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Pittsburgh already looking to move on from missed Amazon HQ2

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Pittsburgh Mayor Bill Peduto said he hopes to use the region’s proposal to lure Amazon for future economic development projects.

Amazon may have passed on Pittsburgh for its second headquarters, but local officials say that won’t stop them from trying to make the city a technology hub on a national scale.

“I don’t think this is the end for us at all,” said Audrey Russo, who heads the Pittsburgh Technology Council. “I think we were strong. We had strong capability. We had strong resources, and if anything it helped put Pittsburgh back on the map again.”

Long Island City, a neighborhood in the New York borough of Queens, and Arlington, Va., just across the river from Washington, will split Amazon’s HQ2, the company announced Tuesday. The announcement ended more than a year of speculation of where the Seattle-based tech giant will go.

Each location will see the creation of 25,000 jobs and $2.5 billion in investment over the next decade.

Nashville, Tenn., also will become home to an Amazon operations center of 5,000 employees.

Pittsburgh was among the 20 finalists selected by Amazon, but Tuesday, it was left out.

Local officials said they plan to regroup now that Amazon has passed over Pittsburgh as a site for its second headquarters and look at ways the region can use its efforts and bid package for future economic development.

More than 400 people from the city, Allegheny County and private organizations came together to prepare the Amazon proposal, but whether it proves useful is a matter of debate.

Mayor Bill Peduto thinks it can be useful. Allegheny County Executive Rich Fitzgerald said it’s doubtful. They plan to release the proposal on Thursday, but some of it could be redacted.

“I don’t think we can say ‘Take this bid and then move it over and put it to the next proposal,’ because I can’t imagine we’re going to get another one in any short period of time that’s going to say, ‘OK, we’re bringing 50,000 jobs to Pittsburgh in a 17-year period,’” Fitzgerald said.

Peduto said he hopes to use it to attract investors through federal Opportunity Zone legislation, which offers capital gains tax credits to companies investing in low-income neighborhoods.

“Is it possible to look at an Amazon plan and find ways where you could have greatly reduced rental space for startups and for entrepreneurs in low-income neighborhoods?” Peduto said. “Can you look at opportunities to do it around housing initiatives? There’s a lot of takeaways from this and right now my concern is how can we use the information we submitted to be able to create better economic development strategy for the city and the region.”

Amazon has promised Pittsburgh a “debriefing” over its proposal. Peduto said he hopes the company will convey its analysis of the region’s strengths and weaknesses.

“I’m hoping that (Amazon) will give back to each city that took the time to provide them with information an understanding of what their analysis said and to allow every city to have the ability to look at where they stand in competition with other cities across this country,” he said. “These are very quantifiable demographics that we can measure and look at against other cities and get ideas of where we are and then where we are behind.”

Luke Skurman, CEO of the Pittsburgh-based data company Niche, said missing out on Amazon’s HQ2 will only be a missed opportunity if city and county leaders let all the work they did to lure the company sit. Skurman it is apparent that a lot of really smart people came together to put together the best bid possible. And while the next person to knock on Pittsburgh’s door might not have the cache of Amazon, this process should have equipped leaders to invite that suitor in.

“There’s no doubt that Pittsburgh has crazy momentum right now, and more and more companies want to be here,” said Skurman, whose company collects information on cities, towns, neighborhoods, schools and colleges around the country.

Josh Knauer, who built the media and consumer analytics company Rhiza that was acquired by Nielsen, said Pittsburgh would do well to focus all the energy it put into Amazon HQ2 on developing and diversifying its economy. He said the region should invest in local startups. The city can’t count on one company, not even Amazon, to save it or reinvent it.

Knauer wanted leaders to “pull the alarm” and rethink its development strategy.

“We have to aspire to building one of the most diverse economies in the world, which means we have to focus on both social and economic diversity,” said Knauer, who recently founded an advisory firm for socially conscious investors. “There’s nothing that would stop us from achieving the type of growth that Amazon promised.”

Amazon’s search for a second headquarters likely put plans by other companies to relocate or expand on hold. Companies wanted to see where Amazon went and then decide if they wanted to compete for talent. John Boyd, a principal consultant at The Boyd Co., a location consulting firm in Prince¬ton, N.J., said companies that have had their eyes on Pittsburgh for expansion will likely start to come forward.

“Now that this Amazon gorilla is no longer in the room,” Boyd said.

Boyd also didn’t rule out Pittsburgh landing a slice of Amazon’s expansion. The company’s decision to split its HQ2 signaled to Boyd that it may be open to more satellite offices. Pittsburgh, Philadelphia, Newark, N.J., and Bethesda, Md., should all gear up to compete for more Amazon offices in the future. Boyd praised the job Pittsburgh did, giving Peduto high marks for being a “salesman in chief.”

Matt Michalko, 28, of Brentwood, had mixed feelings. He called it a missed opportunity for the city but said it probably saved Pittsburgh and the region from an exploding cost of living.

Hank DeLuca, 43, of Pittsburgh, never wanted Amazon.

“We don’t need more traffic and a higher cost of living,” said DeLuca, who works as a DJ. “Cost of living has risen enough over the past 12 years. I’m glad they’re not coming here.”

Bopaya Bidanda, chair of the University of Pittsburgh’s department of industrial engineering, called missing HQ2 a double-edged sword. Pittsburgh was spared the potential headaches of increased housing costs and traffic, but the city will miss out on the development a company like Amazon brings, he said.

“When the dust settles, Pittsburgh remains a very attractive place,” Bidanda said. “I hope what we’ve learned from it are where the gaps are.”

Local activists who were wary of how the Amazon HQ2 process unfolded and the secrecy of the city’s discussions, bid and communications with the company hoped that any future, major development projects take a different course.

“I think they’ve paved the way for a future with more of this elite-led development that excludes the voices of residents,” said Jackie Smith, a sociology professor at the University of Pittsburgh who also works with advocacy groups Pittsburgh Human Rights City Alliance and the Community Power Movement. “I don’t think we’re out of the woods.”

Peduto and Fitzgerald said the proposal strengthened connections between government and private organizations, including corporations, universities and nonprofits. That network can be used in continued efforts to grow the region’s economy, they said.

Their work also helped identify weaknesses. The region must improve its crumbling infrastructure, out-of-date transportation systems and training for people who want to work in high-tech jobs. Fitzgerald said Pittsburgh International Airport must strive to offer more flights to more cities.

“Whether Amazon had said it was going to be Pittsburgh, these are things we are continuing to work on,” he said.

With or without Amazon, the city still has a lot of work to do when it comes to making sure all students are prepared for jobs in STEM (science, technology, engineering and math) fields like the ones that could be offered at Amazon’s HQ2 sites, said James Fogarty, executive director at A+ Schools, a Pittsburgh-based organization that advocates for students and families in Pittsburgh Public Schools.

A+ Schools was not involved in writing the Pittsburgh Amazon bid, Fogarty said.

“What the Amazon opportunity at least crystallized for me was that we still have an equity problem,” Fogarty said. “And the talent of our African American students, we’re not helping it reach its full potential in too many cases.”

But it’s not just on the school system, he said. It’s going to take industry, community college and university systems along with local officials to figure out how to make sure that students are well-trained for jobs in the future.

“We know the huge demand for talent. And what we’re doing is leaving talent on the field,” Fogarty said.

Brandi Fischer, director of organizing for Pittsburgh United, a coalition of several community and labor organizations, would like to see the city and county redirect resources that were dedicated to wooing Amazon back to helping residents tackle issues like affordable housing, transit and job training for young people.

How much the city and county were willing to give Amazon in terms of incentives has not been disclosed. Though Amazon made its decision, groups like Pittsburgh United aren’t done fighting for transparency, she said.

“If they had the means to provide that subsidy to Amazon, and had a way to find all this money for them, I think the only thing that makes sense now is to invest in our community’s needs,” Fischer said.

Tribune-Review staff writer Ben Schmitt contributed. Bob Bauder, Jamie Martines and Aaron Aupperlee are Tribune-Review staff writers.

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