The Seattle-based Internet commerce behemoth is considering building a massive second base that would create 50,000 new jobs with average pay in excess of $100,000. Jurisdictions across the country — including Baltimore, Columbia and Prince George’s County — are getting ready to engage in a bidding war.
Amazon is encouraging states and metropolitan areas to coordinate and submit one bid for an entire region. The bid can “contain multiple real estate sites” but the company encourages local and state governments to focus on the best option.
Key city and state officials are now focusing on attempting to lure the company to Port Covington in South Baltimore, where Under Armour CEO Kevin Plank is planning a $5.5 billion development that will be home of a new campus for the nation's No. 2 sports apparel company.
Plank’s Sagamore Development Co. also plans restaurants, shops, housing and manufacturing space at the 260-acre site, which is also home of The Baltimore Sun’s printing press. The Sun has a long-term lease on the facility.
Sagamore officials have been meeting with government leaders to shore up support for the site.
But does Baltimore have the environment needed to win the Amazon bid? Below we compare the criteria the company put forth in its request for proposals with what the city has to offer.
1. Amazon says it has a “preference” for a metropolitan area with more than 1 million people.
Metro areapopulation:2.8 million
While Baltimore has more than 600,000 people, the greater metropolitan area has a population of about 2.8 million.
AMAZON LOCATIONS NEAR BALTIMORE
There are currently five Amazon locations in Maryland, Delaware and Northern Virginia, including fulfillment and warehousing facilities in Middletown, Delaware; New Castle, Delaware; Baltimore, Maryland; and North East, Maryland. There is also a software development center located in Herndon, Virginia.
2. Amazon says it is seeking a “stable and business-friendly environment.”
Baltimore unemployment rate
According to the Bureau of Labor Statistics, the Baltimore-Columbia-Towson metro area ranks 167 in the U.S. in terms of unemployment rates for metropolitan areas. Maryland ranks 18th out of U.S. states for unemployment. Maryland’s unemployment rate is 3.9 percent. The national rate is 4.4 percent.
Maryland unemployment rate
Source: Bureau of Labor Statistics
After years of job losses, Baltimore’s economy has stabilized and is improving. According to state labor statistics, the city has added about 18,000 jobs over the past five years, while unemployment has dropped from 10.9 percent to 6.2 percent.
Maryland’s unemployment rate is 3.9 percent. The national rate is 4.4 percent.
Whether the city is “business-friendly” is a different question. Baltimore’s property tax rate is more than double the rest of Maryland and the city charges some fees, such as a bottle tax, that are either much higher than other jurisdictions or don’t exist elsewhere.
That said, the city has cut special deals with certain businesses that give them a highly advantageous tax rate, such as the $1 annual property tax charged to the Marriott Waterfront Hotel in Harbor East. When Amazon opened a warehouse in Southeast Baltimore several years ago, city and state officials offered more than $43 million in subsidies. So, the company has chosen to go into business here before.
Amazon’s request for bids states that special deals like those are desired: “Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process.”
“We’re really competing against other metro areas,” said William H. Cole IV, the president of the Baltimore Development Corp. “We show very favorable in terms of cost of business and cost of living.”
3. Amazon says it wants a location with “the potential to attract and retain strong technical talent.” It says a “highly educated labor pool is critical and a strong university system is required.”
Education level of Baltimore adults 25 and older, 2011-2015
Education level of Maryland adults 25 and older, 2011-2015
Source: U.S. Census Bureau
About one-third of Baltimore residents have a college degree, as do 43 percent of Baltimore County residents. The area is also home to more than a dozen universities and colleges, including the highly competitive Johns Hopkins University. The Baltimore-Towson-Columbia metro area combined to rank No. 18 on the national list of most educated cities, as compiled by WalletHub.com.
The city, however, has struggled for years to retain population, while the suburbs have grown. Last year, Baltimore lost an estimated 6,000 residents.
4. Amazon states it wants to work with “communities that think big and creatively when considering locations and real estate options.”
How Baltimore fares on this criterion will likely depend on the level of creativity in the city’s bid. Baltimore officials have worked on major development projects in the past, including helping build Oriole Park at Camden Yards, Harborplace and the planned Port Covington redevelopment.
Cole said dozens of people in city, state and local governments — as well as the private sector — are working on the Port Covington bid. City officials have already approved public financing for infrastructure there — a $660 million tax-increment-financing (TIF) deal. Under such deals, the city issues bonds to pay for project infrastructure and then pays them off using new revenue generated by property taxes on the development. It’s expected to take 40 years to pay off those bonds.
“The TIF is in place. It’s ready to go. If that’s not a demonstration that we are prepared, I don’t know what is,” Cole said.
5. Amazon also states it has a “core preference” to be within 30 miles of a population center and within 45 minutes of an international airport.
Baltimore surely qualifies as a population center, and Baltimore Washington International Thurgood Marshall Airport, which is nearby, has frequent flights to Europe, Canada and Mexico.
“You can be in downtown Baltimore and be at BWI airport in 10 minutes,” Cole says. “Do I think having an employer like Amazon will lead to more international fights? Absolutely.”
Airports in and near Washington, D.C., offer additional international flight options.
6. Amazon also wants to be located within two miles of a major highway and have access to mass transit options at the new headquarters.
The Port Covington site is located only a few hundred feet from Interstate 95. Plank’s firm recently upgraded a fleet of water taxis to transport people around the harbor.
At Port Covington, state and city officials are planning to build a $165 million light rail extension to the site. The public financing deal with the city also funds an “internal rail circulator,” and Port Covington's bike path is being built using a material that will absorb sunlight and “emit a glow at night.”
State officials also are applying for a $76 million federal grant for an I-95 interchange project at the site.
7. The company also states it would consider building a new campus in an “urban or downtown” area with a “similar layout” to Amazon’s Seattle campus. It would prefer a site that is already prepped for development.
Unlike some other cities, available space isn’t necessarily an issue in Baltimore — with some 40,000 vacant properties, the city can accommodate a large corporate campus. The city has already green-lighted a massive infrastructure investment at Port Covington.
“We firmly believe Port Covington presents the best overall opportunity,” Cole said. “That site is truly ready to go. There’s not a lot of steps it has to go through to start moving dirt there.”
In addition to a mix of housing and businesses, Sagamore Development plans to create a ring of waterfront parks at Port Covington. A whiskey distillery for Plank’s Sagamore Spirit Rye has already opened, and other plans include business incubator space, a shopping district, a hotel, apartments and a music venue.
8. Finally, the company says it is considering the “culture” and “quality of life” of the areas it is considering. Company officials say they are looking for a place that can support a “diverse population” with “excellent institutions of higher education” and local government officials who are “eager and willing” to work with the firm. “We want to invest in a community where our employees will enjoy living, recreational opportunities, educational opportunities, and an overall high quality of life,” the request for proposals states.
Baltimore is often known for crime and blight, but there’s much more to the city than that. The travel website Atlas Obscura has called Baltimore America's most eccentric city, citing Edgar Allan Poe's grave site and being the place where the Ouija board was named, among other factors.
Zagat has ranked Baltimore as high as No. 2 on its list of best food cities. And Entrepreneur magazine has named Baltimore second on a list of "Hot Startup Cities That Aren't San Francisco or New York," emphasizing its concentration of companies working in the education field.
The area offers cheaper housing than nearby Washington. And state officials have approved a $1.1 billion investment to renovate and upgrade the city’s public school buildings.
“The city has so many really incredible neighborhoods,” Cole said. “We have an arts and culture community that has such a vibrancy. We have increasing numbers in our sports and social leagues. Our diversity is one of our strong suits. You’re not going to continue to attract the millennial population we have if you don’t have those type of amenities.”