Exclusive: Inside Colorado’s bid for Amazon HQ2

DENVER – Colorado’s bid for Amazon’s second headquarters touted the pipeline of talented students at the state’s universities and the quality of life here in its attempt to lure the company, but documents show there are concerns over low unemployment rates, infrastructure and high costs of living—which could rise even further should the company decide to come to the Centennial State.

A response to a joint open records request made by Denver7 and The Denver Post reveals some of the details of Colorado’s bid, which could bring up to 50,000 new jobs and billions of dollars to the state should Amazon decide to build its so-called HQ2 here.

But not all of the state’s bid to Amazon was released in the records request, which was received Wednesday afternoon. The Metro Denver Economic Development Corporation said Thursday it would release a redacted version of the proposal at a meeting scheduled for next Thursday.

Among the hundreds of pages of documents already received by Denver7 and The Post are signs of the lengths the state went to in order to put together an organized plan.

They show that the Colorado Office of Economic Development and International Trade (OEDIT) collaborated with state universities, the state department of transportation, a local economic development corporation, and the state’s largest utilities company—among many others—to put the proposal together between early September and mid-October, when the bid was submitted to Amazon.

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According to emails between the OEDIT and the Metro Denver Economic Development Corporation, there was a focus on showing Amazon how talented Colorado’s pool of graduates is.

They show the OEDIT was putting together data on how many students were graduating from area universities, the field they were getting degrees in, and their cultural makeup.

The Metro Denver Economic Development Corporation was looking for a one-page summary “summing up Colorado’s competitive workforce,” according to the emails, and also asked OEDIT to include statistics regarding the number of people moving to Colorado, seeing them also as potential talent.

But the corporation’s vice president, Sam Bailey, also in the emails noted concerns over the state’s record-low unemployment rate and its ability to have enough skilled workers to fill 50,000 jobs—concerns which permeate the documents.

“We want to be able to speak to the 2.3% unemployment rate and say that regardless of the low number, we still see migration into Metro Denver,” an email from Bailey to OEDIT said. “Another stat that would be helpful is the net new job growth year-over-year in the Metro Denver area. Seeing growth of jobs allows us to show that we naturally have a growing workforce and that companies have been able to scale successfully.”

The push by OEDIT to elevate the state’s talent pool involved communications with the University of Colorado-Boulder and the University of Denver, the documents show. The heads of those universities sent letters to be used in the pitch to Amazon early on, and the OEDIT continued to compile information about how the state’s high-ranking schools could benefit the company.

“I would love to see highlights on how CU is going to feed the talent pipeline – specifically in management and executive positions,” an email between OEDIT staffers said. “Additionally, it would be great if they could emphasize any unique tech-related programs/concentrations that would differentiate their graduates from others throughout the US. Any additional ‘bragging points’ are appreciated!”

Beyond the educated work force, also included in the documents were Photoshop mockups touting the quality of life in Colorado. Though the source of the graphic is unclear, one included in the documents shows a road surrounded by evergreens with the following declarations overlayed: “No. 1 most active state; Lowest obesity in the U.S.; Denver: No. 2 best city to live in the U.S.; No. 2 best state to live in; No. 4 happiest state; No. 1 for arts participation.”

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The documents received by Denver7 and The Post also show the state looked at an independent study put together by Regional Economic Models, Inc. (REMI) that compared the feasibility for HQ2 in some of the cities that were putting together bids, though it’s unclear in the documents how much weight OEDIT put into the report.

One document from REMI looked at 10 possible cities, and said next to Denver: “Mountains!!! Vibrant, talent.” Also included on that list were Minneapolis/St. Paul (“strong headquarters city”); Austin, Texas (“Epic tech talent, perfectly weird, Whole Foods”); and Chicago (“best geographic location, aggressive economic development”).

The OEDIT also put together a fact sheet based on REMI’s analysis of how Amazon would impact Connecticut in particular.

That analysis found that there would be a large initial increase in construction jobs, though the facts sheet said that “construction is viewed as a temporary phase, and as construction phases out, these impacts will fade.”

The OEDIT fact sheet looked at three possible scenarios under the REMI analysis.

One assumed that Amazon would hire people over five years, and found housing prices would rise steadily, though around $13 billion in revenue would be generated.

Another model assumed the same amount of job creation, but over 10 years, and found similar outcomes but with about $4 billion less in incentives.

A third scenario assumed only 2,500 employees would be hired over five years—a “worst case scenario,” according to the fact sheet—and found that the state would see a revenue increase over 15 years of $869 million.

“Given the modeling outcomes, the REMI team concludes that state governments and local partners should work with Amazon to negotiate an incentive package that would promote hiring as many employees within as short of a timeframe as possible,” the end of the OEDIT fact sheet stated.

The analysis was not commissioned by any state, REMI told Denver7 Thursday. A REMI researcher said the analysis “should not be taken to apply to the specific situation of any location.”

“It was an exercise meant to illustrate the key issues and methodologies involved in analyzing the impacts of Amazon HQ2.”

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Colorado Gov. John Hickenlooper said in mid-October that eight locations were submitted in the state’s proposal, though the documents released to Denver7 and The Post do not contain information about the specifics of the locations, nor any possible economic incentives the state may have floated to Amazon. Next week’s release is expected to contain more of that information.

“I’m confident our proposal will be as competitive as any and will build on the current investment Amazon has made in our state. We believe that Colorado, and this region, can deliver more for Amazon than any other in North America,” Hickenlooper said at the time. “Our economy, workforce readiness initiatives, educational institutions and quality of life will all be stronger and more vibrant with a large Amazon presence in Colorado.”

But roads, infrastructure, and rents that are expected to rise with the addition of HQ2 are among the concerns, though Bailey told Denver7 earlier this year that additional road construction was not part of the state’s submission.

“We’re not looking to add a new interchange or interstate exit because we don’t think we have to,” he said at the time. “We’ve leverage the sites and the strengths that they have already to support the new jobs that will be created.”

But a Colorado State University economist said there would be “no free lunch” when it comes to the influx of people on the roads and looking for housing.

Analysis from ApartmentList that looked at 15 cities vying for HQ2 showed Denver’s rent would rise by an additional 1.1 percent each year.

The concerns from some come in contrast to the highlights championed by others. The New York Times, for instance, touted Denver as the place Amazon should pick for HQ2, citing the city’s population, job growth and labor pool.

Amazon is expected to name the HQ2 location sometime next year. It has said the new headquarters would cost at least $5 billion to build and operate.

Additional documents from the request made by Denver7 and The Denver Post could be released Monday.