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Did Baltimore really have a shot at Amazon HQ2? In a word, yes

Coming as it did amid a Baltimore PR death spiral (freezing classrooms, corrupt cops, a patient dumped on the street in a hospital gown and socks, etc.), many are now acting like the city’s bid to get Amazon’s second headquarters was a pipe dream all along. Many of the naysayers look at Mayor Catherine Pugh’s firing of Police Commissioner Kevin Davis the morning after we lost out and assume a connection between company’s decision and Baltimore’s staggering homicide rate.

Amazon did mention crime as something it would consider in its formal request for proposals, so it’s possible that played a role here. Company officials have reportedly agreed to brief the city on where its bid fell short, so we’ll find out sooner or later. But crime rates were included merely as a subpoint in the eighth of nine major categories of information the company asked for. The document overall is much more focused on the availability of a suitable site, the incentives a state and city might provide, and a host of other factors including the quality of the workforce, transportation infrastructure (particularly mass transit) and cost of living.

We know Baltimore was pitching a site with ample space and all relevant approvals at Port Covington (which includes the location of The Sun’s printing plant, for which we have a long-term lease). We know that Gov. Larry Hogan and Mayor Pugh were both enthusiastic supporters of the proposal, and we now know that Mr. Hogan was willing to put $5 billion in tax incentives and infrastructure spending on the table to sweeten the deal, which appears to be among the most generous offers on record.

So what about the rest of the factors — an educated workforce, good transportation options, affordable housing and the like. Do we compete?

Absolutely.

With the help of The Sun’s data team, we gathered information on how Baltimore stacked up against the cities in the top 20 in several of the areas Amazon said it was considering. Even without knowing how the company weighted the various factors it mentioned, we can say this much: In every single category, Baltimore beats out other cities that are still in the running.

(Note: We omitted Toronto from our analysis because of the difficulty in finding comparable data sources. Of course, this may be indicative of reasons why Amazon ultimately wouldn’t want to pick a site in Canada, given the different systems of taxation, regulations, health care, etc.)

Business climate

Amazon said “a stable and business-friendly environment and tax structure will be high-priority considerations.” To quantify the business climate, we chose the Tax Foundation’s annual state business tax climate rankings, which evaluate not just the rates of taxation but also the efficiency, clarity and user-friendliness of state systems from the perspective of business investment. One could certainly argue that Baltimore City would rate as less business friendly than the rest of the state, given its rates of taxation, but that is true of big cities generally, so we considered the state rankings to be a generally fair basis of comparison.

Miami, Dallas and Austin all do well on this metric, which is not surprising: They are in states without an income tax. Indianapolis, the capital of an aggressively pro-business state, does well, and so do Nashville and Denver. But Baltimore beats out five of the top cities, including Washington, D.C., and New York City, both of which are generally thought to be top contenders.

Tax climate

2018 Business Tax Climate Index (Overall Rank, by state)

Source: Tax Foundation



CITYTAX CLIMATERANK
Miami, Florida41
Indianapolis, Indiana92
Raleigh, North Carolina113
Austin, Texas134
Dallas, Texas134
Nashville, Tennessee146
Denver, Colorado187
Boston, Massachusetts228
Philadelphia, Pennsylvania269
Pittsburgh, Pennsylvania269
Chicago, Illinois2911
Northern Virginia3112
Atlanta, Georgia3613
Montgomery County, Maryland4314
Baltimore, MD4314
Columbus, Ohio4516
Washington, DC4717
Los Angeles, California4818
New York City, New York4919
Newark, New Jersey5020

* by state



Cost of living

Amazon asked for a great deal of information about costs of living — no doubt related to the massive run-up in Seattle housing prices due in large part to Amazon’s massive growth. Some of the smaller, dark horse cities on Amazon’s list do best on the Census Bureau’s cost of living index, including Indianapolis, Dallas, Nashville and Columbus, Ohio. But among the East Coast sites, Baltimore does quite well. It beats out fellow Acela-corridor contenders Philadelphia, Newark, New York and Boston. Among the worst in this category: Montgomery County and Northern Virginia.

Cost of living

The average cost of living in the US is set at 100.

Source: U.S. Census Bureau (Cost of Living Index--Selected Urban Areas: Annual Average 2010) / Sperling's best places



CITYCOST OF LIVINGRANK
Indianapolis, Indiana87.21
Nashville, Tennessee91.72
Dallas, Texas91.93
Columbus, Ohio924
Austin, Texas95.55
Atlanta, Georgia95.66
Denver, Colorado103.27
Pittsburgh, Pennsylvania104.18
Raleigh, North Carolina104.29
Miami, Florida10610
Washington, DC107.911
Baltimore, MD110.812
Newark, New Jersey111.613
Chicago, Illinois116.914
Philadelphia, Pennsylvania124.915
Boston, Massachusetts132.516
Los Angeles, California136.417
Montgomery County, Maryland142.818
New York City, New York154.319
Northern Virginia158.620

* data for Northern Va and Montgomery County from Sperling's Best Places



Quality workforce

The talent pool of highly educated workers, and the ability of a region to produce and attract more, was clearly of prime interest to Amazon, given its desire to hire as many as 50,000 people with average salaries in the six figures. The company asked bidders a lot of questions about their educational systems (both higher and K-12), noting, “a highly educated labor pool is critical and a strong university system is required.”

This measure is where the Washington region truly shines. Montgomery County, where nearly 60 percent of adults have bachelor’s degrees, is far and away better than the competition. Washington, D.C., is the only place that comes close.

To be conservative, we considered Baltimore City’s educational attainment levels alone without factoring in the suburbs. Even so, it still edges out top-20 cities Miami, Indianapolis and Philadelphia and isn’t far behind Dallas and Los Angeles.

Educational attainment

Percentage of individuals in 2016 who have achieved a bachelor's degree or higher levels of education.

Source: ACS 2016 Estimates



CITYBACHELOR'S OR HIGHERRANK
Montgomery County, Maryland59.2%1
Washington, DC56.8%2
Northern Virginia50.2%3
Austin, Texas49.2%4
Boston, Massachusetts48.4%5
Denver, Colorado47.4%6
Raleigh, North Carolina47.2%7
Nashville, Tennessee39.2%8
Newark, New Jersey39.0%9
Chicago, Illinois38.5%10
Atlanta, Georgia37.7%11
New York City, New York37.0%12
Columbus, Ohio35.3%13
Pittsburgh, Pennsylvania34.6%14
Los Angeles, California32.8%15
Dallas, Texas31.6%16
Baltimore, MD30.8%17
Miami, Florida30.5%18
Indianapolis, Indiana30.1%19
Philadelphia, Pennsylvania28.6%20


Transportation

Amazon’s RFP suggests the company is extremely interested in how its employees will get around. The company outlined specific requirements when it comes to access to highways and mass transit, and the availability of flights at an airport within 45 minutes of the new campus to Washington, New York, the San Francisco Bay area and Seattle.

We looked at several measures to gauge the relative transportation infrastructure of the top 20 cities, and once again, Baltimore beats out plenty of those still in the HQ2 hunt.

Average daily commute times are lowest in some of the small cities on Amazon’s list — such as Columbus, Indianapolis and Raleigh — and they’re the worst in the Washington and New York regions. Baltimore is, somewhat astonishingly, worse on this measure than Los Angeles, but it beats out other presumed top contenders including Atlanta, Boston and Chicago.

Commute times

Average commute times: mean travel time to work of workers 16 and over

Source: U.S. Census Bureau / DataUSA



CITYCOMMUTE TIMESRANK
Columbus, Ohio23.51
Indianapolis, Indiana24.82
Raleigh, North Carolina25.43
Austin, Texas26.44
Pittsburgh, Pennsylvania26.55
Nashville, Tennessee276
Denver, Colorado27.37
Dallas, Texas27.98
Miami, Florida28.59
Los Angeles, California29.610
Northern Virginia (Fairfax County)29.911
Baltimore, MD30.512
Atlanta, Georgia3113
Chicago, Illinois31.314
Philadelphia, Pennsylvania31.515
Boston, Massachusetts3216
Montgomery County, Maryland32.417
Newark, New Jersey32.718
Washington, DC34.419
New York City, New York35.920


Many assume that Baltimore’s lack of a cohesive mass transit system on the order of what’s available in New York, Washington or Boston helped kill our bid. Amazon officials reportedly told Detroit that was a factor there. And by no means are we close to the top of the pack when it comes to how many people use public transportation to get to work, but we’re not bad either.

No surprise, New York is tops when it comes to the percentage of people who use mass transit to get to work — by far. But Baltimore would rank eighth among the Amazon cities, and some of those that made the list (Indianapolis, Raleigh, Nashville, Columbus, Dallas, Austin) are downright pathetic on that score.

Transit

Percentage of employees who use public transportation to get to work

Source: U.S. Census Bureau



CITY% OF WORKERS WHO USE TRANSITRANK
New York57%1
Washington37%2
Boston34%3
Chicago28%4
Newark26%5
Philadelphia26%6
Northern Virginia22%7
Baltimore18%8
Pittsburgh17%9
Montgomery County16%10
Miami11%11
Los Angeles10%12
Atlanta10%13
Denver7%14
Dallas4%15
Austin4%16
Columbus3%17
Nashville2%18
Indianapolis2%19
Raleigh2%20


As for airports, we again chose a conservative metric for Baltimore, just giving the city credit for BWI and not the two Washington airports. Even so, its annual passenger traffic is more than double (and in some cases, nearly triple) that of Austin, Nashville, Raleigh, Indianapolis, Pittsburgh or Columbus. And consider this: Amazon specifically mentioned the need for easy flight connections to Washington and New York, both of which are basically irrelevant here, even if we never get maglev or hyperloop lines.

Airport traffic

Passenger volume of airports in 2016

Source: Airports Council International North America



CITYPASSENGER VOLUME 2016RANK
New York122,759,5261
Newark122,759,5261
Atlanta101,491,1063
Chicago99,171,0034
Dallas78,572,2605
Los Angeles74,937,0046
Washington68,334,6257
Denver54,014,5028
Montgomery County46,835,7239
Northern Virginia44,511,09310
Miami44,350,24711
Boston33,515,90512
Philadelphia31,444,40313
Baltimore23,823,53214
Austin11,897,95915
Nashville11,673,63316
Raleigh9,943,33117
Indianapolis8,511,95918
Pittsburgh8,128,18719
Columbus7,288,03020


The big picture

From the data alone, there’s no way to argue that Baltimore should have been the obvious choice for Amazon. Other cities on the company’s list are better on all the individual components. But you can certainly argue that the city was at least as deserving of a place in the top 20 as some of those whose bids did make it. A simple average of the cities’ rankings on the data we looked at is presumably not what the company would have done, as it would surely have weighted some factors more than others. But as a rough gauge, it suggests that Baltimore looks better on paper than either Los Angeles or Philadelphia in the measures the company said it cares about, and it isn’t far behind New York or Columbus.

Amazon has made its initial cuts, and there’s no point in arguing now. But we shouldn’t beat ourselves up, either. We have every right to think we could have made the list.

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