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Charlotte vs. Raleigh: Which would Amazon choose?

By Katherine Peralta

kperalta@charlotteobserver.com

September 28, 2017 07:00 AM

Amazon.com is about to be inundated with proposals from dozens of cities vying to be home to the tech giant’s second headquarters. It may be a pipe dream, but let’s imagine for a moment that Amazon whittles its massive list down to Charlotte and Raleigh/Durham, the two biggest North Carolina metro areas submitting bids.

Bear with me here. I realize Amazon is not sharing its thought process, but let’s assume for a moment that the company wants to have its new campus on the East Coast, in a different time zone from its Seattle offices. Let’s assume a relatively low cost of living is an important factor.

Perhaps then it could come down to Charlotte’s Bojangles’ and banks versus the Raleigh/Durham’s scientific research and college basketball. The Charlotte Chamber and Charlotte Regional Partnership are organizing Charlotte’s bid, complete with its own new social media campaign. The Research Triangle Foundation, the not-for-profit that manages Research Triangle Park, is behind Raleigh’s bid.

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Generally speaking, both Charlotte and the Triangle check off the boxes of Amazon’s top preferences: Both have metro-area populations of at least 1 million people, both have international airports, both have major highways and both have “business-friendly” environments.

Raleigh/Durham and Charlotte – like other cities that meet Amazon’s basic requirements – will therefore tout their “intangibles,” or the unmeasurable qualities that give each metro its personality and make them attractive for a massive project like Amazon’s, said Mark Sweeney, senior principal at Greenville-based McCallum Sweeney, a firm that consults on site selection.

Besides BBQ and NASCAR, Charlotte – which The New York Times nixed from its list of prospective cities for its lack of “cultural edginess” – has both an NFL and NBA team, nearly three dozen craft breweries, a booming apartment construction industry and an expanding rail line. All of those features are a draw for the kind of young professionals Amazon wants to recruit.

Raleigh/Durham will tout its own breweries, foodie culture, music festivals, and sports teams, especially ACC basketball, according to Michael Pittman, vice president for marketing and communications at the Research Triangle Foundation, which is putting together a proposal for Amazon.

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“Really every project to some extent has an intangible or a subjective element to enter into the decision. Headquarters projects maybe more than others, such as industrial projects, because it’s so strategic and so focused on people and recruitment on a long-term basis,” Sweeney said.

This isn’t the first time two North Carolina cities vied against each other to land a major project or group. Charlotte and Raleigh submitted separate bids for a Major League Soccer expansion team, for instance.

The MLS bidding process has been done publicly like the Amazon deal, but normally the process of bidding for a new headquarters is done behind the scenes, said Ronnie Bryant, CEO of the Charlotte Regional Partnership. He declined to comment on specifics of the Amazon proposal, which is due Oct. 19.

“We feel that we can make or exceed all the expectations outlined by Amazon, and we’re putting together a very competitive package,” Bryant said.

The Triad is also submitting a proposal. Bob Leak, president of Winston-Salem Business Inc., is working with Piedmont Triad Partnership to put together a bid for Greensboro and High Point.

I’ll stick with a Charlotte/Raleigh comparison, however – the state’s two biggest metros have also been cited by other national publications as possibilities.

One Wells Fargo Center (left) and the Bank of America Tower in uptown Charlotte
DIEDRA LAIRD Charlotte Observer

Strengths

“It wasn’t my call to rule out Charlotte,” said University of Illinois economist David Albouy, whom the Times consulted for the story that mentioned the city’s lack of “cultural edginess.”

“Edginess comes at a high cost sometimes,” he added.

That said, both Charlotte and Raleigh have relatively affordable housing markets compared with other large East Coast cities like Washington, D.C., or Boston. That will only help Charlotte and Raleigh – Amazon says its new headquarters would add up to 50,000 new jobs.

“If you’re a bargain hunter, you’re not going to be happy buying the most expensive thing in the store,” Albouy said of Amazon.

One big advantage Raleigh has over Charlotte? Close ties and accessibility to top research universities – Duke, UNC Chapel Hill and N.C. State – that can offer intern programs, research, and innovation/incubation centers on or nearby their campuses, Pittman noted.

Half of the Triangle population has a bachelor’s degree or higher, making the region one of the top 15 most educated metros in the U.S., he added.

Charlotte’s sole research university is UNC Charlotte, so the city will have to play up other strengths, including the city’s ability to draw talent from universities all over the southeast – including Clemson, UNC, NC State, Duke and University of South Carolina.

“The ability to recruit in Charlotte would be presented as a means of sort of overcoming this (lack of work-class research universities) right on top of each other,” Sweeney said.

Charlotte and Raleigh’s locations could also give them a boost over cities susceptible to hurricanes, such as Miami, or with extreme winters, such as New York.

“The most important thing is climate and geography. At least when you’re looking at a whole metro area, what matters is how mild are the summers, how warm are the winters,” Albouy said.

The downtown Raleigh skyline seen from South Saunders Street in on Dec. 27, 2015.
Al Drago Al Drago

Weaknesses

Charlotte may have a young, fast-growing population and a typically progressive political agenda, but the city is still in the Bible Belt – a far cry from Amazon’s funky hometown, Seattle.

Charlotte’s heavy on country clubs and chain restaurants, but light on big music festivals and a film industry. It’s also been criticized for tearing down old, historical buildings to make way for new construction.

“It’s a little more conservative culturally, at least that’s the perception,” Albouy said of Charlotte.

House Bill 2, North Carolina’s controversial LGBT law, was repealed last spring, but its lingering impact may still weigh on the state’s reputation.

But Sweeney said if HB2 were still on the books, it’s “hard to imagine” a company like Amazon even considering locating in North Carolina.

Another potentially large drawback? Neither Charlotte nor Raleigh have the mass transit Amazon might be looking for, either.

Still, one of the biggest pieces of the proposal Amazon will consider are the incentives and tax breaks each city will offer.

North Carolina is supporting proposals from both Charlotte and Raleigh, according to the state Commerce Department.

“We promote the state of North Carolina as a whole and never favor one county or region’s bid over another. The governor’s office, Commerce and others are working closely with local communities that are interested in submitting proposals for the Amazon HQ2 project and we expect to be very competitive,” N.C. Commerce Sec. Anthony Copeland said in an emailed statement to the Observer.

How exactly does Amazon organize the review process? Does it have a special team that will meet in a war room for the next several months to narrow its list of prospective cities?

As is often the case with the tight-lipped company, Amazon declined to elaborate.

Katherine Peralta: 704-358-5079, @katieperalta