Is Indianapolis Cool Enough for Amazon? It Just Might Be

Among Amazon’s 20 finalist cities for its coveted second headquarters are several that would have to be called long shots: Columbus, Ohio, Nashville and Miami, to name three.

And then there’s Indianapolis.

In the frenzy of coverage and speculation that accompanied Amazon’s initial announcement of a North America-wide competition for the new headquarters, I couldn’t find anyone who cited Indianapolis as a likely finalist.

This week the Irish betting site Paddy Power had Indianapolis tied for last among the finalists, with the odds of being chosen at 20 to 1. (Boston and Atlanta have been vying for the best odds, with Boston on top this week at 2 to 1.)

The commercial real estate firm CBRE ranked Indianapolis only 33rd among 50 American cities for what CBRE calls “tech talent.” Amazon has cited access to highly trained and educated technology workers as one of its top priorities.

And then there’s what might be called the “cool” factor — which Indianapolis, at first glance, would seem to be lacking.

Bob Stutz, chief executive of Salesforce.com’s Marketing Cloud, which is based in Indianapolis, came to the fast-growing company from Microsoft, and lived in Amazon’s hometown, Seattle. When Salesforce asked him to move to Indianapolis, his first thought was, “You’ve got to be kidding.”

But if Mr. Stutz’s experience is any indication, the oddsmakers may have to recalculate Indianapolis’s chances. Since moving to the city 16 months ago, Mr. Stutz said, he has been “amazed.”

“Indianapolis has done what may be the best urban redevelopment I’ve seen in this country,” he said. “Everyone here is aligned with making Indianapolis a successful place for technology companies. The people are tremendous, very friendly, polite, with a strong work ethic.”

With over 1,700 Salesforce employees there, Indianapolis is now home to the company’s second-largest office outside its San Francisco headquarters. In May the company moved into the Salesforce tower in downtown Indianapolis, the tallest building in Indiana, representing a commitment from the company that “we’re here to stay,” Mr. Stutz said.

Salesforce is eager to move more employees to Indianapolis because of its much lower costs and a good quality of life. “This is one of the few places where you can buy a beautiful home in the city for under $200,000,” he said.

One area where Indianapolis stands out also happens to be one of Amazon’s top priorities, according to its proposal: “A stable and business-friendly environment and tax structure.”

Indianapolis may be the most business-friendly city in the country, Mr. Stutz said. Both Indiana’s governor, Eric Holcomb, a Republican, and the city’s mayor, Joe Hogsett, a Democrat, showed up for the opening of the Salesforce tower, and when it comes to promoting business, partisan gridlock is all but unknown in the state.

Both officials “were very vocal and hands-on and totally bought into this,” said Michael Huber, chief executive of the Indy Chamber of Commerce, which worked closely with regional and state elected officials, and private sector leaders, to assemble Indianapolis’s Amazon proposal. “That made it so much easier for us.”

Neither the city nor the state has said what, if any, tax or other incentives it is offering Amazon.

In opening the competition, Amazon also said that “a strong university system is required.” Indianapolis hardly comes to mind as an academic mecca. But it’s the geographic center of “a surprising number of highly rated schools that are a 45-minute to one-hour drive away,” said Mark McCoy, the president of DePauw University, a liberal arts college and music school in Greencastle (a 35-minute drive from the Indianapolis airport, and also my alma mater).

These include Big Ten members Indiana University and Purdue University, as well as Rose-Hulman Institute of Technology, ranked the nation’s No. 1 undergraduate engineering program by U.S. News & World Report for 19 consecutive years.

Many university faculty members live in or around Indianapolis, “attracted to a metropolitan area with great cultural opportunities,” Dr. McCoy said. “Over 5,000 of our DePauw graduates live in Indianapolis. After they graduate, many of them want to stay.”

With a population of 855,000 (ranked 15th among United States cities), in a metropolitan area of more than two million, Indianapolis is larger and more diverse than many people realize. The city has a highly regarded symphony, art museum, ballet and school of ballet, and zoo.

It’s probably best known as a sports mecca, with the N.B.A. Pacers, W.N.B.A. Fever and N.F.L. Colts. It’s the headquarters for the N.C.A.A. and the site of numerous collegiate sports competitions, and it hosted the 2012 Super Bowl. And, of course, it’s home to the Indianapolis Motor Speedway, site of the Indianapolis 500 auto race.

Mr. Stutz lived in Austin, Tex. (another Amazon finalist), before moving to Seattle, and watched its evolution from sleepy state capital to technology hub and hip cultural magnet. “Austin was never a cool place,” he said. “Now it’s a hotbed of cool. Indianapolis isn’t quite there yet, but I see a lot of similarities.”

Last year Bon Appétit magazine devoted a feature to the “Brooklynization of Indy” that focused on the city’s explosion of craft breweries, artisanal bakeries and farm-to-table restaurants.

Transportation facilities are also prominent on Amazon’s wish list. The city’s light-filled new international airport has been voted the best in North America for five years running by Airports Council International and the best airport in the United States for four years by readers of Condé Nast Traveler.

The airport offers multiple direct flights to Seattle, San Francisco, New York, Boston and Washington, and is about to start nonstop service to Paris.

Indianapolis’s central location and network of interstate highways earned the city its nickname, the Crossroads of America. Amazon is among the large companies with distribution centers there.

While Indianapolis lacks subways, light rail or a sophisticated urban transport network, the city is crisscrossed with bike and walking trails. Mr. Stutz said many Salesforce employees biked or walked to work (something Amazon’s Seattle employees value).

Of the 20 finalist cities, Indianapolis has the least traffic congestion and the lowest average home prices, according to the Chamber of Commerce. That’s not to say there aren’t high-end options: A 21,000-square-foot, six-bedroom 1930s-era mansion, currently home to the Indiana University chancellor, is on the market for just under $7 million. (It might be perfect for the Amazon chief executive, Jeff Bezos.)

For all its virtues, Indianapolis faces a number of hurdles. While Mr. Stutz told me that Salesforce had found an abundance of homegrown tech talent there, Amazon knows it will need to import many of the high-level software engineers and employees who will form the core of the work force at its second headquarters. That may be a challenge.

Unlike Amazon’s home state of Washington, Indiana reliably votes Republican in presidential elections, though it went for Barack Obama over John McCain in 2008. Donald J. Trump carried the state overwhelmingly in 2016, and Mike Pence, an Indiana native and self-described religious conservative, served as Indiana’s governor before becoming Mr. Trump’s vice president.

A strong streak of social conservatism runs through the state (though not so much in Indianapolis), and this week the state legislature was roiled by a new round in the culture wars as legislators debated whether to pass a hate-crimes bill to protect victims of bias based on race, religion, sex, disability, gender identity or sexual orientation. Indiana is one of only five states without such legislation.

Partly as a result of pressure from Salesforce, other companies and the N.C.A.A., Mr. Pence, when he was governor, amended a so-called Religious Freedom Restoration Act in 2015 that had allowed business owners to discriminate against gays and lesbians on the grounds of religious principle.

Mr. Huber said the Chamber of Commerce had been a longtime supporter of lesbian, gay, bisexual and transgender rights, and was a strong supporter of comprehensive anti-hate-crime legislation. The city has had a comprehensive human rights ordinance in place since 2005, he said.

Indianapolis may never emerge as the popular favorite to win, but I wouldn’t count it out.

Maureen Krauss, the chamber’s chief economic development officer, who worked on Indianapolis’s proposal, said a team of about 300 people had contributed to the first-round effort, and they worked 43 days straight.

“We finished it two days early,” she said. “Amazon is a creative company and a tech company, and that’s the kind of proposal we tried to deliver.”

She and Mr. Huber got the good news that Indianapolis was a finalist on Thursday last week, but there was no celebration. “We hunkered down and started on Phase 2,” Mr. Huber said.

Content originally published on https://www.nytimes.com/2018/01/25/business/amazon-indianapolis.html by JAMES B. STEWART