Austin didn't land Amazon's HQ2 -- or the whittled down versions it is intending to build in Crystal City, Va., and Long Island City in the Queens borough of New York City.
But that's just fine with a few Austin tech and real estate leaders Inno chatted with as the news broke Monday night and Tuesday morning.
"It just didn’t feel right," said Joshua Baer, founder of Capital Factory. "At least when it was HQ2 in one place, it seemed like too much for Austin right now. And when it becomes HQ3 and 4, who cares? Because we know we’re going to get growth from Amazon. There’s no bigger cheerleader for Austin than me, but this just wasn’t the right time for that.”
Baer told Inno that Amazon supports local startups through its web services offerings, and he said the Austin startup ecosystem has already recently landed several major expansions, including the Army Futures Command. That, along with Oracle's recently startup ecosystem and Austin's already powerful tech startup momentum, already has the city on track to a bright future.
Baer noted Austin's problematic traffic and transit situation as potential issues, but he didn't think any one factor ruled Austin out for HQ2.
Much of the economic incentives process has been secretive. But tax breaks may have played a role.
“I don’t know any of the inside baseball on this one, but our city council is not known as one that bows down to the interests of big companies," Baer said.
Lots of people are going to say that Amazon played cities with #HQ2. There is some truth to this.
But most knew they didn't have a shot, they offered bad policies, and avoided public records laws through tricks and legal challenges.
They didn't get played. They played along.
— Nathan Jensen (@NateMJensen) November 13, 2018
The Austin Chamber and its economic development arm, Opportunity Austin, shared this statement:
"The fundamentals that made Austin a top 20 finalist and have helped our city be a leader in job generation—our incredible talent and lifestyle—haven’t changed. As we prepare to launch Opportunity Austin 4.0 in January 2019, we look forward to having more relocation and expansion announcements. Amazon already calls our region home. It has created thousands of jobs here with Amazon Web Services, the fulfillment center in San Marcos and, just last year, it acquired Whole Foods—a true Austin original."
Maybe it's natural to shrug off a potentially big win. But, from Inno's vantage point, there weren't very many tech leaders touting Amazon HQ2 as the cornerstone of Austin's future.
Ryan Bohls, a managing director at Newmark Knight Frank, a commercial real estate advisory firm, said via email that he was unsurprised by the D.C. area selection.
"A foothold in the backyard of the nation’s Capitol makes political sense," he wrote. "It also gives them an opportunity to form the market around it’s desires."
I asked him if he had hoped Austin would land HQ2 – or even half of it?
"No," he wrote. "If Amazon came to Austin there’d be room for few other incoming companies given our current infrastructure constraints. Let’s figure that out first so we can get the next Amazon without mortgaging our future as a result."
Bohls quoted Warren Buffett in saying, “Don’t test the depth of the stream with both feet.”
He said Austin's tech scene is already massive.
"With the continued increase of big tech footprints in Austin, we’re becoming over reliant on one sector, similar to Houston’s dependence on oil and gas in 2014," he wrote. "In the event of an economic downturn, layoffs by tech companies that use Austin largely as secondary or tertiary locations would have a significant impact on the space markets in Central Texas. I’d hope that we focus on biomedical companies and other sectors to diversify as opposed to being completely dependent on one industry."
There were plenty of other reactions in Austin and from around the nation.
Steve Case, founder of AOL and Revolution, a VC firm that backs startups in several lesser-known areas, perhaps captured what many startup leaders are thinking when he wrote: "The best economic development strategy is not to lure existing companies to open offices or factories, but instead to birth the new companies that could be the Amazons of tomorrow..."
https://www.instagram.com/p/BqGxVNFgUwg/?utm_source=ig_web_button_share_sheet
Here are more reactions we spotted on Twitter.
I’m breathing a big sigh of relief about #HQ2 not ending up in Austin.
— Ⓐ®️Ⓛ⓪ (@arlogilbert) November 13, 2018
I'm pretty proud of Austin and @MayorAdler for not getting sucked into the tax break game, but this is some pretty shady stuff by @amazon #HQ2 https://t.co/o0P6FujHlA
— Sean Waters (@artificialrobot) November 12, 2018
Won't be surprised if #HQ2 ends up spread across 20 different cities. https://t.co/KkaLttKktk
— RealMassive (@RealMassive) November 8, 2018
Whew. That should delay me getting priced out of Austin for a few more years #ATX #AmazonHQ2 https://t.co/2ywOdRzwXa
— Stephanie Urquidez (@estefena) November 13, 2018
re: #HQ2 - Usually it doesnt matter in the long run. Rarely, but sometimes, it REALLY does. ie - Atlanta - Birmingham. Delta's 1950 pick of Atlanta over Birmingham for hub took 2 cities of same size and MADE Atlanta. Wonder if this decision will matter in 50 years. @AustinInno
— Chris Moose (@moosechris) November 13, 2018
