BACKGROUND
Amazon issued a Request for Proposal ("RFP") for a second corporate headquarters (HQ2). Amazon is a publicly traded U.S. corporation and is a leading internet retailer and technology company. The Company presently maintains more than 380,000 employees at multiple facilities in North America and throughout the world. Due to the successful growth of the Company, it now requires a second corporate headquarters in North America.
Amazon's current headquarters is located in downtown Seattle, Washington. This urban campus employs tens of thousands of employees. Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city's economy - every dollar invested by Amazon in Seattle generated an additional $1.4 for the city's economy overall.
In choosing the location for HQ2, Amazon has a preference for:
- Metropolitan areas with more than one million people
- A stable and business-friendly environment
- Urban or Suburban locations with the potential to attract and retain strong technical talent
- Communities that think big and creatively when considering location and real estate options
Roseville and the greater Sacramento area can well meet all of these requirements.
Building/Site Requirements: Amazon will consider greenfield sites, infill sites, existing buildings, or a combination for the Project. Amazon will prioritize certified or shovel-ready greenfield sites and infill opportunities with appropriate infrastructure and ability to meet the Project's timeline and development demands. The following is a summary of the HQ2 Project's ideal site and building requirements:
- Existing buildings of at least 500,000+ sq. ft.
- A greenfield site of approximately 100 acres certified or pad ready, with utility infrastructure in place.
- Other infill, existing buildings, including opportunities for renovation/redevelopment and greenfield sites, meeting the proximity and logistical requirements of the Project.
Jobs: Amazon indicated that they will hire as many as fifty thousand (50,000) new full-time employees with an average annual total compensation exceeding one hundred thousand dollars ($100,000) over the next ten to fifteen years. Jobs will likely be broken down into the following categories: executive/management, engineering with a preference for software development engineers (SDE), legal, accounting, and administrative.
Capital Investment: The Project is estimated to be a $5 billion capital investment in the selected city over the initial 15-17 years of the Project.
Phase IV and beyond will grow organically. At full build-out, the campus or park may exceed 8 million square feet and over $5 billion in total capital investment. Amazon will continue to invest in its facilities to ensure it offers a state-of-the-art workplace for its employees.
Sustainability: Amazon is committed to sustainability efforts. Amazon's buildings in it's current Seattle campus are sustainable and energy-efficient.
Connectivity: Ensuring optimal fiber connectivity is paramount at the HQ2 location.
Regional Response to RFP:
To help streamline the proposal process and to ensure delivery of a single, coordinated regional pitch, Greater Sacramento is working with a variety of partners to collect and execute all regional and state-level content for the Amazon RFP. It is expected that potential development sites from the following jurisdictions will be included in the regional response, see Attachment 1:
- El Dorado County
- Placer County
- Sacramento County
- City of Elk Grove
- City of Lincoln
- City of Roseville
- City of Sacramento
- City of West Sacramento
The Amazon HQ2 RFP was vague in its request for specific information. Therefore, Greater Sacramento requested that each local jurisdiction submit basic site, building and utility information which they will include in their regional response. Greater Sacramento's regional response will include: 1) Capital and operating costs (tax structure); 2) Incentives offered by the state and local communities; 3) Incentive programs available for the project at state and local levels; 4) Regional labor force and educational attainment of the workforce; 5) Logistics including population centers, highway corridors, airports and travel times; 6) Cultural community fit for population diversity and fit; and 7) Community/quality of life relating to where employees will enjoy living and availability of recreational and educational opportunities.
City of Roseville's Opportunity Sites:
It is staff's intent to receive approval to participate with Greater Sacramento's regional response and include two City owned properties. This approval merely allows the City to participate in the regional response. Staff will bring forward any future considerations such as site specific terms, economic benefit associated with each site, for Council's consideration and determination of City's best interest at a later date. The sites are as follows:
Site 1: 290 Conference Center Drive. Please refer to Attachment 2 for more detailed site information and map of the conference center property.
The 290 Conference Center Drive site is 11 acres in size and is currently undeveloped and owned by the City of Roseville. The site has commercial/business professional land use and commercial zoning, and has utility and traffic capacity for up to 500,000 square feet of professional office development potential. Building height up to ten stories is permitted. The proposed project will require approval of a major project permit and subsequent environmental impact report.
This site would provide a high profile site adjacent to Highway 65 that would be suitable for executive offices and can accommodate Phase I of the Amazon HQ2 RFP.
Site 2: Pan Handle - 6382 Phillip Road. Please refer to Attachment 3 for more detailed site information and map of the pan handle property.
The 6382 Phillip Road site is 160 acres in size and is currently undeveloped and owned by the City of Roseville. The site is zoned Public/Quasi-Public and has utility and traffic capacity to serve future development. Currently more than 1,080,000 square feet of processional office is allowed. The site could potentially accommodate much more development if higher density buildings (taller, larger floor plates) are considered. The property includes 10.25 acre buffer area along the future Placer Parkway (a planned six-lane facility which will connect Highway 65 in Placer County to Highway 99 in Sutter County), located immediately west of the site, and 19.74 acres of the site accommodates Pleasant Grove creek which traverses the site.
This site could accommodate future phases and potential build-out of the Amazon HQ2 campus.
Incentives:
Participation in Greater Sacramento's regional response to the Amazon HQ2 RFP is a unique opportunity that could potentially generate significant economic benefit and job creation to the City and region. Approval of this request allows the City to offer Amazon incentives, as noted below. These incentives are generalized at this time; any and all incentives, considerations and site specific terms will be brought to the City Council for consideration and determination of City's best interest at a later date:
- Gift of land/reduced land costs - A gift of land and/or reduced land cost offer could be provided by establishing a market value of land and have the City structure a loan for the value of the land with the loan forgivable upon the project reaching a specified community investment and/or economic benefit in excess of the appraised land value. The estimated value of each land offer is:
- 290 Conference Center Drive: Based on an appraisal conducted last year the value of the of 11 acres is $4,791,600.00.
- 6382 Phillip Road: The land value of 160 aces is estimated to be $34,848,000.00. This land value is based upon staff's estimate of similar vacant land in the City.
- Expedited permit, plan check and inspection processing timeframes - Expedited processing timeframe offer would be to establish a comprehensive and concurrent development review, plan check and inspection process timeframe similar to what has been done for other priority projects (i.e. McKesson and FedEx projects). Timeframes would be set in accordance to Amazon's business needs.