A Guide to Winning Amazon’s Next Announcement
March 6, 2017
(Episode 13 of “The Project: Inside Corporate Location Decisions”)
With plans to add 100,000 new, full-time, full-benefit jobs across the U.S. in the next 18 months, Amazon is the world’s leading e-commerce company and one of the most sought-after companies for communities looking to attract jobs and investment. This week, to gain insight into the process of winning an Amazon project, we looked over the long list of communities that have successfully landed Amazon facilities in the past two years and arranged a conference call with two seasoned economic developers: Adriana Cruz, President and CEO of the Greater San Marcos Partnership, and Jerry Mallot, President of the JAXUSA Partnership in Jacksonville, Florida. Here are their insights into successful working with this fast growing company and our guide to winning Amazon’s next project.
Patience Fairbrother (DCI): The press release went live on January 12th, 2017 at nine a.m. Amazon to create more than a 100,000 new full time, full benefit jobs across the US over the next 18 months. This comes from a company that added the following new facilities in the past two years. Davenport, Jacksonville, Lakeland and Miami, Florida, Braselton, Georgia, Joliet, Illinois, Edgerton, Kansas, Fall River and Sutton, Massachusetts, Baltimore, Maryland, Chicopee, Minnesota, North Las Vegas and Reno, Nevada, Etna and Twinsburg, Ohio, San Marcos and Dallas, Texas and finally, Kenosha, Wisconsin.
Andy Levine (DCI): That’s a rather long list, Patience.
Patience: I’m tired already and we just started.
Andy: All right. Amazon is a classic example of a serial investor. A fast growth company that is continually making new investments and the pace in the next 18 months is going to be fast as ever. We decided we’d take a different approach in this episode. Wouldn’t it be a little bit different and interesting to talk to two different economic development professionals that have successfully worked with Amazon in the past year? We’d hear their stories, we’d look for common themes and we’d see if we could piece together a guide for winning the next Amazon Announcement.
So welcome to episode 13 of the Project, inside corporate location decisions. I’m Andy Levine of Development Counselors International.
Patience: And I’m Patience Fairbrother, also with DCI and Andy’s co-host of the Project.
Andy: So in preparing for this episode, we looked over that long list of communities that Patience read a moment ago, those that had successfully landed Amazon facilities and we arranged a conference call with two of them, two seasoned and battle tested economic developers.
Patience: Our first is Adriana Cruz. Adriana has a long history in Texas working for the state, the Austin Chamber and serving as president and CEO of the Greater San Marcos Partnership since 2012.
Andy: Jerry Mallot is president of the JAXUSA Partnership in Jacksonville, Florida. That’s a position he has held for the past 23 years. That’s a pretty amazing tenure for any economic development position. Now, both Adriana and Jerry are topnotch economic developers. They’re also good friends of DCI.
Patience: We arranged a conference call, asked a series of questions about their experience with Amazon and let the tape roll. Here’s what Adriana and Jerry shared.
Andy: So that’s a little bit of background on both Jerry and Adriana but first of all, I just want to thank both of you so much for joining us on the call. Thanks for being on the Project today.
Jerry Mallot (JAXUSA Partnership): Glad to be here and of course, that means we were successful in these projects so it makes it doubly nice to be here.
Adriana Cruz (Greater San Marcos Partnership): And thanks for the invitation.
Andy: All right. So Adriana, why don’t we start off with you and I just want to ask for a quick 60 second overview of the Amazon project that you’ve just been through within San Marcos.
Adriana: Sure. I’m happy to talk about this project. In August, 2015 we announced that Amazon had selected San Marcos for a fulfillment center. It’s an 850,000 square foot fulfillment center which was anticipated to hire 350 the first year and then grow to a 1,000 employees over five years with a 191-million-dollar investment to the community. We worked with the city and the county on landing this project.
It was a great win for our community and we’re very, very, excited to be a home to one of Amazon’s fulfillment centers.
Andy: Excellent, excellent. And I don’t want to get into comparing whose project is bigger here but Jerry, why don’t you do the same and just describe a bit about the work in Jacksonville that you did with Amazon?
Jerry: Great. Well, last year in 2016, we actually did two projects with them. The first one was about an 850,000 square foot footprint although the volume of the building and mezzanines makes it a little over two million square feet. It is a very robotic oriented center handling small packages and robots going everywhere. That’s about a 200-million-dollar investment.
They’ll initially have 1,500 jobs. 500 of them will be what we call high wage meaning over \$50,000 and so it was a great project and as we were finishing that one and talking about what might be possible, they indicated that they were looking at us for a second fulfillment center with different product lines. Heavier, larger products that would not be robotically controlled. A 115-million-dollar investment, over a 1,000 jobs, 350 of which would be high wage, over 50,000 and a million square feet. So we were very pleased to get both of them, actually.
Andy: Wow. Those are some big numbers from both communities. Now, Adriana, I know you’re…the Amazon facility in San Marcos has been operating for about a year or so now.
Adriana: Not even.
Adriana: They opened their doors in early September 2016 after breaking ground August 2015 and this past holiday season we’re actually recognized by the VP at Amazon of global operations as one of four facilities worldwide that shipped a million items in one day a 113 days after opening which is incredible. And we’re thrilled to be listed in that very, very short list and it is one of their most technologically advanced centers in their network and they haven’t even been open a year.
Andy: Now, Jerry, your projects, it sounds like, are a little more recent.
Jerry: Well, they’re under construction actually. That’s right.
Andy: Okay, good. Good, good.
Jerry: Both of them, yeah.
Andy: When do you hope to have those…the first one open and then the second one open?
Jerry: Well, I think they hope to open them both about the same time before the holiday season this year in ’17. One was far more technically advanced. In fact, as they say, each one they build, they now build to the best specifications they can, the most advanced specifications. So that one started earlier. Construction began in July.
The construction is just getting started in the second one but it’s a relatively simpler building. It’s a million square feet but it doesn’t have multi levels in it and it doesn’t have the robotics so it will be able to meet the deadline, we believe. So they both have the opportunity to open before the holiday season and I project it’ll be much like Adriana’s in September, October timeframe.
Andy: Adriana, I know from an earlier conversation…I know Amazon committed to 350 jobs initially but they’ve actually hired a great deal more in the first year. Am I correct in that?
Adriana: Yes. We confirmed with them just a few months ago. They hired 3,000 permanent full time employees in the San Marcos facility outside of the seasonal help that they brought in for the holidays, of course. And so today, not even five months after opening, they have far exceeded their job creation goals and have hired 3,000 permanent, full time employees with the benefits that they receive and competitive wages and that’s a great success story for us.
Andy: So between these three projects that we’re talking about here, we’re really talking about a minimum of 5,000 jobs which is pretty amazing. Let’s switch gears here. So Jerry, can you just tell us about your first contact with the company? How did the lead come to you?
Jerry: Well, our process began actually five or six years ago when we began to target Amazon as a fast growing company that we would like to engage and through our work at IAMC, we…I happened to run into an Amazon representative. We got to know each other. That…I mean, I would see him at least twice a year and just began developing not only relationship but information. I wanted him to be aware that being in Florida, we had a large population base and that we felt we were the kind of environment that would make sense.
And a couple of projects came up early in the process that I know that we were at least considered for but the density of population is far more waited to the south in Florida than to the North. So it didn’t surprise me any that the first projects went into that more dense population base. And we felt like we were competing with Georgia when it came down to it because we’re on the very norther part of Florida but we kept after it. I had a chance to get a sight visit here. I went out to Seattle and had a chance to meet with him. But when it came down to the deal, I got a call in February of last year of ’16 and it was a company in Atlanta, a development company, wanted to come talk about a million square foot distribution center.
We didn’t know it was Amazon but after the meeting, it certainly sounded like it could be and it was almost a month later that they formally noted to us in a meeting not in Jacksonville but in Orlando that, in fact, it was them and that we were in competition to be able to get a new center. And so we were in competition with a couple of cities in Florida and several other places around the country and that began the process that we went through to see if we could win the deal.
Andy: I want to come back to the chase in a moment but Adriana, can you similarly tell us how did you first come in contact with the company? Was it also through a consultant or a development company?
Adriana: It was through a consultant and it was interesting. San Marcos had competed for an Amazon facility in 2012 and was a finalist and lost to Schurz which is a community just north of San Antonio for a fulfillment center for large items, large size items. And when I came in and took this job, I was told and I went through the files and saw that Amazon really liked the community, liked the site that they were looking at and I knew the consultant. I’d had…he was a longtime friend of mine and so I reached out to the consultant and I reached out to the company and just let them know, “Hey, I’m here. I understand. We had this project and if there’s anything in the future…you never know. Just don’t hesitate to reach out.”
And a few months after that, we invited the consultant to a fam tour that we do here in our community called the Greater San Marcos Showcase and he came. He met our city officials, our county officials. A few months later, I got a call from him and said, “I have a project and can we schedule a meeting in early May?” This was April, 2015. “And it’s a large facility and I want you to meet with the company.” So we had this meeting first week of May with the consultant and company representatives and they said…they identified who they were and said, “We’re interested in that site.
Again, the site that we looked at in 2012. And we’ve been looking statewide and you guys are a little bit behind schedule because we actually didn’t think about this site until just recently. So you guys are going to be a little behind. Would you be able to catch up?”
And we assured them that we would. And we were off and running from then on.
Andy: Okay, wow. So it’s interesting. In both of your cases, it was relationships that you had previously that helped facilitate this. Let’s go back to you Jerry. And so the date that you found out that Amazon was looking at you…just remind me again what was that date.
Jerry: February 9th of ’16 when it became real.
Andy: Okay. And just take us from there and…it sounds like it moved very quickly at that point.
Jerry: And it really did. We met in our conference room here. Again, it was with a developer representing them. It was so confidential, the developer wouldn’t give us their name. They asked a local company to be in there that we happen to know because the developer was confident that if we knew their name that we would know the client.
So actually, as the meeting started, there was a little bit like…Adriana, they said, “We have been doing some research and we have selected a site.” And it turned out it was not a site that we had submitted to the company previously. We had given them a lot of different site options but they said, “Before we can go any further, we have to know that you can provide the timing and the certainty of getting the permitting and pre-work done so that we could be under construction by July.”
And as Adriana said, we said, “Of course we can.” Now, the reality is we didn’t know certainly but the city was in the meeting. We knew we had homework to do but it did appear that there were no impediments that should be able to keep that from getting done if we expedited everything we would do. And I think that sense of confidence and a relative certainty was a really important element that started it off but they told us we’re in competition with several other things. They’re putting centers at various places around the country and if we couldn’t meet the time schedules, we would just have to hope that we’d be considered at a later date.
Andy: This is February 9th and once again, we want to be constructing this July 1?
Jerry: We want to get under construction July 1. That’s very fast on a site we didn’t even have on our list. So that was a big deal. But the next meeting took place March 18th at Enterprise Florida, the state’s headquarters in Orlando. That’s where they revealed who they were and they did have a consultant they had hired to help work on some elements of statewide issues but they said, “You know what? We think we can make this happen. We like Jacksonville.”
Everything went well and on August 12th, we actually…under a codename, Project Rec, submitted it to the city for consideration for local incentives and some…combined with some state things.
It was approved by the end of April on the 26th and what they had told us about that was completing an incentive deal does not guarantee you the project but what it does it eliminates the risk as to whether or not incentives would be granted. But they did not want us to acknowledge who they were.
The newspaper locally began to make a judgment when they saw the bill introduced that it might be them and their only constraint was to say, “Listen, just please don’t acknowledge. Everyone speculates that it’s us all over the country but we want to wait until we make a firm decision.”
And we were finally able to get that commitment on the 27th of July when we made the announcement.
Andy: It’s great that you have all these dates, Jerry. You either have a great mind or you have notes in front of you or something.
Jerry: No, I went and looked it up.
Jerry: I had the approximate date. I had the months so I didn’t have the dates until I looked it back up.
Andy: Adriana, why don’t you do the same and talk about the chase from that meeting you had where the consultant came back and said, “We do have a project here. We want to talk to you.”
Adriana: Sure. Well, one of the reasons that we lost the project to Schurz was because the property that they were looking at needed to be rezoned and when they asked…again, timing is of great concern to them and turnaround time specifically and when they asked how long the process was to get that property rezoned, the time that they were given was just too long and the Schurz site was further along and so they just made the decision and made to Schurz.
So when we met with them in May, that first week of May, that was their first question was, “We’re looking at the same property that we looked at before. How long is it going to take to rezone the property?”
And in the time after the Amazon loss, the city had gone back and re-looked at their processes and said, “If we have another project like that come up, we never want to lose for something like that.” So they had a memo laid out of how long it would take and Amazon said, “We have…today is…” I think, “May the 6th. We need to break ground July 31st and we need to have the property rezoned, our plats approved, everything ready to go, incentives done by July 31st. Can you meet that deadline?” And we said, “Yes, we can.” And we had city representatives and county representatives in the room with us.
We all agreed we had the memo outlining how we were going to get the property rezoned and the amount of time it was going to take and we beat their deadline by three days. So we actually had everything ready to go by July 27th. They ended up breaking ground August 14th and they were ready to go, started construction and opened their doors September 2nd.
Andy: As I listen to both of these stories, the Jacksonville story, the San Marcos story, it’s amazing to me how closely they’re tracking each other in terms of…it sounds like the critical issue was really speed. Is that…or one of the critical issues and we’ll get to some of the other ones, I think, but am I hearing both of you correctly in that?
Jerry: You are. And a sense of certainty as well. it dawns on me that some of the things we ran into because…again, we didn’t know the site that well. There were a number of impediments that occurred during this period of time where we were getting it ready. We discovered a cable line that no one knew existed. That was going to cost some decent money to get relocated.
The stress that was going to be on a turn in the road along the site was great enough that they believed they would have to have a straighter road and that we would have to figure out how to expand the capacity and straighten the road which we did.
Andy: Adriana, your case is even more clear. I mean, the first time around basically, the community, San Marcos, did not deliver speed and you were with San Marcos in all that time. The second time you were ready to respond quickly. Am I once again hearing you correctly?
Adriana: That’s absolutely right. We went back and looked at where we had been and what we needed to do better, had it documented, had the memo written up and with us at the meeting so that when they said, “Look, this was the situation in 2012. What’s the situation now?” And we had the document, slid it across the table and said, “Here you go. Here’s the timeline.” And it takes…it took a significantly less amount of time than what they were told several years prior.
And they…it was that sense of certainty. And actually, the codename for this project was Project Endurance and that name came from the company because they said, “If you win this project, it will be because you have endured because you have run the gauntlet.”
Andy: Okay, interesting. I want to take you guys in a different direction here for a moment and Adriana, let’s start with you on this particular one. So from your perspective, how important were incentives to the company’s final decision here?
Adriana: They were. The incentives were important. This was a competitive situation. They were looking at other sites and to Jerry’s point he made earlier, the incentive announcement doesn’t mean they’re selecting you.
It just means that’s another checkbox if you will of items that they’re going down because they’re evaluating multiple sites at one time and multiple sites around the country because their distribution network is such that they could focus on the central US, they could focus on eastern, they could focus on west. And so the incentives were an important part and we worked with the company and the consultant on putting together the best package that we could, the city and the county. They did not pursue state incentives at the time and so it was a local incentive package which we put together and put it with…gave it to them within their timeline as they requested. But I think it was an important consideration in their final decision.
Andy: How about Jacksonville? Same question. How important were incentives to winning this deal?
Jerry: I think they were very important. Particularly at the end. We had to have all the other things in place and they wanted certainty relative to both development and to the incentives but as long as we had all the other things in place, it was a matter of then competing with other sites they were doing and it was important to them.
I mean, they were about to commit a total of 315 million dollars that were going to employ well over 2,500 people, 850 high wage jobs in a very important game changing company and we felt it was important and I know that they understand that what they’re doing has economic value because they can go many places to serve the same general population. So I think it was important. I think it did make the difference at the end once comparing the finalists and we’re really happy to have them.
Andy: Okay, excellent. I have two final questions I want to ask you guys. So the first question is I wonder if you can contrast your interaction with Amazon vers other companies that you’ve worked with and the two of you have worked with probably hundreds of companies between the two of you. Basically, how was working with Amazon different from other projects you’ve done over the years? Jerry, why don’t we start with you on this one?
Jerry: Well, on average, when we’re working with a company, we will get site visits three to six times. Sometimes even 10 or more where they’re evaluating so many different characteristics of the community a lot of it having to do with the people that they would bring and those that they would hire and skill sets and the like. In Amazon’s case, I think they’re looking at a different set of characteristics.
They have logarithms that determine how products get distributed, where it’s most efficient to do it and the like. And so they probably had already done the work. We had been providing information for a while but the characteristics of the work force, I think, they felt comfortable with before they ever entered into the discussion in some of the other areas.
So it was a little bit different having no site visit on site except from the developer was unusual but we had already developed a good relationship and had a lot of information flow. But it’s…they’re highly professional, really good people that we worked with along the way but it had to have a lot of trust on their part that we could deliver what we say and we had to trust them as well.
Andy: Okay. Adriana, your perspective once again? How was your interaction with Amazon different from other clients you’ve worked with?
Adriana: The interaction with Amazon was different in a couple of respects. We did have a site visit from them from company executives directly that first meeting and I think the purpose of it was to really stress how important it was to move quickly and the fact that they came back after being a finalist and not winning a project and then having the same company come back with a similar project…I’ve never seen that happen. I mean, it’s never happened to me. So that was unusual.
And then the speed. In economic development, projects can take three years from initial contact or that initial RFI to the final decision and in this instance, three months. And so the speed was another aspect that was different.
Andy: Just on the speed issue, this must’ve put a lot of pressure on both of your systems in terms of…both of them…really, you were telling me about a three-month dance that you were doing with this company and having a lot to do. Was that tough on your team? Was that challenging to get everyone in line so quickly?
Jerry: I’ll tell you, in our case, I think it was actually refreshing. When you’re going after a project, I think being able to rally, move quickly, have a strong sense of urgency actually brings the team together in really positive ways and frankly, lets you solve problem that you know you have to do quickly. So it doesn’t let somebody say, “Oh, I’ll get to that next week or the week after.” No, the team is all focused and I actually think that ended up being an advantage.
Adriana: I feel the same way. It was…there was no problem getting the team together. Everyone was excited. The city, the county. Again, we were coming off a loss with Amazon that the city and county were familiar with and so having another chance at bat, if you will, was this really strong, “We are not going to mess this up. We are going to win this one this time.”
Andy: So my final question here is I want you to imagine you’re advising another community on how to work with Amazon. You’ve shared a number of tips already but I’m wondering if you can summarize what tips you might offer to their economic development team.
Adriana: Tips. Be responsive, be extremely responsive, be flexible and be ready. Learn from your mistakes. If you have lost a project or look at your processes, figure out ways to make…streamline them and make them more efficient and highlight that.
That I think was one of the most impressive things that the company saw was that the community had learned from the past and made some changes and were ready to meet their needs.
Andy: Jerry, same question.
Jerry: Be very positive, develop relationships, be confident in your ability of your community and the team to get things done and communicate that effectively. I don’t think you have to overdo it. Be very professional in your approach and just be really ready to back up everything you tell them you can do. I think those are the most important elements.
Andy: All right. I think that is a great note to leave things on. Jerry, Adriana, I really sincerely have to thank you for openly discussing and talking about this work that you’ve done with a great, amazing company that has pledged to create another 100,000 jobs in the next 18 months and I think your comments will be very, very helpful to the economic development community. So thank you for doing this.
So those are the highlights of our conversation with Adriana Cruz and Jerry Mallot. Now, Patience, we did promise our listeners a guide to winning the next Amazon Announcement. So I want to see if we can piece together a couple of the themes, some of the best practices from both Adriana and Jerry’s experiences working with Amazon.
Patience: Number one, I think, has to be speed. Basically, if you’re not ready to run fast, this isn’t really a game that you want to get in. Both of these communities had to pull together and work really at a breakneck speed to meet some of the Amazon’s requirements.
Andy: So along the lines of speed, I think San Marcos’s story is particularly interesting. Basically, they had lost the competition back in 2012 because they weren’t able to move quickly enough for the company but when they got a second chance at this, they came up to bat again. They were ready, they had a better process and they were able to get things done quickly. So I totally agree with you on the speed assessment.
I do want to pick up on a comment that Jerry made where he used the term speed but also certainty.
Patience: Yeah, I think one of his final pieces of advice was all about certainty and I’m going to quote. He said, “Be confident in your ability to get things done and communicate that effectively. You have to be ready to back up everything that you tell them you’re going to do.”
Andy: All right, good. Let’s switch gears to incentives.
Patience: I think incentives were clearly pretty important to Amazon. For both of these project, the two in Jacksonville as well as the one in San Marcos, there really…amazon is investing a lot of money and creating a tremendous amount of jobs. So they’re looking for something from the community to say, “We really want you here.”
Andy: The projects were also clearly competitive. They were looking at other communities and incentives, we got the sense, really helped to drive that final decision.
Patience: Any final thoughts from you, Andy?
Andy: Well, in terms of growth, this is like no other company we’ve interviewed before. This is a company that is just moving at incredibly high speed and adding a tremendous number of projects at the same time.
Patience: I think it’s mind-blowing. It’s a 100,000 jobs in the next 18 months.
Andy: One thing that Jerry and Adriana both told us and we didn’t include this in the interview…both of them told us not to expect a lot of celebrating at the end of the road. Don’t expect big groundbreakings, ribbon cuttings with the mayor, that sort of thing.
In both cases, construction started quickly but the company then said, “Okay, we’ve got to move on to the next site selection project.”
Patience: So that is a wrap on lucky episode number 13 of the Project, inside corporate location decision.
Andy: A very sincere thank you to some key people. Of course, we’re going to start with Adriana Cruz and Jerry Mallot. They’re both incredibly busy professionals but we really appreciate them taking the time to share their success story with their economic development brethren.
Patience: Finally, we have to than Jeff Bezos and his leadership team at Amazon. They have built an incredible company that employs over 220,000 individuals and they’ve committed to adding over a 100,000 new jobs in the next 18 months. Some of those will be in San Marcos, Texas. Some will be in Jacksonville, Florida and some may be in your community if you have the chance to engage Amazon and follow Adriana and Jerry’s advice.
Andy: The Project is sponsored by DCI. We are the leader in marketing places and have served over 450 different cities, states, regions and countries. You can learn more about us at aboutdci.com.
Patience: We hope you will keep listening. There are many more projects to come in the year ahead.