After Amazon Slam, Here’s the Tough Love that Dallas and Texas Need to Hear About HQ2

Mitchell Schnurman
Dallas Morning News

Soon after learning that Dallas wouldn’t be getting Amazon’s second headquarters, the Dallas Regional Chamber put out a statement.

“Make no mistake,” CEO Dale Petroskey said in the news release, “this has been a ‘win’ for our region regardless of the outcome.”

Say what? Dallas not only failed to land Amazon HQ2. It fell short on HQ3, too. And HQ4.

On Tuesday, Amazon said it was splitting its second headquarters between New York City and northern Virginia, near Washington. It also announced that a new operations center would be created in Nashville.

If the Tennessee expansion sounds like a consolation prize, it’s a big one: 5,000 employees at an average salary of $150,000, and over $230 million in investment. As an economic plum, that approaches Toyota’s North America headquarters in Plano.

So there’s no spinning this rejection. In the World Series of economic development, Dallas just went 0 for 3.

The last thing it needs is a clap from the chamber of commerce. Instead, Mayor Mike Rawlings offered some tough love for the citizens of Dallas and the lawmakers in Austin, and predicted there would be some soul-searching in the months ahead.

We have “to look hard at ourselves and say, ‘Why can we not beat New York City and Washington, D.C.?” Rawlings said at a news conference in Dallas.

He soon answered: “It’s all about the people.” 

That means it’s all about education, too. Voters recently approved a tax increase for the Dallas Independent School District, along with some school bonds. Now, Rawlings said, they have to make sure legislators in Austin spend more money to improve public schools and colleges.

“If our state does not do this, then we will not be able to compete with these cities,” Rawlings said.

Dallas-Fort Worth is actually a leader in tech talent, ranking No. 4 in the U.S. for those workers. But New York and Washington are far ahead with a talent pool that’s over 50 percent larger.

D-FW ranks in the top 10 for tech degrees, but New York and Washington produce roughly twice as many graduates annually. The same trend holds for college-educated millennials, with Dallas ranking well behind the East Coast capitals.

Amazon was impressed with the talent pipeline in Dallas, Rawlings said. And the city’s bid included a proposal for an Amazon U. that would produce a stream of new workers for the company.

But fast-growing Amazon doesn’t have time to wait. It wants to hire thousands of workers almost immediately, and the supply in Dallas doesn’t quite measure up to the competition.

One reason is that Texas chronically shortchanges education. It usually sits among the bottom tier in funding, ranking 45th in spending per student in 2015. After the recession, lawmakers cut over $5 billion in education spending and have not made up that ground.

The next Legislature, which convenes in two months, can start moving in the right direction. First, Rawlings said, get a bill to fix school funding and build on the improved outcomes in districts like DISD. Then make sure there’s ample funding for early childhood learning, an investment that pays off handsomely.

Finally, acknowledge the dog that’s wagging the tail in the Texas economy.

“Realize that the state’s future is in the big metropolitan areas,” Rawlings said. “We’ve got to think [about] there first.”

He even took an indirect swipe at Gov. Greg Abbott — by praising New York Gov. Andrew Cuomo for leading his state to victory.

Last week, Cuomo said he was doing all he could to close the deal, offering to change his name to “Amazon Cuomo if that’s what it takes.”

“Man, he put his shoulder behind this in a major way,” Rawlings said about Cuomo. “My hat’s off to him.”

That almost makes you pine for the days of Gov. Rick Perry, an unabashed Texas promoter who would put on the hard sell anywhere, especially on the West Coast.

Over 200 communities submitted bids for Amazon HQ2, and Dallas made the cut to 20 finalists. In several analyses, Dallas was a leading contender, thanks to strong job growth, low taxes, a lot of tech talent, a pro-business climate and low costs of living.

A year ago, The Wall Street Journal rated Dallas as the best choice overall, with Washington third and New York sixth.

By the tale of the tape, Dallas was No. 1, Rawlings said. But the cost of living and the cost of doing business — both major advantages for North Texas — apparently didn’t carry much weight in Amazon’s final assessment.

“We must recognize that the customer is always right,” he said. And what Amazon wants is what other customers want, too.

“It makes you understand what you need to focus on for the long term — that is, building talent,” Rawlings said.

That will require building the best schools and colleges that we can, because that’s what they have along the Washington-to-New York corridor.

“We’re short on that today,” Rawlings said.