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Washington, DC, and Austin are shaping up as strong contenders for Amazon's new headquarters

  • As the high-profile bidding war for Amazon's $5 billion investment in a second headquarters enters the final stages, one region seems to have an edge over the more than 200 cities and counties that initially expressed interest.
  • Based the criteria Amazon identified when it kicked off the bidding last year, the Washington, D.C., area appears to be well-positioned. But it will have to knock off a few other strong contenders, including Austin, Texas.
  • CNBC looked at some of the key criteria the online retailer laid out in its pitch to cities and states.

As the high-profile bidding war to host Amazon's second headquarters enters the final stages, one region seems to have an edge over the more than 200 cities and counties that initially expressed interest.

On Thursday, the company said it had narrowed down the list to 20 locations. Based the criteria Amazon identified when it kicked off the bidding last year, the Washington, D.C., area appears to be well-positioned. But it will have to knock off a few other strong contenders, including Austin, Texas.

To get the bidding started in September, Amazon promised to invest more than $5 billion and hire 50,000 people for its new headquarters, which it says will rival its sprawling Seattle campus in size and scope. In its request for proposals, Amazon pointed to its Seattle headquarters as a sign of what it could bring to a new host city. Its workforce has grown to more than 380,000 from less than 25,000 since it moved to downtown Seattle in 2010, the company said.

In return, some 238 state and local governments lined up to offer generous tax benefits and other incentives.

"Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity," Holly Sullivan, an executive at Amazon Public Policy, said in a statement.

People walk past the signature glass spheres under construction at the Amazon corporate headquarters on June 16, 2017 in Seattle.
Getty Images
People walk past the signature glass spheres under construction at the Amazon corporate headquarters on June 16, 2017 in Seattle.

The flood of pitches from across the country included big cities such as New York and Chicago to small regions such as Lehigh Valley, Pennsylvania. Those proposals sought to highlight each city's strengths, based on the wish list the company created to help it find the perfect spot for its new campus.

That list included: a population of more than 1 million people, an international airport, mass transit, quality higher education, an educated workforce and a solid business climate.

So, to help the world's largest e-commerce company narrow down its search, CNBC looked at some of the key criteria the online retailer laid out in its pitch to cities and states.

To measure how the finalists stack up, we ranked them in five categories: local airports (based on a J.D. Power satisfaction survey), annual mass transit ridership, the number of higher educational institutions within 10 miles, the share of the workforce with at least a college degree and the pace of job growth over the last 12 months.

(Because CNBC relied heavily on data based on the Census Bureau's metropolitan statistical areas, there was a bit of overlap for Newark, New Jersey, and New York, which are both in the same MSA. The same was true for some data that covered Washington, D.C., Montgomery County, Maryland, and Northern Virginia. In those cases, the results for each factor was a tie.)

To better rank the 20 finalists, we gave each location points based on how they rank in Amazon's criteria and then added up the score. For the 20 finalists, we gave 20 points for the No. 1 rank, 19 points for the second rank, and so on.

Based on that score, some locations stand out.

Austin scored well across the board, even though it didn't rank first in any of the five factors. Among the factors that helped its overall score were a relatively high satisfaction rating for its airport, strong job growth and a highly educated workforce.

But Amazon is clearly drawn to the Washington, D.C., area, particularly two suburban regions: Montgomery County, Maryland, and Northern Virginia are on the company's list of finalists.

Still, these five factors are likely only a starting point in the company's final decision. Beyond the incentives it gets from state and local governments, Amazon will also need to secure enough land for a sizable complex. Its current Seattle campus includes 8.1 million square feet of space in 33 buildings and more than 40,000 workers.

The company said its new second headquarters would initially need more than 500,000 square feet and up to 8 million square feet beyond 2027.