What The Amazon Deal Will Tell Us About Texas

The fight is on in Texas and across the country for what the ubiquitous corporate giant Amazon is calling HQ2 — its 2nd corporate headquarters in the U.S.

And the purse will be enormous: about $5 billion in capital investment and 50,000 jobs with a six-figure average salary.  Add to that the potential to ‘cluster’ related technology jobs and it’s easy to see the reason for the frenzy.

Austin, Greater Dallas, El Paso, Frisco and Houston have submitted proposals;  Amazon is expected to make a decision in the 1st Q of 2018.

So.. what are the prospects for Texas in this competition for an economic whale?

Some are touting the Texas connections of founder Jeff Bezos. He spent his childhood in Houston while his dad worked for Exxon and his cousin is George Strait, who you may have heard sing some country and western tunes.

And..  Amazon already has about 20,000 employees in Texas who, we trust, can attest to the wonderfulness of the Lone Star State.

But in fact it’s mostly a business decision.

Attributes like workforce size and skill, location, and essential infrastructure will decide it, along with the tax and regulatory environment, economic development incentives, and workforce training and education.   Quality of life and other cultural and recreational amenities will be considered along with affordable housing, cost of living and the quality of the public schools.

Amazon’s RFP says, “the project requires a compatible cultural and community environment for its long-term success. This includes the presence of a diverse population, excellent institutions of higher education, local government structure and elected officials eager and willing to work with the company..”

This is likely the template for future large corporate expansions and re-locations and Texas generally stacks up well.

As we look ahead.. business and elected leaders are preparing for Texas’ future through emphasis on skills-based education and workforce development, infrastructure capacity (physical and virtual assets), ‘smart cities,’ access to capital for entrepreneurs, and tools (read: incentives) to stay competitive.

Texas will have stiff competition from other cities and sealing the deal will almost certainly include incentives and require a collaborative state-local effort.

In Texas that will include a package that includes the Texas Enterprise Fund (Governor Abbott) and local tax abatement and of course our pro-business, pro-growth policy climate.

The opening bell has rung on the Amazon deal.

How will this battle end?  Starting with a strong team led by Governor Abbott and great professionals throughout the regional and local economic development ecosystem, Texas has done it before and is well-positioned to do it again.

We can only hope Mr. Bezos doesn’t have any exes here.


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