Amazon Drops Plans For New York Headquarters

February 14, 2019

Updated at 3:50 p.m. ET

Amazon will no longer build new headquarters in New York City after weeks of local politicians, union leaders and community organizers protesting the financial incentives promised to one of the world’s most valuable companies.

The decision to abandon the planned New York HQ is a big reversal of its much-hyped decision to build a campus in Queens after a highly publicized nationwide search that lasted over a year.

On Thursday, an Amazon spokeswoman told NPR that the company plans no further negotiations with city and state officials in New York, where the firm has faced scathing criticism in recent City Council hearings. One key issue was the almost $3 billion in state and city tax incentives Amazon was slated to receive in exchange for creating some 25,000 jobs.

Local union leaders had organized protests against the company and have accused it of anti-union behavior. Also, the state’s Senate leader recently nominated an ardent critic of Amazon’s deal to the state board that had control over Amazon’s plan for Queens.

“A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City,” Amazon said in a statement, citing a recent poll it had commissioned showing that the majority of New Yorkers supported Amazon’s presence.

New York City Mayor Bill de Blasio said Amazon was throwing away an opportunity by pulling out of the deal.

“You have to be tough to make it in New York City,” he tweeted. “We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity.”

Amazon said it will not search for a new location for another HQ. This leaves the company with its main headquarters in Seattle and a second one planned for Northern Virginia.

“We do not intend to reopen the HQ2 search at this time,” Amazon said. “We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.”

For Amazon, New York City will remain one of the company’s biggest hubs, and the company says it will keep investing into the existing teams there.

The Retail, Wholesale and Department Store Union said in a statement that Amazon acted irresponsibly. “Rather than addressing the legitimate concerns that have been raised by many New Yorkers Amazon says you do it our way or not at all,” said spokeswoman Chelsea Connor.

Amazon is one of NPR’s financial supporters.

Amazon’s surprise decision to create two new headquarters locations followed a much-hyped, Olympic-style search. In all, 238 locations had submitted bids with incentives, in hopes of wooing Amazon.

This highly publicized competition added an extra layer of scrutiny on the incentive packages offered by the two winning locations, Northern Virginia and New York City.

When Amazon announced its selection of the winning cities, they said part of the reason was the Washington, D.C., and New York City areas stood the best chance of attracting the high tech labor force needed.

But Amazon appeared unprepared for the level of vocal opposition in Queens, where the company’s plans were slated near the district that elected Amazon critic Rep. Alexandria Ocasio-Cortez to Congress. The deal with Amazon was largely negotiated by Mayor de Blasio and Gov. Andrew Cuomo, who famously joked about changing his name to “Amazon Cuomo” to win the second headquarters.

Privately, Amazon executives pondered whether New York was a good choice from the early days of the deal, a person familiar with the deliberations had told NPR. Loud criticism mounted quickly after the deal was announced, including from Ocasio-Cortez. Many on the local city council also decried its process, which used a procedure to approve the Amazon plan that left the lawmaking body with little power over Amazon’s plan.

“I think everybody miscalculated here,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

Amazon “believed that they were doing New York such a big favor by bringing tech jobs and then all the ancillary jobs that they thought that the protests would not be as strong as they were,” he said. And the opposition, he said, instead of working out a deal, “basically punched Amazon in the face in public.”

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