Houston's Amazon bid turns on 'Innovation Corridor'

Houston leaders hope to entice Amazon with a spot somewhere within the four-mile stretch of the Metro rail line that runs from downtown to the Texas Medical Center, an area they're calling the Innovation Corridor - and the city's best shot at winning the Seattle tech giant's $5 billion second headquarters.

The rail line cuts through a part of Houston that includes some of the city's largest companies and most prominent health care institutions, as well as Rice University, Hermann Park, the Museum District, Houston Community College, NRG Park and the collection of bars, restaurants and apartment complexes in trendy Midtown, according to a document outlining Houston's confidential proposal.

City officials won't say exactly where they want Amazon to plant a campus that could grow to more than 8 million square feet and house 50,000 high-paying jobs. But they have proposed multiple sites within the corridor, a slice of Houston that connects the city's intellectual and cultural assets in the heart of its ethnically diverse population and bustling business hub.

"What's remarkable is how concentrated all of this is in a four-mile-long area," said Bob Harvey, president and CEO of the Greater Houston Partnership, the group behind Houston's bid for Amazon. "Innovation Corridor seems to fit. It's just like, wow, this is what Amazon is looking for."

But Houston's proposal is competing with more than 230 bids that Amazon has collected from major cities in the United States, Mexico and Canada. In addition, Houston would have to overcome long odds to beat its rivals, including Austin, which could offer the company the same state-backed incentives, but also a vastly more vibrant technology sector from which to draw workers and ideas.

And while Houston's nascent technology sector has grown in recent years, companies like Apple, Google, Facebook and Samsung have brought hundreds of jobs to Austin, helping to build the critical mass of companies, skilled workers, entrepreneurs and capital that define innovation centers. Austin recently ranked No. 1 on a list of major U.S. cities in meeting Amazon's criteria, according to economic research firm Moody's Analytics. Houston came in at No. 52, its prospects hurt by low mass transit ridership across large swaths of the city, and quality of life factors including a higher crime rate and fewer restaurant and entertainment options per capita.

If the two Texas cities were competing for the next headquarters of General Electric, the massive industrial conglomerate that acquired Houston oil field service company Baker Hughes this summer, then Houston and its vast network of energy companies would have the edge over Austin, said Praveen Kumar, a finance professor at the University of Houston.

"Houston has a lot to offer," Kumar said, "but the kind of company Amazon is has an emphasis on attracting human capital. Houston just doesn't stack up the same way."

But local leaders say the region's concentration of traditional companies could be a selling point, providing Amazon, which prides itself as a disruptor that shakes up established industries, the chance to collaborate on technology with a vast network of energy, health care, manufacturing, logistics and space sectors here. CEO Jeff Bezos and his company could get the opportunity to tackle some of the biggest modern challenges, such as the sustainability of the world's energy resources and climate change.

"What disruptors need is access to the traditional industry model and the problems it creates that they can't imagine or conceive of from the outside," Harvey said. "People might say what interest would Amazon have in oil and gas, but energy is the issue of the day."

Local leaders have given Amazon its choice of undisclosed sites within the so-called Innovation Corridor, which, according to the document drafted by the Greater Houston Partnership, offers close access to two international airports, three interstates, 3 million workers, plus key game changers in business and an unparalleled array of amenities.

The document's 32 bullet points highlighted the nearly 100,000 people who work in technology-related fields as well as the region's low taxes, low cost of living, reasonable housing prices and eclectic neighborhoods and restaurants.

In particular, the document highlighted the city's racial and ethnic diversity, which, Harvey argued, should appeal to a company that wants to attract millennial workers to a tech industry that has come under fire for its ethnic uniformity, particularly in Silicon Valley.

"As Amazon seeks to diversify its ranks at the executive, manager and professional levels, there is no better place to locate than in Houston," city leaders said.

The Seattle tech giant's proposed campus, of course, would be an economic boon for any American city. But win or lose, Houston's leaders have said fighting for Amazon has challenged planners and developers to think about the future of the city and region, and say the bid may well become the catalyst for the kind of innovation ecosystem that pushes the local economy into new directions to underpin its long-term prosperity. If so, that would be welcome in a city that has harnessed innovations in oil and gas development to dominate the U.S. energy industry, but lacks a robust technology sector.

"The industrial-only town isn't where the decisions get made," said Paul Hobby, founding partner at Houston private equity firm Genesis Park. "The kings of medicine won't be life science guys. They'll be IT guys."