Most major metros across the country are clamoring to have a chance to land Amazon’s second headquarters and the 50,000 high-paying jobs that will come with it. While some other cities along the east coast have been getting more attention, the Twin Cities metro is a viable candidate, garnering a CoStar ranking of number 13 out of the possible options.
Using Amazon’s Request for Proposal and CoStar’s unparalleled database of commercial real estate information, the CoStar Market Analytics team developed a ranking of potential Amazon HQ2 destinations among metros with more than 1 million people. The rankings weigh: % of a metro’s population holding a bachelor’s degree or higher, the total number of computer and mathematics jobs in the metro, the rate of tech-related job growth from 2013-15, the total amount of proposed office space tracked by CoStar, the average price/SF of office properties in the metro based on CoStar sales data, and the affordability of the metro based on CoStar apartment rental data.
The Minneapolis metro ticks most of the boxes Amazon is looking for. We have a population well over the 1 million threshold, a highly educated population with 40% holding a Bachelor’s degree or higher, top-caliber colleges and universities, easy access to an international airport (which has significant upgrades underway) and a system of mass transit with busses and the light rail. Additionally, the quality of life is excellent and housing is far more affordable than many other major cities in the country. Apartment rents average a little over $1,100 per month, with the median home price at $250,000.
Amazon is already familiar with this market, having built an 820,000 square foot fulfillment center in Shakopee and leased over 100,000 square feet of office space in the T3 building in the trendy North Loop neighborhood. Word is they are looking for a site to build an additional fulfillment center of equal size to the Shakopee facility.
A potential stumbling block comes in the form of government incentives. It is no secret that Amazon is looking to garner as much as possible in subsidies, though Governor Dayton has said the state’s bid will be “restrained” in deference to major employers who are already headquartered here and compete with Amazon – Target and Best Buy.
It is a delicate balancing act to avoid stepping on the toes of major employers with a long track record here while putting a highly competitive offer together to look toward future growth with a once-in-a-generation opportunity. The risk lies in Amazon opting for another state and then continuing to take market share from the local giants.
Another large component of the requirements is the real estate need – space for up to 8 million square feet. To put that into perspective, that is over six IDS Centers or nearly eight US Bancorp Centers. Luckily, the Minneapolis metro has several sites that could accommodate the need for such large-scale growth.
Ford’s former Twin Cities Assembly Plant sits on 135 acres along the Mississippi River in St. Paul. The city is looking to have the site redeveloped into a high-density mixed-use project, though early proposals have faced significant opposition from local residents.
There are many retail amenities in close proximity to the site and the Metro Transit’s A Line rapid bus service (which has connections to the light rail) makes several stops along Ford Parkway on its route between the 46th Street Station in Minneapolis and the Rosedale Transit Center. The site is about 10 minutes from the MSP International Airport, 3 miles from I-35E and about a mile from Highway 55, which connects, to I-94 and I-35W.
Another prime site within Ramsey County is the Rice Creek Commons, formerly the Twin Cities Army Ammunition Plant, in Arden Hills. The site’s 320 acres of developable land have been cleaned and are ready for development. Rice Creek Commons is located at the intersection of I-35W and Highway 10, and just 10 miles from either downtown Minneapolis or downtown St. Paul. The one major negative of this option is the lack of rail transit, though the I-35W Bridge was constructed with the capability to support light rail.
The Kelley Farm site in Bloomington’s South Loop District is also an option, and though it has only 35 acres of developable land, surrounding sites could be acquired to reach the 100 acres that Amazon desires. The site is adjacent to the MSP Airport, on the Hiawatha light rail line, next to two of the region’s arterial highways and close to their distribution center in Shakopee. The Mall of America offers a multitude of retail and dining amenities, while the site provides access to the Minnesota Valley National Wildlife Refuge. Either downtown Minneapolis or St. Paul can be reached in about 15-20 minutes. The Bloomington Port Authority recently negotiated an option to purchase the site in a play to win the 2023 Expo (World’s Fair), and perhaps a bid for Amazon’s HQ2.