A stat sheet on the 20 city finalists trying to win Amazon's new headquarters

Amazon's list of 20 finalists for its coveted HQ2 project, announced Thursday, includes some of the most competitive cities in the world—let alone in North America—and data compiled by CNBC bears that out. Now, the already heated battle is likely to turn red hot as the competition moves to a second round.

At stake: a $5 billion facility that will employ 50,000 and boost state coffers by adding billions of dollars in additional investment in the surrounding community over the next 10 to 15 years.

Many of the finalists were thought to be contenders from the start. They include cities CNBC has already visited as we evaluate the bids: Chicago, Columbus, Ohio; Raleigh, North Carolina; and Denver. But three dark horse candidates join the list: Los Angeles, Indianapolis, and Toronto. The list includes three locations in and around the nation's capital: Washington, DC; the Northern Virginia suburbs, and Montgomery County, Maryland. The area was already receiving buzz based on Amazon CEO Jeff Bezos' ownership of the Washington Post.

But failing to make the cut are sentimental favorites like Detroit, which submitted a joint bid with Windsor, Ontario. Also off the list: Houston—Bezos' boyhood home—as well as Phoenix and Tucson, Arizona, and Salt Lake City.

"Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity," Holly Sullivan, an executive with Amazon Public Policy, said in a statement.

A number of factors can help gauge which cities have a chance at this coveted bid. Amazon has stated criteria noting it favors metro areas with 1 million people and a stable, business-friendly environment. It also wants a location with strong local and regional talent — particularly in software development and related fields — and a community that thinks "big and creatively."

Also included in a request for proposals issued by Amazon in September: convenient access to mass transit and an international airport, a highly educated labor pool, a strong university system and a diverse population.

Now that Amazon has narrowed down the field, we have done the same in our ongoing analysis of the contenders. And we have added new grades for Los Angeles, Indianapolis, Toronto, and Montgomery County, Maryland.

Our analysis scores the locations based on Amazon's main criteria—population, stability/business friendliness, talent, and location—using data from our 2017 America's Top States for Business study and the Census Bureau. Apples-to-apples data for Toronto is tricky, but we used figures from Statistics Canada, Transportation Canada, Ontario's Transportation Ministry, and the Association of Municipalities of Ontario.

No one outside of Amazon knows for certain how the company will score things, but our data offers some insight into which finalists have the best chances. First, a look at the new cities on the list:

Overall grade: C

Los Angeles has the talent, that's for sure. Higher education in the Golden State is outstanding, and Southern California's tech scene is giving Silicon Valley a run for its money. It also would not hurt Amazon's growing studio arm to have a bigger presence near Hollywood.

But this is California—notoriously unfriendly in terms of business regulation, though the economy has improved considerably. Making the list of finalists is giving the business community here renewed hope, unless it turns out to be a Hollywood fantasy.

Overall grade: B-

Indianapolis is the capital of the Crossroads of America, and given Amazon's interest in strong infrastructure in its new location, that is not a bad distinction to have. The state economy is strong, stable, and business friendly. But the region lacks some of the options its competitors have when it comes to air travel.

Indiana also suffers from shortages of workers—particularly the skilled workers Amazon craves.

Overall grade: C

Amazon had opened its search to locations across North America, but Toronto is the only non-U.S. city to make the cut. But it brings considerable might to the competition. The region far outpaces its American counterparts when it comes to an educated workforce.

Business costs in Canada are tempting—the corporate tax rate is well below the U.S., even after the Trump tax cuts, and the Canadian dollar is cheap. But Toronto suffers some of the same problems as any other big city, including an aging infrastructure. And business regulation in Canada can be far stricter than in the U.S.

Overall grade: C-

We are grading D.C.'s Maryland suburbs separately from Northern Virginia because Maryland has some different pluses and minuses. On the positive side, the skilled workforce is plentiful here—particularly the all-important STEM workforce. But Maryland is a much less business-friendly state than Virginia.

If Amazon is intent on setting up shop in the D.C. area, it may do best in Virginia or the District itself.

Other cities on the list are already well respected in economic development circles. Making it into Amazon's top 20 is yet another feather in their competitive caps.

Overall grade: C+

Even before any city had submitted a bid, the New York Times in September declared Denver to be the winner. Our analysis is a little less glowing. Yes, the state has a tremendous talent pool, a thriving tech scene, and a business-friendly environment. But the state is dealing with a serious pension problem, which hurts the overall economy. Costs can be high, and the infrastructure needs work.

Gov. John Hickenlooper today gave the following statement on Amazon releasing the list of 20 finalists for its second headquarters. "It's great to be on Amazon's list of finalists as they consider the location of their second headquarters," said Governor John Hickenlooper. "Colorado is one of the most business-friendly states in America and we believe the Denver region would be a great choice for Amazon."

Overall grade: B

The capital of the Tar Heel State benefits from a state with one of the best workforces in the country and a heritage of innovation dating back to the Wright Brothers.

"When I talk to CEOs about whether they will expand or bring their company to a state, the first thing they talk about is work force and talent," North Carolina Governor Roy Cooper told CNBC in November. "North Carolina checks all of those boxes for Amazon."

Counting against the state is a lack of mass transportation and a nagging lack of inclusiveness. North Carolina repealed the most controversial parts of its so-called bathroom bill, but it still lacks statewide protections against discrimination and expressly bars them at the local level. North Carolina finished No. 5 in this year's Top States rankings.

Overall grade: B-

Don't just take our word for it. The Irish online betting site Paddy Power lists Atlanta as the odds-on favorite to win HQ2. Beyond that, Georgia boasts the best economy in the nation, according to our rankings. Its workforce is abundant and well educated, and its transportation infrastructure is top-notch.

But that may not be enough to overcome some of the region's weaknesses. Atlanta stumbles a bit on quality of life, and Georgia can be stingy when it comes to incentives. But the capital of our 2017 Top States runner-up should earn a spot on anyone's shortlist.

Overall grade: B-

It might not hurt that if Amazon were to put HQ2 here, CEO Jeff Bezos could not only visit his company's second headquarters but also check in on his employees at the Washington Post, which he owns. Multitasking doesn't factor into our analysis, however.

Instead, look at the business-friendly regulations in Virginia, as well as an unparalleled pool of educated workers in and around the nation's capital. But the region earns a failing grade when it comes to big and creative thinking about locations. (Creative thinking? This is Washington, after all.) The capital region is notoriously expensive and is not big on incentives.

Overall grade: B-

The aforementioned Mr. Bezos grew up in Houston, yet that city was knocked off the short list. But the Lone Star State offers a host of advantages should Amazon decide to locate there. No state has a more developed infrastructure, and few offer more options for higher education. Plus, Texas is generous when it comes to incentives. A Moody's Analytics study in September listed Austin as the most likely winner of HQ2.

But the sluggish energy economy has hit Texas' once pristine finances, hurting the state in the stability department. And quality of life, including a lack of inclusiveness — not to mention a lack of health insurance — could be a problem.

Amazon says it received 238 proposals from 54 states, provinces, districts and territories in North America by the Oct. 19 deadline. By our analysis — not to mention the numbers — most don't have a prayer of winning. But that has not stopped them from trying, or projecting anything less than extreme confidence.

Greg LeRoy, an expert on state and local incentives, and the executive director of the non-partisan think tank Good Jobs First, believes that is exactly what Amazon was hoping for. He says Amazon has structured the competition to elicit the maximum response — and the greatest possible range of incentive offers.

"They brilliantly crafted a document that everybody can read as they wish, to convince themselves that they should apply," he said. Meanwhile, "You've got all these politicians out there who feel like they've got to be active on jobs."

Some of the boldest proposals have come from places that are struggling the most financially. They include:

Overall grade: D+

Before leaving office, New Jersey Gov. Chris Christie signed into law a bill authorizing some $7 billion in incentives for Amazon to build the facility in Newark, even though the state faces more than $60 billion in unfunded pension obligations.

The new governor, Democrat Phil Murphy, has not yet said whether he fully endorses the bid, but said during the campaign that he is committed to bringing Amazon to the Garden State. In our analysis, New Jersey suffers from severe instability — not just in its finances but also in its infrastructure.

Overall grade: D+

Illinois is offering $2.25 billion in tax breaks and incentives for Amazon to locate at one of 10 sites in the Chicago area. The package is worth even more if the company builds on state-owned land being offered. Illinois has the worst credit rating in the nation, as it lurches from one budget crisis to the next, but Gov. Bruce Rauner says the state couldn't afford not to bid.

"This Amazon opportunity is a home run for Illinois or wherever they choose to go," he told CNBC on Oct. 16. "Our tax revenues will go up by billions of dollars when we win Amazon. So we can easily afford it. Them coming here helps us with our challenges."

But those challenges are formidable, according to our analysis. Not only are the state's finances a mess, its regulatory structure is difficult. The state does well in higher education but poorly for its overall workforce.

It is a similar story for Pittsburgh, which has performed well in other studies, including the Moody's analysis. But our grade is a D+, due in large part to Pennsylvania's relatively stagnant economy.

Amazon has already shown itself to be adept at wringing incentives and tax breaks from state and local governments. From 2005 to 2014, the company received at least $613 million in local government subsidies to build warehouses, according to a 2016 report by the Institute for Local Self-Reliance. But the HQ2 sweepstakes takes the process to a whole new level.

"Obviously, they're here to optimize the tax breaks that they get at their final choice," said LeRoy of Good Jobs First.

In fact, if Amazon plays its cards right, it could wind up with a negative tax rate in the jurisdiction where it locates. Amazon doesn't pay the state. The state pays Amazon.

"In many states, they will be automatically exempt from sales tax on building materials, machinery and equipment," he said. "There will be enormous pressure on local officials to abate 100 percent of their property taxes for many years. And at the state level, many states have automatic investment credits and employment credits that will completely obliterate their income-tax liability for many years."

Amazon could even negotiate a provision allowing it to sell those tax credits to other companies, an incentive Tesla won from Nevada to locate the company's giant battery plant there.

LeRoy believes the states are playing this all wrong, and taxpayers will pay dearly as a result. He says the states are allowing Amazon to dictate all the terms when the states could have some leverage of their own.

"They should feel free to talk to each other and collude and drive as stingy a bargain as possible," he said.

But in the economic development game, where state and local economic development officials are used to cutthroat competition, old habits die hard.

"Eighty years of training doesn't go away overnight," LeRoy said.

We graded bids for Amazon's HQ2 project based on the company's four main criteria: A metropolitan area with more than 1 million people; a stable, business friendly environment; ability to attract and retain strong talent and creative thinking when considering locations.

Correction: A previous version of this story included an incorrect grade for Miami in the Talent category. We have raised the grade to D from F. That raises Miami's overall grade to C+, from a C previously. Florida's workforce performs well in our America's Top States for Business rankings, and higher education is plentiful. But there remains a relative shortage of STEM workers to fill skilled positions.