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Friday, November 3, 2017

On paper, Detroit not likely to host Amazon HQ2 — but that doesn't mean it can't happen

Posted By on Fri, Nov 3, 2017 at 11:21 AM

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Detroit is not primed to host Amazon's much-ballyhooed second headquarters — despite our slick, dramatic pitch video and an Inc. magazine analysis placing us in the top five likely contenders.

At least that's according to a new study by marketing research company Reis, which lists the top 25 likely contenders. Detroit didn't even make the list.

Reis says they measured data points including access to public transportation, cost of doing business, cost of living, technology and professional labor force concentrations, quality of living amenities, access to higher learning, and business taxes to rank the top 25 cities, which are:
1. New York City
2. San Francisco
3. District of Columbia
4. Seattle
5. San Jose
6. Suburban Virginia
7. New Orleans
8. Boston
9. Rochester
10. Chicago
11. Omaha
12. Philadelphia
13. Cincinnati
14. Pittsburgh
15. Denver
16. providence
17. Syracuse
18. Colorado Springs
19. New Haven
20. Westchester
21. Suburban Maryland
22. Salt Lake City
23. Raleigh-Durham
24. Richmond
25. Chattanooga
However, the company conceded that it was merely a "neutral analysis" — no variable was weighted more than another. "The reader can take the data and apply their own weights," they wrote.

They also acknowledged that the decision "could come down to factors not listed in this analysis," including "tax incentives granted by the city/state, the 'creativeness' of the location, other immeasurable qualitative features and/ or an underlying preference on the part of the decision makers for such things as access to skiing, a lake, river or ocean."

"It will be interesting to see how these rankings change in five or ten years, and it will be interesting to learn which city Amazon selects and why," the report concludes.

With that considered, Detroit could actually be more enticing to Amazon than it looks on paper. For one, there's a public relations factor that you can't get anywhere else — the e-commerce giant could be seen as playing a part in Detroit's recent "comeback city" narrative. Plus, the city and region have shown a liking to offering generous tax subsidies for corporations — see the sweet deal for Little Caesars Arena and the so-called "Gilbert bills" that will help Michigan's richest resident pay for the state's tallest skyscraper.

The Amazon bid committee led by that richest resident, Dan Gilbert, has been tight-lipped about the possible incentive package outlined in the application submitted to Amazon last month. Last week, Detroit Mayor Mike Duggan refused to answer reporter questions on the issue, joking (uh, right, guys?) that his boss, Gilbert, "would fire" him if he divulged too much.

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