Target Corp. and Best Buy Co. have emerged as complicating factors in Minnesota’s effort to attract Amazon Inc.’s second headquarters, but some Twin Cities tech leaders say the state’s economic future shouldn’t be handcuffed by the two homegrown firms.
In the week since Amazon announced it was looking for a city beyond Seattle to build an office that may eventually employ 50,000 people, Gov. Mark Dayton and Minneapolis Mayor Betsy Hodges expressed less enthusiasm at the prospect than their peers elsewhere. Dayton said the state’s bid for Amazon, due Oct. 19, would be “restrained” and both leaders cited conversations with Target and Best Buy, who together employ about 20,000 people at headquarters in the Twin Cities.
Some executives said Wednesday that they fear the deference to those companies shows that officials are more concerned about the state’s present than its future.
“Unrestrained isn’t wise with taxpayer dollars, but I hope we are not holding back due to the current incumbents,” said John Tedesco, chief executive of Leadpages, one of the most successful startups in Minneapolis this decade. “The city has to continue to evolve and the companies that come here have to continue to evolve.”
Margaret Anderson Kelliher, chief executive of the Minnesota High Tech Association, urged Minnesota to “use every available tool in the economic development toolbox to attract Amazon.”
No other U.S. metropolitan area of 1 million or more people — the smallest size Amazon said it would consider — is so heavily influenced economically and in civic life by such direct rivals of the internet retail giant. While both Target and Best Buy are seen by investors as faring better than most retailers against Amazon, neither is growing as quickly as they once did, nor at the same rate as Amazon.
In all the cities and states that compete in Amazon’s headquarters contest, officials will face questions about corporate welfare. But Minnesota’s leaders and boosters also are confronting two competing considerations: How hard should the state appeal to a company that has been so vexing to its homegrown giants? Will the state lose even more if Amazon chooses another site and then further chips away at Target and Best Buy?
For Dayton, there’s another connection: His father and uncles started Target in the 1960s inside the department store company they inherited. He owns no shares in Target today.
Target and Best Buy confirmed that chief executives of the firms held phone conversations with Dayton and Hodges late last week. They declined to discuss details.
Asked about the prospect of an Amazon headquarters in the Twin Cities, Best Buy said it would be inappropriate to comment and a Target spokeswoman offered a statement describing the company’s long record in the state. “We are currently focused on our strategic plan to modernize Target, which will ... position the company for long-term growth,” the statement said.
Anderson Kelliher said she thinks Amazon would add to a clustering effect of talent in retailing and retail technology that has been built around Target, Best Buy and firms like Minneapolis-based SPS Commerce, a maker of online ordering software. “Good things happen to companies when they are located in the same places in similar industries,” she said.
Atif Siddiqi, chief executive of Branch Messenger Inc., a software startup that moved to Minneapolis from Los Angeles last year, said, “The infusion of new talent and capital would be fantastic for everyone all around.” His firm was attracted to the area by Target and has raised $10 million in venture capital since coming to Minnesota.
Tedesco of Leadpages said the presence of Amazon’s major office would draw more Minnesotans into the tech field and spur other top technology firms to locate in the state. “There’s a reason why Facebook and Google opened offices in Seattle, in the backyard of Microsoft and Amazon,” he said. “The talent pool that Microsoft and Amazon developed made it attractive.”
David Wellington, an executive at the St. Paul commercial real estate firm Wellington Management, worked on property transactions for Amazon as a broker in Seattle and said he understands politicians “want to make sure that we’re not just jumping off the cliff.”
“There’s a strategic and smart way to do it,” he added.
Dayton tapped the state economic development agency to coordinate Minnesota’s offer. At least four major real estate sites — including an area just off downtown Minneapolis and the former Ford plant site in St. Paul — are being viewed to suit the company’s preliminary specifications.
Paul DeBettignies, a high-tech job recruiter in Minneapolis, said Minnesota doesn’t need to “sell its soul” but should be aggressive in its offer. “Can you imagine sitting here 20 years from now and we find out Minnesota barely tried? That the politicians were too scared?” he asked.
Staff writer Patrick Coolican contributed to this report.