Pool. She has spoken out about the impact such a large development could have on Austin’s quality of life -- and about the secrecy continuing to shroud the project.

Like many of the other bidding locations, Austin’s regional proposal was submitted by the local business chamber of commerce, which isn’t subject to open records laws since it is not a public entity. Amazon also made bidders sign non-disclosure agreements.

That has left the details of the area’s pitch to Amazon unknown even to city leaders like Pool. 

“It was a feat of marketing to have all of these municipalities throw themselves at the feet of Amazon … without Amazon having to put much skin in the game,” Pool said. “Local leaders in the private industry didn’t include the very public (city council) that will be responsible for making good on whatever promises were made (to Amazon). We’re supposed to be partners.”

Austin’s ambivalence toward HQ2 began early with Austin Mayor Steve Adler’s office. 

Unlike city leaders elsewhere -- such as Dallas Mayor Mike Rawlings, who has loudly invited Amazon to his city -- Adler has taken a more low-key approach. The most he has said is that Amazon and Austin could benefit each other by creating mutual solutions for issues such as transportation.

In a recent interview with the American-Statesman, Adler said that his position hasn’t changed.

"I've spent 40 years in this city, and the city's views on these subjects have been pretty consistent over that time," he said. "We lead with our values and culture and seek to preserve that."

Deborah Cannon/American-Statesman A giant A sits in a corner at the Amazon offices near the Domain in North Austin on Wednesday, September 14, 2016. 

Regardless, none of Austin’s equivocation has kept it out of the HQ2 spotlight. 

The Austin metro area continues to appear in published rankings and analysis as one of the favorites to land the development. 

The area’s tech culture, friendly business climate, livability and talent pool has been seen by some industry experts as a good match for Amazon.

A reminder of that desirability was on display recently.

Last month, the U.S. Army opened its first Futures Command high-tech center at the University of Texas System’s headquarters in downtown Austin. 

The center will work on modernization projects for the military branch alongside tech startups and university communities and a have an annual budget of $80 million to $100 million. 

Much like the HQ2 competition, Army officials weighed hundreds of options before landing on Austin. 

Gen. John Murray, the commanding general of the facility, said at the activation ceremony on Aug. 24 that Austin was an easy choice. In the city, he said, the Army saw “the talent, entrepreneurial spirit and access to key partners” that would bring success to the branch’s endeavour. 

Whether a similar outcome awaits Austin in relation to HQ2, only Amazon knows -- at least for now.

Top photo: Downtown Austin on Wednesday, February 7, 2018. (Jay Janner/American-Statesman)

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