RESEARCH TRIANGLE PARK – One of the world’s most authoritative voices on business is not giving the Triangle much of a chance to win the bidding for Amazon’s $5 billion HQ2 project.
In an analysis based on analysis of data across six categories, from “culture fit” to cost of living and technology workforce, The Wall Street Journal ranks Raleigh in the third of five tiers for 19 of the 20 finalists recently announced by Amazon. (Toronto is not included.) Dallas ranks as No. 1.
Some of the conclusions will come as a surprise to people who have touted the Triangle as a high-tech hub for years.
For example, the Triangle scores lowest of the low in the graphical breakdown for “college educated” and tech labor force.
The Triangle routinely rates high in studies regarding college degrees, and economic developers tout the region’s labor force capabilities, citing not only the region’s major universities (such as Duke, UNC-Chapel Hill and NC State) but also the presence of tech giants IBM, Red Hat, Lenovo, Cisco, Cree, and SAS as well as a burgeoning life science industry.
Amazon did clarify that the selection of “Raleigh” as a finalists included proposals from the Triangle.
The Triangle/Raleigh did score well in four categories:
- State tax rank
- Fiscal health
- Cost of living
- Culture fit
Raleigh’s ranking as a potential winner has varied widely across numerous reports.
The WSJ notes that a wildcard in the site selection will be the importance of economic incentives. The newspaper also points out that Amazon will soon begin face-to-face meetings, touring potential sites and to “negotiate incentives” in a process “expected to take months.”
The other tiers
In addition to Dallas, the other first tier cities included the three in and around Washington, D.C.
Atlanta, Boston and Miami were in the second tier.
Los Angeles, Indianapolis and Denver join Raleigh in the third tier.
Chicago, Austin New York and Columbus, Ohio make up the fourth tier.
The bottom tier includes Pittsburgh, Philadelphia, Nashville and Newark, N.J.
The rankings are based on requirements spelled out on the original Amazon request for proposals last year “using an equally weighted index to average the cumulative scores.” The data was Green Street Advisors, Real Estate Analytics.
The WSJ’s criteria for the ranking:
- COLLEGE EDUCATED: Percentage of population with a college degree multiplied by total population.
- TECH LABOR FORCE: Total labor force in a tech occupation. Includes tech jobs not in the tech industry.
- FISCAL HEALTH: Cities are scored on metrics including ratio of general-fund balance to expenditures; ratio of pension contributions to total government-wide revenues; change in unemployment rate in 2015; and change in property values in 2015.
- COST OF LIVING: Estimated cost of living for middle-management households by weighting different consumer-expenditure categories.
- CULTURAL FIT: Sites that reflect ‘Cultural Community Fit’ and ‘Community/Quality of Life’ as outlined in the Amazon request-for-proposals. Strong universities, diverse population, recreational opportunities and an overall high quality of life. Excludes government incentive packages.
- STATE TAX RANK: Rank of tax rates (including corporate, income and property taxes). One is lowest-tax state, 50 is highest-tax state.
Note: The WSJ story is behind the paper’s paywall for non-subscribers.