Birmingham Doesn’t Need a Headquarters to Take a Bite Out of Amazon

Amazon set off something of an economic development beauty pageant earlier this year when it announced it would solicit bids from cities to host the company’s proposed second headquarters. The $5 billion dollar project could create 50,000 new jobs and transform the city that wins. Birmingham is among dozens of cities going after the development, and while it’s considered a long shot, the headquarters is not the only way Amazon could have a presence in the Magic City. Amazon has and continues to build sortation and distribution centers around the country. Experts suggest Birmingham could be a good candidate to land one.

The Birmingham Business Journal reported on this and editor Ty West explains what they found to WBHM’s Andrew Yeager.

Interview Highlights

How Amazon has expanded its logistics network:

“It’s really been mostly fueled by incentives across the nation … about $1.24 billion and counting in incentives that have really been granted to lure these distribution facilities to town. These are giant facilities, hundreds of jobs per facility. But what we did find in our research was kind of a mixed bag. Some markets had a lot of success [with job creation]. Other metros haven’t been so lucky.

What Mobile has seen as an Amazon facility prepares to open:

“Alabama got a pretty good deal. Alabama only paid about $1.9 million in in incentives and $1.3 million of that was just road improvements and infrastructure improvements that easily could have happened absent of this project. I think one reason for that is the type of jobs. They’re generally more low-paying jobs. These are specifically part-time jobs at the Mobile facility, most of them…One other reason, these are jobs at high risk of automation.”

Advantages for Birmingham in landing this type of project:

“I think one of them is you look at our interstate infrastructure. We have four major interstates that come through here. The railroad situation [is] another benefit. And also our location. If you look at the southeast, where Amazon’s distribution centers are now, there’s kind of a void in the mid-South. Birmingham’s around the middle. That’s a good sign…

“Most experts think that they want to be like Walmart. They want to reach everybody and they think Birmingham it’s probably going to be on their radar at some point.”

Consequences of Amazon coming to town:

“That’s another area where the results are kind of mixed and it depends who you are. Retail experts that we spoke with aren’t terribly concerned that them coming here would affect your traditional department stores and clothing retailers. They basically say, look, Amazon’s already delivering in 2 days. If they can have same day delivery because they have a fulfillment center, that’s probably not going to make the difference between somebody buying a jacket online versus a store. Where it could make a difference and have an impact though is in terms of groceries, in terms of drug stores and your more convenience-based purchases, that could be a game changer. If I need to stop and get milk on the way home, that’s one thing. If I can just go online and order it and have that milk waiting on me when I get home, that could start to trickle down and have an impact on the grocery stores.”