SCV in the mix in L.A.’s longshot bid for Amazon’s 2nd HQ

By Patrick Mullen

Last update: Monday, October 16th, 2017

This week, when Amazon receives bids from cities around the nation hoping to land the online retailing giant’s second headquarters complex, the Santa Clarita Valley will be among the options.

The Los Angeles Economic Development Corp. is submitting a unified bid with several possible locations.

“Based on Amazon’s express criteria, as described in the RFP released from its Office of Economic Development, as well as what we know about Amazon’s business and workforce, we believe that our region has all the assets to develop, deliver and execute on a successful proposal,” said Mark Ridley Thomas, chairman of the Los Angeles County Board of Supervisors, and LAEDC CEO Bill Allen, in a letter to regional economic development leaders, including the Santa Clarita Valley Economic Development Corp. last month convening a meeting to coordinate L.A.’s bid.

SCVEDC is joining forces with its Los Angeles counterpart to present a proposal to Amazon which includes several other potential sites in Los Angeles County, according to president and CEO Holly Schroeder.

“We certainly are participating in this process, and believe that the Santa Clarita Valley is a leading location in the L.A. region, given the availability of land, workforce and business friendliness,” she said.

At stake are more than $5 billion that Amazon plans to invest in building a second headquarters for as many as 50,000 employees. Construction and ongoing operations could create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community. Bids are due Thursday.

In choosing the location for HQ2, Amazon said it prefers a metropolitan area with more than one million people, a stable and business-friendly environment, urban or suburban locations with the potential to attract and retain strong technical talent, and communities that “think big and creatively when considering locations and real estate options.”

The company said the complex could ultimately encompass up to eight million square feet of space, starting with at least 500,000 square feet.

In the SCV, only FivePoint Holding’s Newhall Ranch, with its projected 11.5 million square feet of commercial space, is large enough to meet those space demands. The company also is developing the Great Parks Neighborhood in Irvine and San Francisco Shipyard and Candlestick Point.

“If Amazon is considering a second West Coast home, California for many reasons is the best place to build it,” said Emile Haddad, chairman and CEO of FivePoint.

“FivePoint has the land and the ability to help make this happen in all three of our markets, including the Santa Clarita Valley at Newhall Ranch. Of course we’re interested and we stand ready to do whatever it takes to help bring Amazon to the state.”

L.A.’s bid is one of at least 50 proposals Amazon is likely to receive from around the country, with Irvine and San Diego also pitching Southern California locations, and it’s seen by some analysts as a longshot at best.

Moody’s Analytics ranked metro areas based on Amazon’s criteria and economic factors. Austin, Texas ranked first, followed by Atlanta, Philadelphia, Rochester, N.Y., and Pittsburgh. Los Angeles did not make the top ten in the ranking by the economics research arm of Moody’s Corp., which looked at business environment, human capital, cost, quality of life, and transportation.

Nor did Los Angeles make it onto CNN’s list of eight cities that fit Amazon’s needs.

Results like that, along with the fact that Amazon may not want both headquarters on the West Coast, have fueled doubts about L.A.’s bid. LA Weekly’s story on the subject carried the headline, “There Is No Way in Hell Amazon HQ Is Coming to L.A.,” citing the area’s high housing costs, high state income tax and the city’s gross receipt tax (the last of which is not a factor in Santa Clarita).

Schroeder is aware that California has the perception of being not particularly business-friendly, and part of the work of the SCVEDC is to dispel that myth.

“California has been labeled as not being business friendly,” she said. “So, we need to overcome that perception. I think a company like Amazon will consider other factors. We need to emphasize the entirety of the package – the cultural element that would contribute to their success if they were in the L.A. region.”

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SCV in the mix in L.A.’s longshot bid for Amazon’s 2nd HQ

Caption: Amazon is soliciting bids for the home of a second headquarters complex that could encompass eight million square feet of space and house 50,000 employees. Courtesy photo.

This week, when Amazon receives bids from cities around the nation hoping to land the online retailing giant’s second headquarters complex, the Santa Clarita Valley will be among the options.

The Los Angeles Economic Development Corp. is submitting a unified bid with several possible locations.

“Based on Amazon’s express criteria, as described in the RFP released from its Office of Economic Development, as well as what we know about Amazon’s business and workforce, we believe that our region has all the assets to develop, deliver and execute on a successful proposal,” said Mark Ridley Thomas, chairman of the Los Angeles County Board of Supervisors, and LAEDC CEO Bill Allen, in a letter to regional economic development leaders, including the Santa Clarita Valley Economic Development Corp. last month convening a meeting to coordinate L.A.’s bid.

SCVEDC is joining forces with its Los Angeles counterpart to present a proposal to Amazon which includes several other potential sites in Los Angeles County, according to president and CEO Holly Schroeder.

“We certainly are participating in this process, and believe that the Santa Clarita Valley is a leading location in the L.A. region, given the availability of land, workforce and business friendliness,” she said.

At stake are more than $5 billion that Amazon plans to invest in building a second headquarters for as many as 50,000 employees. Construction and ongoing operations could create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community. Bids are due Thursday.

In choosing the location for HQ2, Amazon said it prefers a metropolitan area with more than one million people, a stable and business-friendly environment, urban or suburban locations with the potential to attract and retain strong technical talent, and communities that “think big and creatively when considering locations and real estate options.”

The company said the complex could ultimately encompass up to eight million square feet of space, starting with at least 500,000 square feet.

In the SCV, only FivePoint Holding’s Newhall Ranch, with its projected 11.5 million square feet of commercial space, is large enough to meet those space demands. The company also is developing the Great Parks Neighborhood in Irvine and San Francisco Shipyard and Candlestick Point.

“If Amazon is considering a second West Coast home, California for many reasons is the best place to build it,” said Emile Haddad, chairman and CEO of FivePoint.

“FivePoint has the land and the ability to help make this happen in all three of our markets, including the Santa Clarita Valley at Newhall Ranch. Of course we’re interested and we stand ready to do whatever it takes to help bring Amazon to the state.”

L.A.’s bid is one of at least 50 proposals Amazon is likely to receive from around the country, with Irvine and San Diego also pitching Southern California locations, and it’s seen by some analysts as a longshot at best.

Moody’s Analytics ranked metro areas based on Amazon’s criteria and economic factors. Austin, Texas ranked first, followed by Atlanta, Philadelphia, Rochester, N.Y., and Pittsburgh. Los Angeles did not make the top ten in the ranking by the economics research arm of Moody’s Corp., which looked at business environment, human capital, cost, quality of life, and transportation.

Nor did Los Angeles make it onto CNN’s list of eight cities that fit Amazon’s needs.

Results like that, along with the fact that Amazon may not want both headquarters on the West Coast, have fueled doubts about L.A.’s bid. LA Weekly’s story on the subject carried the headline, “There Is No Way in Hell Amazon HQ Is Coming to L.A.,” citing the area’s high housing costs, high state income tax and the city’s gross receipt tax (the last of which is not a factor in Santa Clarita).

Schroeder is aware that California has the perception of being not particularly business-friendly, and part of the work of the SCVEDC is to dispel that myth.

“California has been labeled as not being business friendly,” she said. “So, we need to overcome that perception. I think a company like Amazon will consider other factors. We need to emphasize the entirety of the package – the cultural element that would contribute to their success if they were in the L.A. region.”

About the author

Patrick Mullen

Patrick Mullen

Patrick Mullen grew up in Syracuse, N.Y., and moved to Santa Clarita from Cleveland in 2016. He covered the business side of health care for 15 years.