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Losing bid for Amazon HQ2 was still a win for Toronto, advocates say

Toronto’s failure to land a new Amazon “headquarters” won’t slow the city-shaping tech boom that could still include a major Amazon component, say observers inside and outside the local bid.

“This list of 20 finalists was not really a list (of candidate cities) for HQ2,” or a second Amazon headquarters, said Richard Florida, the U of T urbanist who helped craft Toronto’s bid, in an interview Tuesday.

The Long Island City neighborhood in the Queens borough of New York, Nov. 6. Amazon has chosen the neighborhood for one of its two new headquarters locations. (JOSHUA BRIGHT / THE NEW YORK TIMES)

“This was a list of places Amazon really thinks they’re going to put something. We should compete to get whatever that is but, in reality, the key to our long-term success is to create the next Amazons in Toronto, not lure the current Amazon.”

On Tuesday, the Seattle-based online retailing juggernaut capped a yearlong competition to host its second headquarters by announcing it will split the hotly sought prize between two cities — Crystal City, Va., a suburb of Washington, D.C., and Queens in New York City.

Each stands to eventually gain up to 25,000 new jobs and billions of dollars of potential investments from Amazon and companies that support it. Nashville will get a 5,000-job operations centre, the company said.

Toronto was the lone Canadian entry on Amazon’s 20-city shortlist. It also stood out for making its bid details public and for not offering the millions, in some cases billions, of dollars in promised tax breaks and other incentives many U.S. cities and states waved at the explosively growing firm.

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Florida said he expected either New York City or Washington, D.C. would win Amazon’s unprecedented contest but was surprised they split the prize.

He was on the board of Toronto Global, the agency that developed the Toronto-area bid, but resigned so he could criticize U.S. mayors and governors for sparking an incentives bidding war with precious public dollars.

“I’ve told (Toronto officials) since day one that Amazon was cloud-sourcing information to make a whole series of corporate location decisions, not just headquarters, and that Toronto is dating Amazon, getting to know Amazon,” said the New Jersey-born Florida. “We did it in the right way, transparently and without incentives, and at the end of the day I’m proud to be a Torontonian.”

Amazon is expected to benefit from government subsidies and investments totalling more than $2.4 billion U.S. from New York, Virginia and Tennessee.

But observers said the fact that Amazon left incentives from Maryland and New Jersey — up to $8.5 billion U.S. and $7 billion U.S. respectively — on the table shows that factors including tech talent and air travel connections mattered more.

Toronto Global chair Mark Cohon expressed no regrets about a bid that emphasized the Toronto area’s deep and growing tech talent pool, its cluster of world-class colleges and universities, the city’s cosmopolitan charms and the corporate financial advantages of public health care.

“We’re going to have a debrief with Amazon later this week,” and pitch the company on expanding its Toronto operations, Cohon said, citing possible local film and video production for Amazon Prime and the company’s gourmet food services jibing with the city’s culinary reputation.

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“We’re absolutely going to continue to pursue them.”

But 450,000 people already work in tech in the Toronto area, Cohon added, and the regional boom will continue, thanks in part to the international exposure gained from the Amazon bid book that has been downloaded 17,300 times.

“All of a sudden we were getting cities from around the world calling us, asking about the Toronto region. They were referring to pages they saw in the (bid) book and referred to specific real estates sites they saw in it,” Cohon said.

“Let’s not be too worried about the big whales to go after. We can do that but also support the whole tech ecosystem including young companies.”

Both Florida and Cohon said Toronto still has huge promise in the controversial proposed partnership between Waterfront Toronto and Sidewalk Labs to develop a high-tech test Quayside district on the city’s waterfront.

“I really do believe that with Toronto’s real estate cluster, with the University of Toronto, with the interest in Quayside, we could become one of the world’s leading incubators of so-called urban technology and innovation,” Florida said.

Brendan LaCerda, the New York-based lead analyst for Canada with Moody’s Analytics, told the Star the Toronto bid had lots going for it — but there are challenges in asking Seattle-based staff to move to Canada.

“I think that ultimately what might have compromised Toronto’s chances is, maybe, Amazon’s concern was getting tech workers, people with those skills, to move to the area,” LaCerda said.

“You can’t seed those new offices completely with new talent — significant management people and staff would have to move. I think the concern is that they were going to have to ask people from the United States to move to Canada, and that might have presented (legal and other hurdles) that Amazon didn’t want to face.”

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