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MetroWest could see benefits, drawbacks of Amazon HQ2 bid

MetroWest could see benefits, drawbacks of Amazon HQ2 bid

METRO WEST DAILY NEWS – Amazon’s quest for a second headquarters has cities across North America vying for a chance to get 50,000 new jobs over 20 years, including a regional effort in MetroWest.

Some experts say the online giant’s pitch is a gamer changer in economic development, but many worry about increased traffic congestion and rising costs for housing.

“The Amazon opportunity is the ‘holy grail of employer attraction,’” said Paul Matthews, executive director of the 495/MetroWest Partnership. “There’s never been an open request for proposals like this for a facility of this scale and importance in economic development. It really is in a class by itself.”

Spearheaded by the Marlborough Economic Development Corporation (MEDC), the five-community partnership – called the 495 Crossroads Task Force – calls for the creation of a “north campus” in Marlborough and Northborough and a “south campus” in Southborough and Westborough across 10 different properties that Amazon could either build or lease. Hudson is also involved in the effort, but no properties are listed.

The Seattle company is promising $5 billion of investment and 50,000 jobs in whichever North American region it chooses. With applications due last Thursday, dozens of U.S. states and Canadian provinces are competing to land the online giant’s second hub, dubbed HQ2.

More than 25 different sites have been proposed in Massachusetts alone, including Boston, Foxborough and Worcester.

With access to major highways and Boston nearby, MetroWest officials are always looking to attract new businesses to boost the local economy. Such corporations bring business to smaller vendors and stores. Last year, the 495/MetroWest region saw a 2.1 percent growth in regional employers, according to the partnership.

THE ISSUE: A regional effort in MetroWest is seeking to attract Amazon’s second North American headquarters, which could bring 50,000 jobs over 20 years. The proposal offers space in Marlborough, Northborough, Southborough and Westborough.

THE IMPACT: Some are worried about increased traffic congestion, inadequate public transportation and a rise in housing costs. But many officials say the benefits outweigh the negatives.

Economic development has three foundations: Employer retention, employer expansion and employer attraction, Matthews said.

One example is a regional effort to get GE Healthcare Life Sciences to open its headquarters in Marlborough.

“We sat down with them and explained the highly skilled workforce we have here and the advantages of locating here,” Matthews said.

The 495/MetroWest Partnership, Framingham State University and Daily News are working together to conduct the 495/MetroWest Employer Survey and Forecast. In the past, the surveys highlighted the need to improve workforce development and transportation, among other trends and topics.

Michael Harrison, an associate business professor at Framingham State University, said the area is in good position to fill the demand for the 50,000 jobs.

“They are looking for a labor force that matches specifically their needs,” he said. “We are well positioned here. One of the draws is a company can potentially pull its workforce from all three areas (Boston, Worcester and MetroWest).”

The corporation used some of the data from last year’s survey in the proposal to Amazon.

“We are able to document employers looking at expanding here, the employer confidence in the region and the specific answers that existing employers feel are strengths,” Matthews said.

Tax incentives

The pursuit of Amazon will likely include tax incentives on both the state and municipal level. The MEDC says the five communities are open to tax incentives for the Amazon HQ2 through Tax Increment Financing (TIF) agreements.

The 495 Crossroads pitch does not detail any specific deals.

“The time-frame for reaching a TIF agreement varies slightly by community, but the city of Marlborough and town of Westborough are committed to executing TIF agreements in four weeks or less, and all communities will work aggressively to meet the needs of the Amazon HQ2 project,” the bid reads.

In 2015, GE Healthcare Life Sciences received such tax breaks. GE’s health care division focuses on medical imaging and creates tools and technologies for use in research, manufacturing and diagnostics. The company received tax incentives valued at $3.15 million from the state. In exchange, GE has committed to creating at least 175 jobs in Massachusetts and maintaining them for a minimum of five years.

Marlborough also signed off on a Tax Increment Financing deal for GE, which is expected to save the company about $124,500 in tax payments over the course of 10 years.

Anthony Kotarski, commercial operations executive for GE Healthcare, wrote in a letter to MEDC that the company was drawn to Massachusetts for its highly educated workforce, active investor community and supportive government leadership.

“We quickly landed on Marlborough because it is a center for innovation and is within easy commuting distance from a number of desirable residential locations that are attractive to both our current and future employees,” he wrote. “Bringing our site to Marlborough gave us the ability to build world-class, laboratory and manufacturing facilities that will help us attract top talent in the community.”

Transportation

The area’s public transportation is not quite ready for Amazon’s demands, said Ed Carr, administrator of the MetroWest Regional Transit Authority.

“That is not to say that the bones for it aren’t in place. The infrastructure is here to do it, but the service itself is woefully underfunded,” he said. “We would need more operating money.”

The authority services both Marlborough and Southborough, while Westborough is serviced by Worcester Regional Transit Authority.

Such business will likely bring an influx of traffic, Harrison said.

“That always come up, especially areas like this where it is already developed,” he said. “They are not starting with green space.”

Matthews said a lot of infrastructure improvement is already in the pipe line, such as the reconstruction of the Massachusetts Turnpike and Interstate 495 interchange.
“That is a critical piece of that puzzle,” Matthews said. “That is not in response to Amazon. That interchange will be rebuilt.”

Housing

In Seattle, housing prices have soared faster than anywhere else in America, driving some low- and even middle-income residents beyond city limits. The company has expanded from a workforce of about 5,000 to more than 40,000 in 33 buildings in that city.

Robby Stern, president of Puget Sound Advocates for Retirement Action, which advocates for seniors, said rising housing costs have forced two of his organization’s board members from the city. The Seattle Times reported in September that the median house price in the city was $730,000 – double what it was five years ago.

“Bringing a lot of new, good-paying jobs to town, you have to view that as being a positive development,” Stern said. “But the changes that have happened have created Seattle as a less livable place for categories of people, and that’s not what I want for Seattle.”

Matthews said one of the strengths of the 495/MetroWest region is a diversity of housing, including for young families looking for good school systems.

“What we are seeing is additional amenity development, including housing geared toward families, young workers without kids or older skilled workers who are looking to downsize,” he said.

‘Open for business’

Marlborough Mayor Arthur Vigeant says the region would be able to handle the growth of Amazon over the 20 year proposed period if selected.

“We could handle the initial facility, but as it grows we will have to look to the entire region,” he said.

He has a simple message for Amazon: The city and region is open for business.

“I think we have a great proposal and I am glad to be a part of this regional effort,” the mayor said.