The Maneater

UM System supports Gov. Greitens’ Amazon proposal

A headquarters in Missouri could bring opportunities to MU students.

UM System President Mun Choi endorsed Gov. Eric Greitens’ proposal for Amazon to expand its new headquarters to the I-70 corridor of Missouri.

In September, Amazon announced that it is planning to invest upward of $5 billion in building a second headquarters, called HQ2, away from its current home in Seattle, according to The Seattle Times.

“I know that the 76,000 students, more than 23,000 faculty and staff and the more than 650,000 alumni will support this initiative to create an innovation ecosystem in the state,” Choi said in an email sent to the MU community Oct. 19. “This is an outstanding proposal, and we’re very excited to be a part of the state of Missouri’s proposal to create an innovation corridor from St. Louis to Kansas City by way of Columbia that benefits the entire state of Missouri.”

Amazon requested that states and regions submit proposals on which areas they would like the company to expand to.

“Amazon invites you to submit a response to this Request for Proposal in conjunction with and on behalf of your metropolitan statistical area, state/province, county, city and the relevant localities therein,” according to Amazon’s request for proposals. “Amazon is performing a competitive site selection process and is considering metro regions in North America for its second corporate headquarters.”

Amazon has received 238 proposals from the U.S., Canada and Mexico, according to CNN. Amazon will announce the winner in 2018.

In Greitens’ proposal to Amazon, he offered not only St. Louis and Kansas City, but the whole I-70 corridor between the two metropolitan areas.

“My team fully and equally support the two proposals submitted by our major metropolitan areas, Kansas City and St. Louis,” Greitens said in the proposal to Amazon CEO Jeff Bezos. “While each proposal stands on its own, I also encourage you to envision what Amazon could achieve by partnering with us to unleash the combined strength of the entire State of Missouri.”

Grietens’ also argued that if the Hyperloop project were to select the I-70 corridor of Missouri, the area would be made even more desirable for HQ2.

“A Hyperloop transportation system between St. Louis and Kansas City would invigorate the region and connect Amazon to a world-class multimodal transportation network and a workforce of nearly three million people,” Greitens said in the proposal.

If Amazon were to select Missouri for its new headquarters, Saku Aura, associate professor of economics, said that it would give MU students a leg up in the Amazon hiring process.

“For the university, it can actually be potentially beneficial for our reputation in the long run because, presumably, there would be a lot of local hiring,” Aura said. “That would mean that, not just the Columbia campus, but universities in this area, would have an insider path to Amazon jobs, and that has to be good for our reputation.”

If the new headquarters were to be built in Missouri, Choi believes that MU would be able to provide workers to fit Amazon’s requests.

“Our campuses are dedicated to preparing future leaders who can meet Amazon’s unique workforce needs,” Choi said in the email.

The UM System communications office could not be reached for a comment on the possible effects it would have on MU.

However, Aura said that while Amazon coming to Missouri would be beneficial for the state, it most likely won’t happen.

“The whole corridor proposal is probably not what they are looking for,” Aura said. “They’re looking for a metropolitan area.”

According to Amazon’s request, they are looking for somewhere with “metropolitan areas with more than one million people, a stable and business-friendly environment, urban or suburban locations with the potential to attract and retain strong technical talent, [and] communities that think big and creatively when considering locations and real estate options.”

Aura said that while St. Louis and Kansas City have relatively cheap housing and land, they don’t likely have the universities or large population that Amazon is looking for.

Even though MU may have the students that Amazon is searching for, Columbia isn’t a metropolitan area.

“While Washington University is world class, it probably isn’t large enough,” Aura said. “It’s not like the University of Washington or the University of Minnesota, so they probably don’t reap enough graduates of, say, engineers or computer scientists to be that attractive.”

If Amazon were to come to Missouri, the state’s economy would benefit overall and bring new, high-paying jobs. However, there are still some downsides to this possibility.

“Overall, it has to be a positive thing for a metropolitan area,” Aura said. “A logical operation pops up and creates a lot of high paying jobs. Unfortunately the downside to that is that a lot of people, traditionally down the income ladder who are not property owners, who rely on rental housing, will actually end up being squeezed from the market, which has clearly happened in Seattle.”

Aura explained that one of the main downsides would be that the Missouri population would not be able to easily handle the large amount of subsidies the new headquarters demands. Taxes would increase for the general population.

“And I think you need a very large state to be able to afford the subsidies because then when you divide those subsidies per taxpayer, that number won’t be that huge,” Aura said. “If they’re looking for something in subsidies for around one billion dollars, that’s going to be much easier to afford for California, New York or Florida than Rhode Island or Vermont or North Dakota.”

Aura also explained that the jobs created by Amazon could possibly attract outside workers and not help lower the unemployment rate.

“The unemployment in Missouri is not concentrated on people who know functional programing or whatever Amazon is right now looking for,” Aura said. “So, I think that it would create jobs, but a lot of those jobs would be for people who are moving to the area and chasing those jobs.”

But until 2018, no one but Amazon will know which proposal it will accept.

“I’ve made some predictions and no one knows what’s going to happen,” Aura said. “So it’s going to be interesting to see in the next couple of weeks what they decide.”

Edited by Sarah Hallam | shallam@themaneater.com

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