Why Miami’s Bid For Amazon HQ2 Is Much Stronger Than You Think

Analysts and bettors think Miami is a long shot to land Amazon’s HQ2. That is because they aren’t looking very closely at what Miami is offering.

Bookmaker Paddy Power puts Miami at 20 to 1 odds, lowest of any of the 20 finalist cities. A Seattle Times poll also ranks Miami as having the slimmest chance.

Speculation is that Miami falls short in three areas – financial incentives, transit, and a highly-educated workforce (our resort-town image may also play a part).

Dig deeper though, and you will see that these are actually three areas of strength for Miami, rather than weakness:

Financial incentives – Chicago is known to have offered up to $2.25 billion in taxpayer subsidies to Amazon.

Miami’s offer is much better. Instead of charging payroll tax and rebating it to the company over a decade (as Illinois would), there would be zero state income tax. With 50,000 employees earning $100,000 apiece, that is a savings of $2.5 billion over ten years, compared to the Illinois tax rate of about 5%.

There’s also the possibility of a Tax Increment Financing Deal if they build in the Overtown CRA area, which could be worth over $1 billion (putting Miami ahead of other areas with no income tax like Austin and Dallas). That is on top of incentives that the Beacon Council is offering.

Transit – Older cities like Washington D.C. have an expansive transit system in place that can get workers around the city, and to most suburbs they desire.

Miami has a unique proposition though – land with intensive zoning density available right in the urban core. There are at least three downtown sites with enough capacity to build office, housing and retail for nearly most of Amazon’s employees, allowing them to live, work, and play in the same area. Workers would never have to leave.

When they do need to travel though, Amazon would have excellent transit connectivity. At the Innovation District/Worldcenter site alone, there are four different rail systems: Brightline high speed trains to Fort Lauderdale, West Palm Beach, and Orlando. Tri-Rail through Dade, Broward and Palm Beach. Metrorail to Miami International Airport or Dadeland in 20 minutes. Metromover to Brickell and throughout downtown.

Educated Workforce – Cities like Boston have a better established university system that churns out college grads (although Miami is on the rise in that area).

Miami though, is simply a more attractive place to live for most of those same college graduates. Study after study shows that Miami is a magnet – particularly for millennials, who are willing to spend more of their income on housing to live here.

If anything, Miami hasn’t been attracting even more millennials because there aren’t yet enough high-paying jobs. Amazon’s arrival changes that.