(TNS) -- Amazon.com launched a nationwide search Thursday for a place to plant a second headquarters, and its ideal spot sounds a lot like the Bay Area: a metropolitan region with plenty of public transit, an international airport, good universities and strong allure for technical talent.
But the Seattle company is looking far beyond Silicon Valley, where it already has a handful of outposts, and soliciting bids from across North America. The announcement set off a scramble among cities to score the massive development — which could be as big as 8 million square feet, cost as much as $5 billion to develop, and employ up to 50,000 people making an average salary of $100,000 a year.
Among them is San Jose, which plans to make a bid, city officials said.
“This is going to be a feeding frenzy of epic proportions,” said Aaron Renn, a fellow at the Manhattan Institute for Policy Research, a think tank focused on urban affairs. “This will be interesting to see: Do they locate in a traditional high-cost coastal market? Or are they looking to go more into the interior of the country?”
Amazon CEO Jeff Bezos said the company plans to make the second headquarters — dubbed HQ2 — “a full equal” to its Seattle home base, which employs more than 40,000 people. Amazon said its investments in Seattle added $38 billion to that city’s economy from 2010 to 2016.
The company will accept project proposals until Oct. 19, giving cities relatively little time to pull together complex plans.
Besides San Jose, several cities around the continent have expressed interest in bidding for the project, including Chicago, Nashville, Washington, Toronto and Vancouver.
“Every city is like ‘Me! Me! Me!’ But they should be careful what they ask for,” said James Thomson, a former Amazon executive turned e-commerce consultant. “If Amazon shows up with that many people ... what is that going to do to the cost of real estate?”
San Jose Deputy City Manager Kim Walesh said winning the development would be a “pretty exciting opportunity” for San Jose, which is already home to tech companies including Cisco and Adobe, and is planning for a new Google complex downtown near the Caltrain station.
“On the face of it, some of their requirements are a direct hit with what San Jose has to offer, in terms of technical talent” and major roadways, Walesh said.
Oakland Mayor Libby Schaaf and San Francisco Mayor Ed Lee said in separate statements that their cities will explore bids for the project, but also address the impact that a project like this could have on housing affordability.
The technical specs for HQ2 include a city that is 45 minutes or less from a large international airport; has access to mass transit; and is near a “population center.” It will give preference to cities that can attract and retain technical talent, and that have a “stable and business-friendly environment.”
But Thomson said Amazon is unlikely to move into a city like the Bay Area where it will have to compete for talent: “They want to be the only game in town,” he said.
The Bay Area has 328,070 tech workers, the biggest such pool of talent in North America, according to a report from CBRE, a commercial real estate brokerage. The next largest is New York with 246,000 workers. Others in the top 10 are Washington, Toronto, Dallas, Chicago, Boston, Los Angeles, Atlanta and Seattle, Amazon’s current home.
Being a magnet for highly skilled software programmers has brought with it high housing prices, traffic and widening inequality. Given those problems, some experts are skeptical Amazon will choose a site in Northern California.
On top of the strain on resources such as housing and transport, simply making room for Amazon may be the biggest hurdle for cities.
The company, a major tech employer in the Bay Area, already has 3 million square feet of commercial space here, the majority in Sunnyvale. In San Francisco, it has 500,000 square feet, including multiple offices and a distribution hub for its Prime Now same-day delivery service. Local employees work on Kindle tablets, the Alexa voice-recognition service, and Twitch, a video-game streaming site, among other projects. The company is hiring for almost 1,000 positions in the region.
San Francisco is an unlikely choice for expansion, because of the lack of land suitable for development, coupled with high housing costs, taxes and restrictions on building. There are no sites in the city where 10 million square feet could be built — unless the company strung a campus along the waterfront with 3 million to 5 million square feet of buildings at Hunters Point, 2 million square feet at Pier 70, and another million square feet at Mission Rock, the Giants’ planned development across Mission Creek from AT&T Park.
Matt Regan, senior vice president of public policy for the Bay Area Council, said that several former military bases in Northern California — such as the Concord Naval Weapons Station, which has a nearby BART station — could work as an Amazon headquarters.
Another barrier to a Bay Area bid may be Amazon’s need to build political goodwill by adding jobs in more parts of the country. The e-commerce giant, which has faced criticism for taking jobs away from booksellers and other retailers across the country, has touted its hiring for warehouses and fulfillment centers coast to coast. But others are skeptical that such a move will attract the talent it needs.
“This whole rise of the rest is bunk — it’s wishful thinking,” said Richard Florida, an American urban studies theorist and author of “The New Urban Crisis” said. “To make this work, you’ve got to go to a place where people like you want to go to. Talented people want to be in great cities.”
©2017 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.