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By Nick Wakeman

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Nick Wakeman

DC region makes strong showing in Amazon 'HQ2' sweepstakes

In September, I made a case for why Amazon should consider the Washington, D.C. area for its second headquarters location. Looks like maybe they were listening.

The company said today that three regional locations are on its list of 20 possible areas: Washington itself; Northern Virginia and Montgomery County in Maryland.

Of course, I do not think they made their decision based on my blog post. Heck, I doubt anyone working on the project read it.

The logic of picking the D.C. area is pretty self-evident: lots of talent, three airports and a robust communications infrastructure. Plus that it is home of one of Amazon’ biggest customers in the federal government.

Now comes the the hard part.

The D.C. region is in a strong position with three spots on Amazon’s list. If local leaders were smart, they would quickly resolve several issues that would strengthen their hand.

The biggest being the need for more cooperation on issues such as Metro funding and other transportation-related matters.

If one of the three D.C.-area locations gets picked, all three will benefit. This should be an incentive to cooperate and that would help the entire region whether or Amazon comes here.

Whatever the location Amazon picks, the impact will not be immediate. It will take several years for Amazon to build out what it envisions -- 50,000 jobs and 8 million square feet of office space.

These are expected to be high-paying jobs and will increase the competition for people.

In a region dominated by federal contractors, the long-term impact of Amazon on employment will likely be huge. We could see wages and benefits go up. More skilled people will come to the area. We should see more business locate or open facilities here to serve Amazon.

But other cost-of-living items will likely also increase.

Some Seattle residents have blamed Amazon for driving housing prices up as well as stressing the city’s infrastructure.

The D.C. area already has these problems. So in addition to the tax breaks and other incentives, perhaps addressing some of those issues could be enticing to Amazon.

The company has set no deadline for a final decision. They will talk more with representatives of these 20 sites and I am sure there will be another down-select in the coming months.

I think the D.C. region will be in the running until the end and I say that because of the federal government. Amazon’s commitment to the federal government continues to grow. They show it in the investments they are making.

The government is only now scratching the surface with cloud computing. They also are looking at faster and more efficient ways to buy products. Both of those play to Amazon’s strengths.

Locating in the D.C. region is not about trying to make its biggest customer happy, but it will be a huge indication of how important the federal market is to Amazon.

Either way, the competition for Amazon’s "HQ2" is fun to watch.

Posted by Nick Wakeman on Jan 18, 2018 at 10:54 AM


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