Let’s get real about what would happen if Philly actually got Amazon HQ2

Take it from Seattle resident Chris Beiter: Amazon changes things, and maybe not for the better.

Spotted: Philadelphia is plastering its pitch for Amazon on Seattle buses. (Photo by Chris Beiter)
This is a guest post by Chris Beiter, a senior software engineer at DocuSign.

Just days after I grudgingly moved back to Seattle from Philadelphia last year to continue my tech career, Seattle’s new economy mega-employer Amazon announced that they were looking for a city in which to establish a second headquarters.

Instantly, I thought of Philly, its great location, affordability, culture and its tech scene that seems primed for a major breakthrough.

After thinking about it for a few weeks, I churned out a column about it that was part cheer-leading love letter, part wake up call for Philly regional leaders, and more than a little bit of reverse psychology for anyone from Amazon that might read it.

On a whim, I contacted Philly to see if they had any interest in it, and hours later they had me reviewing a final draft that was cleaned up so nicely it made me look like I actually know what I’m talking about!  Thankfully, it received mostly positive feedback, except for that guy from Pittsburgh who whined that it’s always about Philly and never Pittsburgh. OK, dude, it’s a blog about the Philly tech scene, go write your own column!

But congrats nonetheless to our sister city in southwestern PA that, along with Philadelphia, also made the HQ2 shortlist. They certainly deserve it given their vibrant tech scene, and I’ll be cheering for them just like I cheer for the Steelers when the Eagles aren’t in the playoffs. But in this case they are both in, and might even meet in the Amazon Bowl, so for now it’s Eagles, um I mean, Philly all the way.

But I promised a follow-up column if Philly made the short list to revisit a different question: What if Philadelphia gets what it wished for?

What if the city wins, and a multibillion-dollar company traipses into town, commandeering scarce local resources, with the city pinning its hopes on the thousands of jobs and billions of bucks in indirect tax revenue?

There will be downsides

Well, let me break some bad news for you. You already knew Eagles ticket prices are going to be more expensive next season after their Super Bowl run. Imagine if you have to compete with 40,000 highly paid, mostly young (20s–40s), mostly male (upwards of 80 percent) Amazon employees for tickets?

Yup, you’ll be paying what we pay out here for Seahawks tickets now. Gone are the days when I would ride my bike down to the CenturyLink Field to find a scalper dumping Seahawks tickets at less than face value. I’m a little ashamed to say how much I paid for a pair of tickets to the Seahawks–Eagles game last December.

The Seattle region’s hallmark is its proximity to the great outdoors. With Microsoft, Amazon, Nordstrom and Starbucks buttressing the blue-collar employment engine of Boeing over the last two decades, the distance to those national parks, mountains and shorelines is further than ever. A drive to the Bavarian-styled mountain town of Leavenworth, Wash., used to take three to four hours in bad traffic. Now? You might be stuck in six hours on your return trip.

So if you think that traffic to the Jersey Shore is bad now or that backup at the Lehigh Tunnel coming from the Poconos? Adding 40,000 employees with families means a lot more people on the roads on those scorching summer weekends, and you’ll be waiting along with them. Honestly, just get ready to wait in longer lines everywhere.

Amazon’s Seattle headquarters recently relocated to the South Lake Union neighborhood at the base of Capitol Hill, Seattle’s traditional gayborhood, pricing up and pricing out folks from one of the best locations for those who rely on public transit. Hordes of Amazonians have taken over old haunts on the hill. Low-income housing gets replaced with “market rate” housing, hate crimes rise as cultures clash and homelessness is more apparent. And it’s not just these close-in neighborhoods. Put a pin in the map where Amazon’s campus is located, and increased prices and problems radiate out from it. Yes, you cannot blame all these problems on Amazon, but it has undoubtedly been one of the catalysts.

You think Point Breeze gentrification has you upset now?

Depending on the Amazon location, I would expect West Philly or outskirts of South Philly would be fully gentrified, swiftly displacing longtime and lower-income residents who will be forced further from transit and services they need. The egalitarian charm of a city of townhouses would be undoubtedly tarnished.

Philly’s shops and restaurants will also change. You will find more fancy, upscale places looking to capitalize on the new money in town. Those entrepreneurs will displace the diners, dives bars and bodegas that are slowly being priced out. That funky, grungy side of Philadelphia will be sanitized away in exchange for the acceptable, palatable and “luxury” branding of so many of these new buildings.

Seattle’s Pike/Pine corridor is the perfect example of what I mean.

In the 1990s when I first lived here, these two parallel streets were the home to punk rock clubs, gay bars, coffee shops and record stores. Now the area struggles to maintain its indie nightlife as the low-rise buildings are replaced with mid-rise, mixed-use buildings with ground-floor retail, high-end concept restaurants and fancy breweries.

Philly ads on Seattle buses. (Photo by Chris Beiter)

Philly ads on Seattle buses. (Photo by Chris Beiter)

Yes, this Seattle neighborhood still has some of the elements that made it great. Neumos and The Comet are still keeping music in the air. While some gay clubs have been priced out, there are a few still hanging on. But even the higher-end places have a hard time staying open because the next newest thing is opening down the street, siphoning off both customers and top-caliber employees.

Let me pump the brakes here

None of this would happen overnight. I’m not predicting the apocalypse. And frankly, the flip side to that coin is quite attractive. Winning the Amazon Bowl would mean Philly on steroids. But does a city with occasional rage issues really need to be juiced up?

Let’s just assume Amazon HQ2 directly hires 40,000 new jobs, then double that to include spouses and others that might establish themselves along with an Amazon employee. And that is just the direct salaries. This type of big investment would undoubtedly have a multiplier effect for suppliers and services to support the HQ2. And don’t forget about all the construction jobs for the headquarters and infrastructure improvements to build the campus in the first place.

To say that HQ2 would be a boon for Philadelphia is an understatement.

It would be a massive explosion of capital and investment. And beyond the visible infrastructure, those dollars also mean more members at the Philadelphia Art Museum and Zoo, more patrons to the city’s theaters and performance spaces and more volunteers for local causes.

That investment also means more deals for local researchers, more and better internships for area students and a major recruiting advantage for universities competing for the best students. If Penn, Drexel, Temple, Villanova, Swarthmore and others become the proving grounds for future Amazonians, expect these schools to benefit, just as the University of Washington has grown into a national force in computing and engineering thanks in large part to the investment of some guy named Bill Gates.

Finally, let’s bring it all back to the Philly tech scene, again a case of both bad and good.

The pending talent fight

Philly’s own Comcast can already outbid smaller regional software shops for employees, but bring in free-spending Amazon, which pays employees far over market rate and rewards them with stock options, and local startups can expect the competition for talent to become even fiercer.

Think you are going to be able to lure an engineer to take a train out to Radnor or Conshy when they can get paid a significantly higher salary (plus Amazon stock!)? Nope. Philly’s reputation for affordable engineering resources will swiftly transform.

But when those Amazonians succeed financially, grow tired of being a cog in the giant machine, and set off to do their own thing? Many of them will stay in Philly, especially if the city can adapt and handle the growth.

This is perhaps the most exciting promise of an Amazon HQ2 in Philly: Not Amazon itself, but what those Amazonians will do once they graduate.

When I hear a former colleague has gone to Amazon, I expect one of two things:

  1. They hate it and leave in weeks or months.
  2. They love it and stay for years.

Amazon has a well-earned reputation of being a hard place to work with a grueling work ethic and unforgiving culture. If I had to guess, I’d say it’s probably 80/20 in favor of those who leave swiftly. So you could expect a lot of very smart people will be attracted by Amazon, but quickly turn around and try their hands as entrepreneurs or move to other local companies.

Seattle has a plethora of startups now, in large part due to the tech money being invested in new ventures by Microsoft and Amazon alumni. Could Amazon alumni build the next Zillow, DocuSign or Expedia, all Seattle area spinoffs that are significant employers, from the ground up in Philly?

With its existing excellence in healthcare and insurance, it’s easy to envision Philadelphia expanding its natural leadership role in these vertical software niches.

And beyond the startups, it’s likely Philly will get another thing Seattle has experienced. San Francisco and Silicon Valley companies such as Google, Facebook, Apple and Salesforce have all set up engineering offices in the Seattle region. They know the Pacific Northwest is filled with talented engineers who might want to change jobs, but stay in the region. If Amazon makes a home in Philly, other tech companies will start looking hungrily at the region — like Sauron’s eye drawn to the Shire when Frodo put on the ring.

The bottom line is this

Please, don’t take my word for it when it comes to Seattle’s growing pains. Our local NPR affiliate KUOW has been running a series called “Primed,” talking about the lessons learned, and what it might mean for the host of the next Amazon headquarters. They go into far greater detail than I can in this column, with many voices across the city from both tech and civic perspectives.

Will winning the Amazon Bowl make Philly into a glorious tech utopia, solve local infrastructure problems, improve local schools and make the world a shiny, happy place? No. It will make a wonderful, complicated city more intense. It will exacerbate inequality and gentrification. It will divert attention and resources from important problems, in the hope of a later payback. It will bring jobs and investment, and supercharge the burgeoning Philly tech scene.

And still, I’m going to cheer for Philly to win despite my many concerns, because I think it could do far more good than harm. And there are a lot of people in Philly who deserve to have opportunities that Amazon will bring.

But making the playoffs and losing may actually be the best result for Philly.

Going through the process of making the bid has helped local leaders focus and prioritize, and making the short list has brought a spotlight to a city already on the rise. I believe leaders will be quite ready for the next opportunity, and that may not be too far off in the future, as Apple recently announced it’s also are thinking of building a second campus somewhere, too.

Will that be the answer? Probably not, but it’s time to acknowledge the bad with the good. We cannot let our civic pride cloud our judgment when it comes to a project that will bring much change.

Companies: Amazon / City of Philadelphia
Series: Amazon HQ2

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