Archive for October 2017

The Big Mystery: Will a Coastal or Interior City Win Amazon’s HQ2 Project

October 19, 2017

Today is deadline day at Amazon for cities and states to file their proposals to become home to the company’s second headquarters, commonly referred to as HQ2.

I can’t count the number of times I’ve been asked what decision Amazon will make. Well, Amazon isn’t my client so how would I know? Even if they were, under non-disclosure rules I wouldn’t breath a word about the company’s project.

A little speculation can’t hurt, so here goes …

I think Amazon will seriously consider metropolitan areas located in the nation’s interior. While the smaller ones won’t make it simply because the workforce isn’t there, others have characteristics that are superior – often far superior – to coastal areas.

Many people think the winning bid will be the one that offers the highest value in economic incentives, but that isn’t always the case. It’s true that incentives can be a significant factor, but not necessarily a decisive one.

At times, a community offering the most attractive incentives can lose if it fails to meet certain parameters. For example, putting a warehouse located a half-mile from an Interstate highway will beat out a community that is situated 25 miles from an Interstate.

Countless examples like that exist.

So incentives are only part of the puzzle. Selecting the optimum location is a balancing act that weighs many important factors, such as the extent of workers in the area with appropriate talents, availability of shovel-ready land on which to build, tax rates and how they are applied, and laws that regulate labor factors such as overtime — the list is a lot longer than this.

Also important are quality-of-life factors for employees, such as the cost of living (especially housing costs), quality of the local school system, traffic congestion during peak commuting times, recreational and cultural opportunities, taxes and crime rates.

I predict that one state Amazon won’t put its HQ2 is California because of the state’s harsh business and legal environment.

Just one example: Employers can be fined or sued for a mistake on a paycheck stub (not the check, just the stub). Challenges facing workers include super-expensive housing, the highest taxes in the nation and long commuting times caused in part by highway improvements that have long been neglected.

Two days ago the Tax Foundation released its 2018 State Business Tax Climate, which showed California ranking as the 48th worst state beating out only New York and New Jersey.

Next year the tax picture may worsen as California legislators again try to revise Proposition 13 to put business and residential properties into two groups – and then place still-higher taxes on all types of office, industrial and commercial property.

Legislators are motivated by plans to once again increase state spending despite needing reserve funds to pay down state and local debt that now exceeds $1.3 trillion.

So it’s little wonder that the California Business and Industrial Alliance in Sunland has placed a full-page ad in the Seattle area to warn Amazon away from locating its HQ2 in the state. According to the San Fernando Valley Business Journal, “The headline warns the Seattle online retailer that while the weather is nice in California, the business climate is not.”

All of that represents the formula for California being scratched off the list, especially because of this Amazon specification: “A stable and business-friendly environment and tax structure will be high-priority considerations for the Project.”

Since Illinois, New York and New Jersey mimic California’s awful public policies, I won’t be surprised if Chicago, New York City and Newark also disappear as candidates.

Finally, I wish I could be in Amazon’s office as each proposal was unveiled. I know this is serious business, but I also think it would be fascinating, exciting and fun, too.

Note: Three excellent stories appeared today regarding the project:

CNBC’s – Bids for Amazon’s second headquarters are due Thursday — here are the cities in the running – This story states: “Although we don’t know exactly which cities have officially submitted their proposals so far, there are more than 100 cities and counties that have expressed interest in placing a bid, according to previous reports. There could be more, as some cities are keeping their bids secret, at least through Thursday, for competitive reasons.”

Wall Street Journal – As Cities Woo Amazon to Build Second Headquarters, Incentives Are Key

PoliticoThis Is What Really Happens When Amazon Comes to Your Town.

One focus of this blog has been to address California’s perennially difficult business environment. Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions. Joe helps companies find great locations in which to grow.

Advertisements

The Person to Change the NFL’s Culture: Condoleezza Rice

October 17, 2017

This is the first time I’m digressing from site selection and location issues because – as a military veteran – I must express my disapproval of the irresponsible actions of NFL players and NFL leadership. To see why I’m departing from my usual topics, please read on….

Untold millions of football fans are angry with those in the NFL who disrespect the American flag, the national anthem and military veterans – and it started long before President Trump said a word about it.

Now we learn that league owners the players and their labor union, the NFLPA, will meet to discuss current controversies. What they don’t understand is this: No matter what they decide, many fans no longer care unless they clean house.

When an organization is dysfunctional, when it suffers from wishy-washy leadership, a major change is needed at the top. Fortunately, there are ways to restore the public’s respect for the NFL through a reorganization and putting an accomplished woman, Condoleezza Rice, at the top.

But first, let’s look to when NFL players were treated as heroes and patriots. An example is “Rocky” Bleier, who overcame serious Vietnam War injuries and helped the Pittsburgh Steelers march to four Super Bowl wins in the 1970s. Now, decades later, he continues to mingle with and be respected by military veterans around the nation.

On the field today, grown men act in ways that were unthinkable in Bleier’s day, so it’s understandable why an NFL boycott is being so fiercely and indefatigably promoted by outraged fans.

We can fix this. The late Steelers Coach Chuck Noll – who led his team to four Super Bow victories – always told his players, “You have to replace bad habits with good habits.” While he was speaking of on-field plays, I think his words are apropos to showing respect to the fans. (Think about that, Mike Tomlin.)

Who can instill good habits in football players today? Well, I’m confident it’s Condoleezza Rice. The time is overdue to make her the new NFL commissioner. Many people don’t know that as far back as 2002 she called it her “dream job.”

Several years ago, when Commissioner Roger Goodell failed to strongly penalize players involved in domestic violence, a movement began – which included diverse media outlets such as the Washington Post and Fox News – to draft Ms. Rice to replace him.

She is superbly qualified. ESPN once noted that Ms. Rice is “arguably the most interesting member of the College Football Playoff selection committee. She can talk about the national championship or national security. She can discuss the Middle East or middle linebacker.” It’s been said that “Just like she could speak Russian to the Russians, she could talk football to the football players.”

Big, hulking players have been known to surround her and listen – really listen – during her post-game reviews.

Stanford football coach David Shaw realizes that. He said of Ms. Rice – “If she ever sees us play a prevent defense, she’s going to be in my office. She hates prevent defense. She wants to be aggressive.”

Considering her experience in handling one international crises after another, she is more than capable of cleaning up a league filled with high-testosterone males who demand to do things their way and only their way. And since she’s dealt with leaders of totalitarian states whose behavior has been criminal, she can handle NFL players who have shameful criminal records.

Those players who want to inflict Harvey Weinstein-type abuse on their wives and girlfriends might want to think twice about that with NFL commissioner Rice in charge.

May we frankly address the touchy subject of race?

Ms. Rice’s role as the first African-American woman to serve as Secretary of State is relevant. Since a majority of NFL players are black, it could be helpful that she be the one to wield authority as commissioner. With her impressive background, wouldn’t many players regardless of race thoughtfully consider her viewpoints?

On a related note, I point with pride to the football team at my Pennsylvania alma mater, Slippery Rock University: They wore special uniforms in the school’s “Salute to Military and First Responders” game held in late September.

The players wore “cadet gray” uniforms, designed by Adidas, paying tribute to one of the original colors worn by cadets at the U.S. Military Academy at West Point starting in the early 1800s.

Today’s NFL could learn something about respect from Slippery Rock’s team and from players like Rocky Bleier. But first a housecleaning is in order to change the league’s culture. The person to do that is Condoleezza Rice.

Final thought: She is tough enough to push back against those who treat our national symbols with contempt. If she were commissioner, and since she is a concert pianist, she just might play the national anthem at the start of a game. Pity the player who dares to take a knee then.

This column is posted in memory of the best friend I had while serving in the U.S. Navy, Hiawatha Lee Langley, of Aircraft Squadron VS-24, who perished after being swept overboard from the aircraft carrier, USS Intrepid. As the squadron’s Personnel Clerk, I had the terrible job of doing the paperwork associated with his death. I remember meeting his girlfriend and my heart went out to her as well as to his family. After all these years, I still think of Hiawatha and wish we could have gotten together and shared life’s important moments throughout the decades. I believe that Hiawatha would join me in being incredibly offended by the vulgar behavior of NFL players who disrespect the national anthem, our nation’s flag and military veterans. Although a lifelong Steelers fan, I feel so insulted and marginalized that I don’t know how I can ever again watch another Steelers game or any NFL game. And I’m in some good company: Vin Scully, the legendary Los Angeles Dodgers sportscaster (who earlier did broadcasts for the Brooklyn Dodgers and New York Yankees), said in November that he’ll “never watch another NFL game again” because of the protests. For the record, Hiawatha is buried at Langley Family Cemetery (Beulah Twp.), Johnston County, North Carolina. Jan. 30, 1945 – Jan. 16, 1965. RIP Hiawatha.

Joseph Vranich is known as The Business Relocation Coach while the formal name of his business is Spectrum Location Solutions.