Amazon announced today that it is pulling out of a deal to build half of its second headquarters in Long Island City, Queens. Barely three months after Governor Andrew Cuomo and Mayor Bill de Blasio proudly announced the corporation’s plans to bring 25,000 jobs to the Queens waterfront, the project has been scrapped. This news amounts to victory for prominent and vocal opponents such as Congresswoman Alexandria Ocasio-Cortez, City Council President Corey Johnson and State Senator Michael Gianaris and at least momentary defeat for the Mayor, Governor and pro-business groups.
Amazon said in a statement:
“While polls show that 70% of New Yorkers support our plans and investment, 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…”
It was the efforts of politicians like Gianaris in particular that turned Amazon off. His recent appointment to an obscure board, potentially with the power to sink HQ2, was likely the final straw that convinced Amazon to cancel their plans. According to the NY Times, Mayor de Blasio and Governor Cuomo led Amazon executives to believe that news of the company’s arrival in New York City would be met with near universal acceptance and praise. But, unlike the Mayor and Governor who rolled out the red carpet for Amazon and its CEO, the world’s richest man, other politicians and the citizens of the city would not be so easily wooed. Cuomo and de Blasio showered Amazon with $3 billion in taxpayer funded easements and with loopholes to circumvent normal land use processes in the city. It was the those tax breaks and who they were for that opponents used most effectively to fight Amazon’s seemingly unstoppable arrival.
Pro-business groups and other supporters of the deal to bring Amazon to Long Island City immediately decried the work of opposition, concerned that their attitude and behavior amounts to a “Not Welcome” sign for all companies trying to set up in the city. It is undeniable that for New York City to move forward, new infrastructure, new housing and new homes must be built. We cannot accept deterioration of our infrastructure and built environment as the only way to keep housing prices low as NIMBYs suggest. While it is true that the cries of NIMBYs who default to concerns about displacement when any project from a bike lane to a residential building to a massive corporate campus is proposed, Amazon backing out of this deal is not a referendum on them. Instead, it is a referendum on the use of corporate tax breaks to lure companies to cities and states, deals which use millions (and in this case billions) of taxpayer dollars to subsidize rich corporations in return for vague promises of future public benefit.
Amazon said themselves in their statement today:
“There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.”
This sentence left some asking, what was the point of offering tax breaks in the first place? Amazon will continue hiring hundreds if not thousands of people in New York City, without a dime of public money. As I wrote in a previous post upon announcement of the original HQ2 deal, Amazon was always going to come to New York City because the benefits of the agglomeration economy here are more powerful than just about anywhere else on the planet. But, instead of quietly accruing real estate and building their presence, Amazon executives embarked on a months long charade, pitting state against state, city against city in a bid to see who would bend over furthest. The search for HQ2 amounted to nothing more than a grotesque song and dance, which brought out the worst in public officials, most notably Bill de Blasio and Andrew “Amazon” Cuomo. The hubris with which Amazon executives operated is staggering. They expected a hero’s welcome and instead got what they deserved, full-throated opposition from concerned residents and politicians who would not accept the deal that had been foisted on them behind closed doors.
With that all being said, I hope Amazon continues to build its presence in New York City like any other corporation with no contests and no sideshows. It is important for the city’s technology sector to continue its ascent and maybe someday challenge Silicon Valley for primacy in the field. Google has built up a population of tens of thousands of employees in Chelsea and is planning to double its workforce with a new development on Manhattan’s west side. Though I am sure there are groups in New York City that are unhappy with Google’s growth, opposition has been nowhere near as strong as it was to Amazon. If Amazon had not pitted municipalities against each other for tax breaks and if our highest ranking representatives had not so willing joined the fray, few would have batted an eye about a few thousand employees moving into Hudson Yards every year. But instead, they chose the loudest and most inflammatory route and when New Yorkers stood up to oppose the vision they were selling, Amazon immediately retreated to lick their wounds in Crystal City, Virginia and Nashville, Tennessee.