Amazon is getting pounded from the left, right, and center for the outcome of its HQ2 contest. A “sham,” a “stunt”, and a “bait-and-switch” are just a few of the many insults used to describe the company’s decision to plant new offices in two rich areas that, as the saying goes, will now get richer.
Amazon received 238 bids for HQ2. New York City, Northern Virginia, and Nashville—which is getting an operations outpost— won. That means there are 235 losers. But the critics are missing the silver lining: There’s a lot of potential value in losing, for those cities that are willing to make the most of it.
The 1991 competition for a United Airlines maintenance base was the Amazon HQ2 of its day. The two finalists were Oklahoma City and Indianapolis. Oklahoma City, civically desperate in the wake of the 1980s energy bust, was sure it would win. Its subsidy package was the best. Its voters had even approved a temporary sales-tax increase to raise $120 million for United.
United picked Indianapolis. After some prodding, United told Oklahoma City’s leaders that the reason they lost was that it couldn’t imagine its employees living there. Oklahoma City’s leaders took this tough feedback to heart and decided to do something about it. They asked their voters to once again approve a temporary sales tax—but this time to invest in their own city instead of in United Airlines subsidies. This turned out to be the first of three major capital programs, each totaling hundreds of millions of dollars, that helped transform Oklahoma City for the better. In his new book, The Next American City, the former mayor Mick Cornett calls United Airlines “the best thing that never happened.”