Learning from HQ2 NYC
Last week, Amazon wrote another chapter of its HQ2 thriller when it rescinded an earlier decision to make New York City part of its headquarter expansion. New York has bounced back from much bigger problems in the past so it will probably survive this as well. Besides, it will likely add as many jobs as Amazon was promising in the next ten years without much fanfare.
So how does what ended up not happening in New York provide a teaching moment for what should happen in the rest of the country? One thing is clear, the economic development paradigm has shifted. Here are four approaches we take to capitalize on this shift:
1. Place is still king
Amazon chose New York City in large part because of talent and the neighborhood. It was not only because of incentives, or at least, not because of New York’s incentives, as they were a third to half of other options they had. And while there is only one New York, scores of cities can go toe to toe with it on place fundamentals if they only recognize that they have them. Walkability, funky historic building types and diverse cultures not only attract outside companies looking to move, they also just so happen to be places where new companies begin.
2. Neighborhoods are where it’s at
Amazon did not choose New York City’s Financial District or Midtown Manhattan. They did not even go to Brooklyn. In Washington, they went outside of the District and into what are essentially northern Virginia neighborhoods and subdistricts to DC. In Pittsburgh, Google went to East Liberty. Across the country, firms big and small are choosing to be in neighborhood centers as the alternative to downtowns or waterfronts. This trend is even more pronounced when we include densifying suburban locations. Neighborhoods provide an attractive alternative to our downtowns as downtowns become more residential, their building stock ages and the cost and complexity of doing development there increases.
3. Unleash the mid-size firm and building type
With a move to neighborhoods, more and more cities are seeing the value once again in small and midsize firms. As they do so, the small and mid-size building types (ie the garages, small warehouses, etc.) are also gaining more attention. Many mid-size firms over one large one provides a bigger boost to the economy, more jobs and more resilience should changes occur. Practically speaking, supporting these types of developments is easier, require fewer changes to existing infrastructure and typically need much less moonshot financial assistance from the public sector.
4. Be smart with incentives
The cities leading the charge are those that are finding attainable and quicker ways to unlock walkability, building reuse and diversity of culture. They strategically support neighborhood development corporations, flexible land uses and small developers in their neighborhoods. And they are working across sectors to support mid-size firms, entrepreneurship (particularly minority) and the removal of barriers that allow small-scale risk takers to hit the market.