Business & Finance

Online Retailer Amazon Rejects Somerville as Potential Location for Massive “HQ2”

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179187c01481da513189_sompixamazonsign.jpg

SOMERVILLE, NJ – Amazon released its short list of  20 potential sites to build a massive east coast headquarters Thursday, disappointing more than 200 other cities and smaller towns that had salivated over the prospect of 50,000 new jobs and billions of dollars in associated economic benefits – including Somerville.

The 20 finalists include the city of Newark; a total of 238 cities, towns and counties had submitted proposals.

Other finalists include Atlanta, Austin, Texas, Boston, Chicago, Columbus, Ohio, Dallas, Denver, Indianapolis Los Angeles, Miami, Montgomery County, Md., Nashville, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, N.C., Toronto and Washington, D.C.

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In October, Gov. Chris Christie, Sen. Cory Booker (D-NJ) and assorted state and Essex County officials submitted a formal RFP (Request for Proposal) to Amazon in an effort to convince the online behemoth to invest billions in the state’s largest city, promoting Newark as the ideal location for Amazon’s “HQ2”, an east coast headquarters complex totaling 8 million square feet worth billions to the state and local economy.

Amazon, the world’s largest online retailer, has said its expansion could generate 50,000 new jobs.

Christie, accompanied by Booker, the former mayor of Newark and his successor, Mayor Ras Baraka, presided at a white-collar, bi-partisan pep rally in mid-October in Newark at Rutgers Business School, where Christie announced that the state would endorse Newark as New Jersey’s preferred location for Amazon’s self-described HQ2.

Former Somerville Mayor Brian Gallagher said at the time that Somerville had just as much to offer the Seattle-based conglomerate as did Newark.

Failing to garner the state’s official endorsement, Somerville decided to go it alone.

“We responded to their RFP and worked with the Somerset County Business Partnership to pull together a package,” explained Colin Driver, Somerville Economic Development director. “We knew there were bigger players and that the state was pushing Newark, but we felt we had to throw our hat in the ring so we did.

“It was quite obvious from day one that the state wasn’t going to support the smaller towns, they put all of their eggs in basket; they put together a huge financial package for Newark,” Driver added.

“That’s what Amazon is looking for, the biggest financial break they can get; if they can essentially build a facility where the costs are offset by the financial incentive and generate a whole lot of jobs, that’s a good thing, wherever they go,” he added.

“I would have liked it be in Somerville, but we weren’t picked, obviously.”

The borough’s Amazon proposal was centered on a 22-acre tract of property at the former landfill, a portion of which fronts on Route 206. The tract has been undergoing environmental remediation for several months.

Driver said the property could have easily accommodated a 500,000 square foot building, which Amazon has cited as the first step of its planned expansion.

“Their RFP says they’d like their first building to be close to a transportation hub and/or buses,” Driver said. “They would like to be in proximity to a downtown that’s got arts, entertainment, restaurants, an overall good community feel,” he added.

“They also want to be close to highways, airports and have available open space for recreation. It sounds like they’re describing Somerville,” Driver said.

The borough-owned property is also adjacent to the NJ Transit Raritan Valley line; close proximity to rail is one of Amazon’s criteria, along with access to interstate highways and airports. The proposed site is adjacent to the borough’s “Green Seam,” a passive recreation park that will weave through the 80-plus acres of the former landfill. Retail and/or residential development is also planned for the site.

Further expansion of a network of satellite campuses would have afforded adjacent towns in Somerset County an opportunity to cash in on the Amazon jackpot, according to Driver.

Early in October, Somerville, in conjunction with the Somerset County Business Partnership and an assist from the Somerset County Freeholders, had submitted a formal RFP to the state’s Partnership for Action and the Business Action Center for consideration, as did other municipalities, including Jersey City and New Brunswick.

New Jersey had instructed those towns interested in pitching Amazon to send their proposals for its review and eventual endorsement; Somerville was notified that its proposal “did not meet the criteria set by the state and would therefore not be submitted with the state’s response,” according to a resolution approved by the Borough Council authorizing the submission of the FP directly to Amazon.

"Newark was the clear winner of this competition, and Newark has earned the state's support," Christie said, citing the city's status as a unique education, technology, transportation, and cultural hub. 

Christie noted that the state was willing to give $5 billion dollars in tax incentives over ten years upon the creation of the 50,000 new jobs. 

"Let any other state go and try and beat that package," Christie said, also noting that the City of Newark was willing to offer a local, 20-year property tax abatement that could be worth another $1 billion dollars, and would waive its municipal wage tax to encourage Amazon to come to the city.

"Newark, New Jersey has often been maligned over the previous decades, but let's tell the truth about this incredible city. For centuries, Newark led this nation in innovation, in invention, and in industry as one of America's premier cities," said Booker, who served as the city's mayor from 2006 to 2013.

"Like all major Northeastern industrial cities, we saw tough times. But the truth of Newark in the last decade plus has been of a city charging back, and reclaiming its space, step by step, as one of America's greatest cities," Booker said. 

"Newark is not a charity case. It is the choice for companies who want to relocate and remain competitive and strong, not just in New Jersey and not just in our nation, but in a global context," Booker added.

Driver said a state planning official had likened the competition for Amazon to a “feeding frenzy.” Jersey City hired a team of lawyers and planners to work on its proposal; Newark had a team of 10 people, according to Driver.   

 “The state obviously has its favorite cities that they drive significant development to all the time; it’s not right,” Gallagher said in October. “It shouldn’t be that way. We took a look at the criteria that Amazon has put forth in their RFP and you know what, Somerville and Somerset County hits every mark.”

Gallagher said Somerville’s entry in the sweepstakes may pay dividends in other ways.

“We have the ability to attract Amazon; if not Amazon, there are those who are watching what Amazon does. It puts us on a map that we’re not on right now.”

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