How Amazon Negotiates with Bureaucrats: Why it is a lesson for the little guy.

How Amazon Negotiates with Bureaucrats: Why it is a lesson for the little guy.

Would you sell your backyard if the proceeds went to someone else? The quick answer is “no,” of course. 

But what if that person had to build something you really wanted—say, a swimming pool? 

Well, that is how the City feels about its 2000 acres of “excess” land at the Airport. It typically won’t sell land to developers to build hotels, coffee shops, and office space because it prefers to lease it for these uses. But if you are Amazon, bringing jobs and hundreds of millions of investment dollars, selling land suddenly becomes a compelling option.

There is an essential lesson in negotiating in this. 

When faced with a request for proposal (RFP), many people feel they have only two options: Accept the process and terms or not participate. However, as we have seen, and the case with Amazon at the Airport proved, there are ways to win an RFP selection by nibbling around the edges of the rules.

Here is a case in point. Early in my career, I was a young development manager working for a national firm that developed warehouses and office buildings close to airports. My projects were at CLT, JFK, and BOS. I learned that I couldn’t rely only on the brokers in a market; I had to call users, sponsor airport-related trade groups, and even look at the classifieds. There I found an announcement that the US Census Bureau was looking for 30,000 square feet (SF) of office space in Charlotte, and this meant that they ran an ad in the real estate section of the Charlotte Observer classifieds. 

I responded and received the standard RFP but learned that we did not fit in their advertised Approved Location Boundaries (“ALB”). Instead of giving up, I called the General Services Administration (GSA) procurement officer assigned to the project and told them that, except for their ALB, we confirmed perfectly all of the other 102 preliminary requirements. Can our project still be considered? 

The procurement officer said “no,” that the rules are the rules, and besides, the GSA has been advertising this for 6 months; it would be unprecedented if they changed now. But the officer also said I was right—our space was uniquely qualified, except for the location.

He also told me that no other project fits all of their 102 preliminary requirements and that if I could only make this one change on their end, I would have no competition.

So, I bypassed the communication restrictions and went to the GSA officer overseeing work for the US Census Bureau in Washington and asked if I could formally request a change in the ALB. They ultimately agreed, and two weeks later, I got a form letter that went out to all of the interested landlords stating the ALB had been changed and now included our project. We submitted and won.

Incidentally, we got the government to pay taxes, which was another thing they said they would never do. We explained that they were not paying taxes but simply reimbursing us for our taxes. 

This is lesson one when responding to an RFP: You do not win by negotiating with the government to think outside the box; you win by finding a way to fit into their box!

 “When we entered the Charlotte market to purchase and redevelop the former Charlotte Coliseum, we did so under the leadership of John Culbertson. While we relied heavily on his market knowledge and relationships, the most important and long-lasting factor was that we trusted him, and he delivered on his promises.”

~H. Mason Zimmerman, Senior Vice President, Pope and Land Inc.,

Developer of City Park, Charlotte, NC

And there is an excellent example of government seeking proposals where you can put some of these tips to work. I was able to catch up with the stalwart City official Stuart Hair, Director of Commercial & Community Engagement, at the Charlotte Douglas International Airport. He was bringing a small group of Charlotte real estate types up to speed on the commercial opportunities at the airport.

Stick with me as I take a slight detour to explore the wonders of Charlotte-Douglas Airport. While it may seem off the path, we’ll circle back to our negotiation discussion shortly. The intricacies of airport development are truly captivating, and I have a strong feeling you’ll be intrigued by the fascinating insights Stuart provided to our group.

You probably heard that Charlotte is a flourishing hub because we are cheap for airlines to fly out of. In airport parlance, this is called “Cost Per Enplanement,” or CPE. It is the sum of all airline fees divided by the number of passengers enplaned at that airport. In 2023, CLT’s CPE was $1.60—the cheapest in the nation. The next cheapest is ATL, which is $2.80, and MIA at $8.00. PHL is $20.00, and JFK is $25.41. 

In the bustling landscape of Charlotte, where the wheels of progress churn incessantly, the Charlotte Douglas International Airport (CLT)—with its 21,000-strong workforce—shines as a beacon of economic prosperity. In 2023, it commanded a staggering 5% of North Carolina’s GDP, injecting $32B into our economy while also extending its reach into neighboring states. 

The airport witnessed an astonishing recovery post-COVID-19. 53.4M passengers now traverse its terminals, making CLT the swiftest airport in the U.S. to bounce back from a recession. It sees a remarkable daily footfall of 140,000 passengers, 40K of whom are local. 

Of course, this surge in local traffic has introduced new challenges, including increased congestion and luggage delays. 

So, part of the airport’s initiative is its $1B capital program to streamline local travel. It’s the city’s most ambitious project to date.

There are approximately 2000 acres of CLT’s 6000-acre expanse in surplus, opening up intriguing possibilities for land use as long as it complements the airport’s functions. If you look at the Airport’s Destination District, you’ll get an idea of what those possibilities and opportunities might look like.

However, although the Airport’s Destination District is attractive to developers and users, the trouble is the airport does not want to sell its land—it wants to lease it.

Buying land for development is really important to developers. They have a hard enough time getting debt for a new project right now, especially since they cannot subordinate (i.e., provide as collateral) the land. The Airport knows this is the elephant in the room. So, I’m assuming they can make a project “fit in their box.” Amazon found a way, and so too, will other developers.

In other words, if you can develop something the city wants, like a barber shop, coffee, hotel, or fine dining, you can get them to sell the land to you. 

The Negotiation Worksheet™ from Cardinal Partners prepares you for these types of negotiations. At Cardinal, we have been using it for over a decade on hundreds of real estate deals, and we always find that it demonstrates we have far more leverage than we thought. Often, like the example above, The Negotiation Worksheet™ reveals opportunities to politely challenge, disrupt, and change the rules of a competitive pitch, just as I did as a young developer pitching an office building to the US Census Bureau.

“The Cardinal disposition process was extremely well managed. It resulted in a much higher process than we anticipated and a new use that enhances our city.”

~Kent Winslow – former Real Estate Director, City of Charlotte,

and Point Person for the Charlotte Coliseum disposition

And given the myriad opportunities that Charlotte’s market presents, engaging with Cardinal Partners becomes imperative for anyone determined to make their mark in real estate development. With tools like The Negotiation Worksheet™ and the decades of experience at our bespoke consultancy, you’ll have a partner able to take your projects from vision to reality—and profitably, too. 

Give us a call or send us an email. We’re here to help.

Real estate transactions can be fraught with frustration and pitfalls.

Sometimes the hardest part turns out to be working with your broker, the person who is supposed to help you through the complexities. Veteran commercial real estate broker and client advisor John Culbertson discovered that brokers’ interests aren’t always aligned with those of their clients. He realized there was a better way to advocate for clients and get the deal done.


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